Imagine this: You’ve gone to collegeâeven grad schoolâto pursue a career path you always thought you wanted. But after a few years and many tuition dollars spent, it suddenly hits you: If you have to write one more press release, it might push you over the edge. If this is the case, it’s time to prepare for a career change.
Transitioning careers is not unusual. In fact, according to a survey conducted by the American Staffing Association, 38 percent of working adults say they are likely to change careers within the next year. The only problem is, if you are unsure of how to make a career change and whether it will be financially sound, you might be hesitant to make the leap.
âNo one wants to change careers without knowing the chances of success,” says Mark Anthony Dyson, host of The Voice of Job Seekers podcast, a show designed to help those in career transition. “Adequate preparation can make all the difference.”
âPreparation in every formâfrom updating job skills to financial planning and really taking time to think about what you desire in a fulfilling careerâwill be a huge factor in your career-change success.â
“How do I make a big career change with this adequate preparation,” you ask?
Learning how to prepare for a career change financially and finding out which skills you’ll need in your new career are great places to start. Take these steps to understand your career intentions, then determine the best financial strategies for achieving them:
Figure out if a career change is right for you
Before preparing for a career change, start by doing an honest self-assessment on whether or not a switch is right for you. This is important, says Dyson, because you’ll want to weigh the advantages and disadvantages of changing careers versus exploring a job transition within your current field. Doing the latter might make more sense for you if you aren’t quite ready to go through a full-blown career transition. Either way, taking the time for self-reflection will help you get to your desired career path sooner.
When you are thinking about how to make a career change and if it’s the right time for you, Dyson suggests asking yourself these questions:
What are the professional and financial impacts if I stay on my current career path? A quick list of pros and cons might help your analysis.
Are there other opportunities in my current field that I haven’t yet considered? Talk to a human resources professional or research online to understand the qualifications, salaries and opportunities for advancement within your area of expertise.
What does my ideal career look like?
Do I currently have the skills and experience that can transfer to a new career?
What are the possible financial and professional outcomes if my new career doesn’t work out?
Kelan Kline, a jail deputy turned personal finance blogger for The Savvy Couple, felt stifled by his previous job and the limitations it imposed on his time. He believed that in order to achieve career growth and increase his money-making potential, he would have to change careers. “I knew I was done working for others altogether,” Kline adds.
You may not think you have the skills and experience necessary to transition into a new career, but a tip to prepare for a career change is to consider the skills that have led to your career success thus far. That’s what 10-year human resources veteran Lisa Cassella did when she decided a new career direction was in order and wanted to follow her passion for real estate.
“As hiring and program manager for a senior living facility, I met face-to-face with with people everyday,” says Cassella, now a licensed real estate salesperson for the brokerage firm Compass. “Sometimes you have to have some difficult conversations,” she continues. “It’s the same in real estate. But for the most part, you are helping peopleâwhich is what I enjoy and a strong connection between both careers.”
Sasha Korobov, a career and success strategist, agrees that a tip for preparing for a career change is to use your current skills as a foundation for a new career. Having undergone a career change herself, she advises people to âreally think about what you want to do next, and see if you can start getting those skills and experience in the job you’re already in.”
Once you understand your motives and capabilities, you’ll have the groundwork for what needs to come next: smart ways to financially support yourself through the transition.
Prepare yourself financially for making the switch
One of the best things you can do when figuring out how to make a career change is to have a financial plan. Depending on how you approach your career change, the steps that you take to move to a new industry could impact your finances in various ways.
For example, when you start out in a new industry, you might be taking a lower level position than what you had in your previous career. This may come with a dip in income, for which you will need to adjust your budget as you progress in your new career.
If you plan to take any time off before you make the switch, you may experience a gap in income. “You have to think about how many months of income you need to save to get over that hump,” Cassella says. Cassella planned in advance so that she had at least six months of income in the bank before she made the switch to her new career.
Another consideration when you prepare for a career change is whether there is a cost investment required in moving to the new career you have chosen. For example, you might need to spend money on additional education, training, certifications and other measures before you can move into your new role. Your financial plan will have to consider dips in income that could occur if you need to reduce your hours or quit working in order to get the training and education your new career requires, Korobov says. Cassella had to get licensed before moving into real estate sales. She quit her job and took a two-week course, then immediately took the state test.
If your career change means starting your own business venture, you may have to prepare for all of the financial scenarios mentioned above. Your income might decrease as you establish your own business and gain traction, for instance. You might also have to pay for things that were once provided to you by an employer, such as supplies, computer equipment, software and health insurance.
Because of these potential challenges, having a savings plan is key when considering tips to prepare for a career change.
Fine-tune your savings to prepare for a career change
No matter which path you choose, preparing for a career change may present you with some financial risk. Therefore, it’s beneficial to have savings set aside to manage the transition. With just a few small lifestyle changes that will save you money, you can build the financial safety cushion you need to prepare for a career change, says finance blogger Kline.
Here are Kline’s tips to prepare for a career change and the areas he focused on most when he prepared for his professional move:
Reduce unnecessary expenses. As you work on how to make a career change, consider cutting back on discretionary spending such as eating out, entertainment and vacations, and set that money aside for your career change. Don’t already have a budget to track your expenses? Now is the perfect time to start one.
Pick the right type of savings account. You’ll want to put the money you save from reducing your expenses into the best type of account to support your career transition. A high-yield savings account, such as the Discover Online Savings Account, will help you grow your savings. For a long-term savings strategy, a Discover Certificate of Deposit might be a great fit.
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Start an emergency fund. Similar to establishing a budget and picking a savings account, if you haven’t already started an emergency fund, now is the time to create one (or add to it if you already have some momentum with your rainy day savings). An emergency fund can help you prepare for unexpected expenses and the financial risks involved in changing careers. Experts suggest that you keep at least three to six months’ worth of living expenses in your emergency fund.
Pay down debt. If you are able to pay down debt, such as student loan and credit card debt, it will free up cash to save toward your career transition. Pay more than the monthly minimum to reduce or eliminate the debt altogether as you prepare for a career change.
With just a few small lifestyle changes that will save you money, you can build the financial safety cushion you need to prepare for a career change.
Approach your new career at a gradual pace
For some, a slower transition, with moonlighting or side hustling until they are ready to go full time, has proven effective. When Jeff Neal started his online retail site selling bait and live feeders, he was still a full-time project manager in e-commerce, but not passionate about his day-to-day. He was able to use his skills from this position to build his own online ventures.
Neal says he started his online business as a side hustle, with the intention of always having a full-time job keeping his household afloat. He has now been able to transition into being a full-time internet entrepreneur.
Korobov, the career and success strategist, also started to prepare for her career change with a part-time entrepreneurial venture that grew out of corporate coaching. “I wanted to go into business for myself as a career strategist for women, and I knew that having corporate coaching experience would fast-track my credibility with a lot of potential clients,” she says.
“I began offering workshops and brown-bag lunches at my office,” Korobov continues. This experience was a valuable lesson for Korobov in how to make a career change, helping her boost her confidence and allowing her to tweak her workshops as she got more experience.
One of Korobov’s biggest tips to prepare for a career change that she learned firsthand: “Your entrepreneurial ventures, even if done part-time, can make the transition into your career smoother, while giving you extra income to help with your financial preparation process.”
Ensure your path to career-change success
Making a career change can seem like a huge risk, since you don’t really know if it will work out in your favor. But with research and readiness, you can confidently prepare for a career change. Dyson, of The Voice of Job Seekers podcast, can’t emphasize enough that âpreparation in every formâfrom updating job skills to financial planning and really taking time to think about what you desire in a fulfilling careerâwill be a huge factor in your career-change success.”
Understanding your goals and expectationsâand trusting your gutâbefore you begin is a big step in the right direction. Says Cassella of her move into real estate: “It just made a lot of sense for me and my family. My expectations are that once I really get going, there is no limit to what I can make.”
The post Taking the Leap: How to Make a Career Change and Land on Your Feet appeared first on Discover Bank – Banking Topics Blog.
Love it or hate it, many Americans are spending more time at home. The coronavirus pandemic not only accelerated the work-from-home trend to warp speed, but it also shuttered schools and summer camps, scratched travel plans and canceled brunch and dinner reservations across the country.
Jen Dawson, a certified financial planner and managing director in Chicago, found that the uncertainty and stay-at-home lifestyle created by the pandemic prompted her clients to look at their financial situations in a new light.
âI think it just gives opportunities for people and families to reflect,â Dawson says. ââWhat do we want out of life? What do we want from our money?â Those conversations are really valuable.â
As Dawsonâs clients reflect on their goals, they (and many others) are also wondering, âHow should I adjust my household budget if weâre spending more time at home?â
How to optimize your budget for the stay-at-home economy in 4 steps
Ellen Rogin, a former wealth advisor and now a speaker, author and entrepreneur, notes that people across the country were affected by the pandemic in very different ways. While many workers were able to keep their jobs as they transitioned to working from home, many were not.
âThere are people who have lost their jobs and are being forced to make difficult decisions,â Rogin says. âAnd there are people who are still employed and earning the same income they did before, who have more options as they decide how they’re spending their money now.â
Even if youâve been spared serious financial challenges, you should still consider updating or creating a household budget or spending plan. This will allow you to determine how to save more money in the stay-at-home economy.
Rogin and Dawson encourage you to use this opportunity to ensure youâre at least staying on track to meet your savings goalsâand at best, shortening your savings timelines. Itâs also a chance to make sure that your spending habits, which have likely changed as youâve spent more time at home, are maximizing your happiness.
Below, we break down insights from Rogin and Dawson into four actionable steps you can take to save money in quarantine while living the best life possible. It all starts with taking an objective look at how your spending habits changed as you transitioned to a more domestic lifestyle.
Read on to see how to save more money in the stay-at-home economy by creating a new household budget:
1. Compare your spending trends before and during quarantine
As you set about creating a household budget for an at-home lifestyle and determining how to save more money in the stay-at-home economy, start by reviewing your spending.
âMost people donât really know how much money theyâre spending, whether times are good or bad. But it can really make you feel calmer to know what it takes to run your lifestyle.â
Dawson encourages you to refer to your debit and credit card statements to analyze the differences between your spending before staying home became the norm, and after. âYou can compare it and contrast and have observations and discussions around what changed,â she says. âWhat do you like that you want to keep going, and what do you not like about it?”
All you need, Dawson says, is a spreadsheet to total up your major expenses, such as housing, utilities, transportation, food and dining, travel, shopping and entertainment. Then, subtract the sum of those costs from the money you earned (aka income) over the same timeframe.
Do this exercise for three months of spending before quarantine and then again for three months of spending during quarantine. Youâll be able to compare the data to see whether you have more or less disposable income as a member of the stay-at-home economy.
Rogin notes that it can be a little scary to examine your finances like this, but thereâs no reason to feel anxious.
âMost people donât really know how much money theyâre spending, whether times are good or bad,â she says. âBut it can really make you feel calmer to know what it takes to run your lifestyle.â
If you see that your disposable income decreased while in quarantine (or that you no longer have disposable income at all), then youâll need to find ways to cut back on spending if you want to keep your savings goals on track. If your extra cash increased and youâre actually saving more money in quarantine, then you can start to consider how you might hit some or all of your savings goals more quickly.
Either way, you still have work to do as you consider how to save more money in the stay-at-home economy. Rather than focusing on external factors that are out of your control, Rogin and Dawson recommend that, as a next step, you ask yourself what matters most to you.
2. Ask yourself how your spending habits impact your happiness
Rogin considers the distanced, more remote way of life as a chance to reflect on whatâs really important in order to create your household budget. One example she points to is how many people have been cooking at home far more often than they once did.
âMaybe youâre spending more on groceries, but thatâs less than you were spending on eating outâand you enjoy it,â she says. âYouâre spending more time with your family. Youâre eating more healthily. So it gives you the opportunity to really assess your budget in a different way.â
Another example is travel. Rogin says that some people have told her that they really miss it, but others have been surprised to find how happy they are to pump the brakes on their jet-setting ways. In addition to saving money in quarantine from reimbursed travel and no more expensive trips, itâs allowed them to slow down and enjoy their time at home with family.
For her part, Rogin found that she wore the same two pairs of shoes during quarantine because theyâre comfortable, and no one can see them when sheâs video conferencing during work. As a result, Rogin cut this expense from her stay-at-home budget.
Whether youâre facing a cash shortage or surplus from more time spent at home, Rogin says that extending this line of thinking into a âvalues-based spending planâ for the stay-at-home economy will allow you to direct your money to what matters most to you, while diverting funds away from what doesnât.
Once you add up the expenses that are no longer necessary in your stay-at-home budget, itâs time to put that money to work.
Tip: When looking at quarantine spending, donât get too granular
Dawson underscores that evaluating spending patterns can be an emotional exercise. If youâre reviewing your finances with a family member, partner or spouse, try to resist the urge to nitpick every purchase. The trends should be easy enough to spot from a birdâs-eye view.
3. Put your stay-at-home savings toward your financial goals
Dawson and Rogin recommend having a plan when youâre trying to figure out how to save more money in the stay-at-home economy. That plan should include what youâre saving for, as well as where youâll keep the funds as they add up.
Rogin recommends framing your financial goals from a positive angle. For example, when you create a household budget, instead of focusing on cutting spending, you can set a goal for how much extra money you want to save.
If you have children or live with a partner or spouse, Dawson notes that this goal-oriented approach can help get them involved. The objective might be to start an emergency fund to ride out unexpected headwinds. Or, the focus could be on saving up for a big vacation to look forward to when travel restrictions ease.
When deciding where to keep your savings, a standard checking account wonât allow your money to grow like a high-yield online savings account will. Rather than pooling the money youâve saved in quarantine into one account, Dawson suggests opening multiple savings accounts, one for each of your savings goals.
âBe really clear about what each savings account is for,â she says. âThen youâre more likely to fund it.â
Of course, luxury savings goals like a vacation should not take priority over your long-term savings goals, such as retirement or college funds.
4. When saving money in quarantine, remember to support those in need if you can
If you are saving money in quarantine, Rogin suggests considering all the benefits of earmarking extra cash for philanthropic causes. It could go directly to the local small businesses you love that are hurting for revenue. Or it could go to any number of nonprofit organizations that are doing good in the world.
âSo many people are in need now,â Rogin says. âThere are so many beautiful ways that can help you feel like youâre making a difference for people by reallocating some of that money towards causes and people that you want to support.â
How will you start saving money in quarantine?
The stay-at home lifestyle may not have been in your plans, but you have the opportunity to gain control of your finances inside your home by creating a household budget that works for you in this new reality.
When you analyze, assess and optimize your spending and consider how to save money in quarantine, youâll be in as strong a financial position as possible when life gets back to normal.
If youâve been fortunate enough to save money in quarantine, consider starting or adding to your emergency fund. Not sure where to store your savings? Check out the four best places to keep your emergency fund.
Articles may contain information from third-parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.
The post How to Save More Money in the Stay-at-Home Economy by Focusing on What Matters Most appeared first on Discover Bank – Banking Topics Blog.
You just learned of the passing of a loved one. During this stressful and emotionally taxing time, you also find out that you’re receiving an inheritance. While you’re grateful for the unexpected windfall, knowing what to do with an inheritance can bring its own share of stress.
While the amounts vary greatly, the Federal Reserve Board’s Survey of Consumer Finances reports that an average of roughly 1.7 million households receive an inheritance each year. First words of wisdomâresist the urge to spend it all at once. According to a study funded by the Bureau of Labor Statistics, one-third of people who receive an inheritance spend all of itâand even dip into other savingsâin the first two years.
Not me, you say? Still, you might be asking, “What should I do with my inheritance money?” Follow these four steps to help you make smart decisions with your newfound wealth:
1. Take time to grieve your loss
Deciding what to do with an inheritance can bring with it mixed emotions: a sense of reprieve for this unexpected financial gain and sadness for the loss of a loved one, says Robert Pagliarini, certified financial planner and president of Pacifica Wealth Advisors.
During this time, you might feel confused, upset and overwhelmed. âA large inheritance that pushes you out of your financial comfort zone can create anxiety about how to best manage the money,” Pagliarini says. As an inheritor, Pagliarini adds that you may feel the need to be extra careful with the funds; even though you know it is your money, it could feel borrowed.
The last thing you want to do when deciding what to do with an inheritance is make financial decisions under an emotional haze. Avoid making any drastic moves right away, such as quitting your job or selling your home. Some experts suggest giving yourself a six-month buffer before using any of your inheritance, using the time instead to develop a financial plan. While you are thinking about things to do with an inheritance, you can park any funds in a high-yield savings account or certificate of deposit.
âA large inheritance that pushes you out of your financial comfort zone can create anxiety about how to best manage the money.â
2. Know what you’re inheriting
Before you determine the things to do with an inheritance, you need to know what you’re getting. Certified financial planner and wealth manager Alex Caswell says how you use your inheritance will largely depend on its source. Typically, Caswell says an inheritance will come in the form of assets from one of three places:
Real estate, such as a house or property. As Caswell explains, if you receive assets from real estate, you will transfer them into your name. As the inheritor, you can choose what to do with the assetsâtypically sell, rent or live in them.
A trust account, a legal arrangement through which funds are held by a third party (the trustee) for the benefit of another party (the beneficiary), which may be an individual or a group. The creator of the trust is known as a grantor. âIf someone inherits assets through a trust, the trust documents will stipulate how these assets will be distributed and who ultimately decides how they are to be invested,” Caswell says. In some cases, the assets get distributed outright to you; in other instances, the trust stays intact and you get paid in installments.
A retirement account, such as an IRA, Roth IRA or 401(k). These accounts can be distributed in one lump sum, however, there may be requirements related to the amount of a distribution and the cadence of distributions.
When considering things to do with an inheritance, know that inherited assets can be designated as Transfer on Death (TOD) or beneficiary deeds (in the case of real estate), which means the assets can be transferred to beneficiaries without the often lengthy probate process. An individual may also bequeath cash or valuables, like jewelry or family heirlooms, as well as life insurance or stock certificates.
Caswell says if your inheritance comes in the form of investment assets, such as stocks or mutual funds, you’ll want to think of them as part of your own financial picture. âAll too often, we see individuals end up treating inherited assets as a living extension of their passed relative,” Caswell says. Consider how the investments can be used to support your financial goals when thinking about things to do when you get an inheritance.
An average of roughly 1.7 million households receive an inheritance each year.
3. Plan what to do with your financial gain
Just like doing your household budgeting, it’s important to “assign” your inheritance to specific purposes or goals, says Pacifica Wealth Advisors’ Pagliarini. Depending on your financial situation, the simple concepts of save, spend and give may be a good place to start when deciding on things to do when you get an inheritance:
Bolster your emergency fund: You should have at least three to six months of living expenses saved up to avoid unexpected financial shocks, such as job loss, car repairs or medical expenses. If you don’t and you’re deciding what things to do with an inheritance, consider parking some cash in this bucket.
Save for big goals: Now could be a good time to boost your long-term savings goals and pay it forward. Things to do when you get an inheritance could include putting money toward a child’s college fund or getting your retirement savings on track.
Tackle debt: If you’re evaluating what to do with an inheritance, high-interest debt is something you could consider paying off. Spending on debt repayment can help you save on hefty interest charges.
Reduce or pay off your mortgage: Getting closer to paying off your homeâor paying it off entirelyâcan also save you in interest and significantly lower your monthly expenses. Allocating cash here is a win-win.
Enjoy a little bit of it: It’s okay to use a portion of your inheritance on something you enjoy or find rewarding. Planning a vacation, investing in more education or paying for a big purchase could be good moves.
Donate funds to charity: Thinking about your loved one’s causes or your own can continue legacy goals and provide tax benefits.
When deciding what to do with an inheritance, taxes will need to be considered. “It is extremely important to be aware of all tax ramifications of any decision around inherited assets,” Caswell says. You could be required to pay a capital gains tax if you sell the gift (like property) that was passed down to you, for example. Also, depending on where you live, your inherited money could be taxed. In addition to federal estate taxes, several U.S. states impose an inheritance tax and/or an estate tax.
Since every situation is unique and tax laws can change, when considering things to do with an inheritance, consult a financial advisor or tax professional for guidance.
Make your windfall count
Receiving an inheritance has the potential to change your financial picture for good. When thinking about the things to do when you get an inheritance, be sure to give yourself ample time to grieve and to understand all of your options. Don’t be afraid to lean on the experts to get up to speed on any tax and legal implications you need to consider.
Planning can go a long way toward making the right decisions concerning your newfound wealth. Being responsible with your inheritance not only helps ensure your financial future, but will also honor your loved one’s legacy.
The post 4 Smart Things to Do When You Get an Inheritance appeared first on Discover Bank – Banking Topics Blog.
Summer camp is a rite of passage. A place where traditions begin and memories are made. A unique venue with a structured opportunity for kids to grow and learn new skills. As enriching as it may seem, embarking on the process each year can be intense: How do I choose a camp? Should it have a philosophy? How do I know my child will have fun? But often the question at the top of the list is, “How do I budget for summer camp?”
Whether you’re scrambling for camp arrangements for this year or getting a jump-start on next summer, you’re in need of a working budget for summer camp. “As a parent who sent several kids to summer camp for many years, I know how expensive it can be,” says Leslie H. Tayne, author and founder of debt solutions law firm Tayne Law Group.
Read on for expert budgeting tips for summer camp and how to save money on summer camp so you can make the best decisions concerning your wallet and your child’s wish list:
1. Get a handle on camp tuition
According to the American Camp Association, sleep-away camp tuition can range from $630 to more than $2,000 per camper per week. Day camp tuition isn’t too far behind, ranging from $199 to more than $800 per week.
One of the best ways to budget for summer camp and prepare for tuition costs is to understand your needs for the summer as well as your child’s interests. This will help you determine ‘how much’ and ‘what type’ of camp you want: Is day-camp coverage important all summer because of work? Does your child want to experience sleep-away camp for a portion of the time? Is a camp with a specific focus (say a sport or hobby) on the list?
Depending on your circumstances and child’s expectations, it’s not unusual to be looking at a combination of campsâand tuition costsâin one season. If you have multiple kids at different ages, with different interests, creating a budget for summer camp and understanding how much you’ll need to dish out in tuition becomes especially important.
Once your camp plan is in place, assess how much you’ll need to pay in tuition for the summer months with school out of session. The sooner you’ve arrived at this figure, the easier it will be to work the expense into your household budget, says Heather Schisler, money-saving expert and founder of deal site Passion for Savings. “It’s much easier to set aside $30 a month than it is to come up with $300 to $400 at one time,” Schisler says.
Sleep-away camp tuition can range from $630 to more than $2,000 per camper per week. Day camp tuition ranges from $199 to more than $800 per week.
2. Plan for expenses beyond tuition
One of the biggest budgeting tips for summer camp is planning for the many costs outside of tuition. Tayne points out that sleep-away camp usually comes with a longer supply list than day campâsuch as specific clothing or gear and toiletries to cover the length of stay. If your child is heading to a sleep-away camp far from home, your budget for summer camp may also need to factor in the cost of transportation or the cost to ship luggage. Day camps can also have fees for extended hours or transportation if your child rides a camp bus each day.
Once you’ve selected a campâday camp or sleep-awayâcheck its website for camper packing lists and guidelines. Most camps offer checklists that you can print out, which can be good for tracking supplies and costs as you go. After you enroll, your camp may provide access to an online portal that can help you manage tuition and track additional expenses, like canteen money, which is cash your child can use for snacks and additional supplies while away.
3. Create a year-round savings strategy
By calculating the necessary expenses ahead of time for the camps you and your campers have chosen, you’ll be able to determine an overall budget for summer camp. A budgeting tip for summer camp is to save money monthly throughout the year. To determine a monthly savings goal, divide your total summer camp costs by the amount of months you have until camp starts. If camp is quickly approaching and you’re feeling the budget crunch, you may want to start saving for next year’s costs once it’s back-to-school time so you can spread out your costs over a longer period of time.
Once you start saving, you’ll need a place to put it, right? When it comes to budgeting tips for summer camp, consider placing your cash in a dedicated account, which will keep it separate from your regular expenses and help you avoid tapping it for other reasons. “Then you can have your bank set up an auto draft [for the summer camp money] so it automatically goes into your account each month and you will have the money you need when summer rolls around,” Schisler says. If you use a Discover Online Savings Account for this purpose, you’ll also earn interest that can be put toward camp expenses.
âIt’s much easier to set aside $30 a month than it is to come up with $300 to $400 at one time.â
4. Find ways to fund your summer camp account
To boost cash in your summer camp savings account, consider asking relatives and family friends to gift your children cash for camp in lieu of birthday and holiday gifts, says Tracie Fobes of budget blog Penny Pinchin’ Mom. “If your child has his or her heart set on sleep-away camp, they may be willing to forgo a gift or two,” Fobes says.
Another budgeting tip for summer camp is to put your cashback rewards toward your budget for summer camp. For example, if you open a checking account with Discoverâcalled Cashback Debitâyou’ll earn 1% cash back on up to $3,000 in debit card purchases each month.1 You can enroll to have that cashback bonus automatically deposited into your Discover Online Savings Account so it remains designated for camp costs (and can grow with interest).
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Lastly, if you don’t have your tax refund earmarked for another financial goal, you could use the windfall to kick-start your summer camp savings fund. Depending on the refund amount and your total camp costs, it could reduce your monthly summer camp savings goal significantly.
5. Reduce camp-related costs
Despite having your budget for summer camp in full view and planning in advance, camp can still be expensive. Here are some ways to save money on summer camp by cutting down on camp costs:
Ask about scholarships and grants: “Some camps offer scholarships or discounts for children and families,” Fobes says. Research your camp to see if they have anything similar to help offsetâor even pay forâthe cost of tuition.
Use a Dependent Care Flexible Spending Account (DCFSA): A Dependent Care Flexible Spending Account is a pre-tax benefit account that can be used to pay for eligible dependent care services. You can use this type of account to “cover dependent care [costs], and camp may qualify,” Fobes says.
Negotiate price: “Many people don’t think about negotiating the cost of summer camp, but it is possible,” Tayne says, and more and more camps are open to it.
See if there’s an “honor system”: Some camps have what’s known as an honor system, where the camp offers a range of costs, or tiered pricing, and parents can pay what they can comfortably afford. Every child enjoys the same camp experience, regardless of which price point, and billing is kept private.
Take advantage of discounts: Attention early birds and web surfers: “There are sometimes discounts offered when you sign up early or register online,” Fobes says.
Volunteer: If your summer schedule allows, “offer to work at the camp,” Fobes says. If you lend your servicesâperhaps for the camp blog or cleaning the camp house before the season startsâyour child may be able to attend camp for free or a reduced rate.
Don’t let summer camp costs become a family budget-buster. Plan ahead and look for money-saving opportunities and work your budget for summer camp into your annual financial plan.
To save money on summer camp, remember that you only need to focus on camp necessities. “Don’t spend a lot of extra money on new clothing, bedding, trunks or suitcases,” Schisler says. “Remember, summer camp is all about the experience, not the things.”
1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as VenmoÂ® and PayPal, who also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries.
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Spring is here and it’s time to open the doors, shake out the rugs, and let some of that fresh air into your life again. Whether or not you’ve just endured a brutal, snowy winter, spring is a great time to make some positive changes that will help keep your momentum up all year long.
Here are 8 ways that you can spring clean your entire life, starting right now as we head into summer.
#1 Get started on your taxes and finances for next year
Yes, I know you probably just finished doing your taxes for last year, but there’s no better time to get everything in order for this year. If tax time is particularly stressful for you, get a jump start on entering your expenses and income into your favorite financial tracker Mint to make next year’s tax season a breeze. The first quarter of the year is already over, so don’t wait to get on top of your finances.
#2 Cut the monthly recurring clutter
If you have your bank and credit accounts linked up together with Mint, take a moment to review any monthly recurring expenses that you aren’t still using. You might be able to save hundreds of dollars by cutting out an unused gym membership now that the weather is nicer outside. To take full advantage of the beautiful weather, try pausing or canceling a streaming video subscription for a few months; you can always go back to it later when you want to spend more time inside again.
#3 Declutter one item or more per day
A big part of spring cleaning is clearing out the clutter that might have accumulated over the winter in your home. The best part is, decluttering doesn’t have to be terrible. You can make a fun game out of it by donating, selling, or recycling one thing every day for the entire month. Feeling ambitious? Try playing The Minimalist Game, which starts on a new month and ramp up the number of items you declutter as you go. One on the first day, two on the second day, three on the third, and so on.
#4 Clear out the closet and donate any clothes youâre not wearing
Especially if you live in a colder climate, it’s probably time to change over your wardrobe to a more seasonally-appropriate selection. Instead of packing all of winter clothes away, donate any sweaters and winter wear that didn’t get used over the last four months or so, then pack away the rest for when you’re ready to use it again. If you want to give a capsule wardrobe a try, check out Project333â33 items of clothing for three months.
#5 Eat a salad as a meal every day
While winter is the perfect time for hearty soups and stews, it’s time to break out the salad tongs and lighten up your fare. Try replacing one of your meals with a big salad each day and see how it makes you feel after a few weeks. It doesn’t have to be lettuce in a bowl either, you can get creative with your vegetables, toppings and dressings. Not only is this a great way to eat more greens, but you can save a bunch of money by preparing a lunch like this in advance instead of buying lunches out while at work.
#6 Dust the surfaces and corners in your home
If you’re going to do some spring cleaning, it should probably include some actual cleaning, right? Grab the duster and vacuum and pay special attention to the corners, nooks, and crannies around your home. A little attention to some often ignored areas can go a long way in making your space feel clean, open, and inviting. Now is a great time to pull your furniture and appliances out from the wall, wipe down cabinets, and dust the blinds.
#7 Check in on all of your credit cards, bank accounts, and monitor your credit score
About once a year, itâs good to make sure you actually have all of your credit and debit cards. Have you been locked out of your online savings account for a while? Call the company and get it figured out. Locate all of your physical credit and debit cards and make sure they’re all securely stored in your wallet or somewhere safe.
Most importantly, check your credit profile to make sure everything is on point and there aren’t any issues you weren’t aware of. You can use your Mint.com account to check your credit score without impacting your credit, and regularly monitor it completely free. It’s a great option that doesn’t require pulling your full report or paying for active monitoring.
#8 Change your passwords and enable 2-factor authentication when possible
Yes, it’s totally a pain but the best time to change and update any old or duplicated passwords is right now. Especially if you use the same password across several different sites, itâs important to change them up and use proper, secure passwords for each site. I highly recommend using a password manager like LastPass or Dashlane, they both streamline the process and make it easy to manage a huge number of proper passwords.
Even if you just pick a few of these ideas, you’ll surely reap the rewards of doing some spring cleaning this month. The more space you create for all the right things, the more easy and fun the rest of your year will be. Letâs get cleaning!
The post 8 Ways to Spring Clean Your Entire Life appeared first on MintLife Blog.
If you have an irregular income, you know how great the good times feelâand how difficult the lean times can be. While you can’t always control when you get paid or the size of each paycheck if you’re a freelancer, contractor or work in the gig economy, you can take control of your money by creating a budget that will help you manage these financial extremes.
Antowoine Winters, a financial planner and principal at Next Steps Financial Planning, LLC, says creating a budget with a variable income can require big-picture thinking. You may need to spend time testing out different methods when you first start budgeting, but, âif done correctly, it can really empower you to control your life,” Winters says.
How do you budget on an irregular income? Consider these four strategies to help you budget with a variable income and gain financial confidence:
1. Determine your average income and expenses
If you want to start budgeting on a fluctuating income, you need to know how much money you have coming in and how much you’re spending.
Of course, that’s the basis for any budget. But it can be particularly important if you’re trying to budget on an irregular income because you may have especially high- or low-income periods. You want to start tracking as soon as possible to build up accurate data on your average income and expenses.
For example, once you have six months’ worth of income and expenses documented, you can divide the total by six to determine your average income and expenses by month.
Many financial apps and websites can help with the tracking, including ones that can connect to your online bank and credit card accounts and automatically pull in your transactions. You may even be able to pull in previous months’ or years’ worth of data, which you can use to calculate your averages.
If you’re budgeting on a fluctuating income and apps aren’t your thing, you can use a spreadsheet or even a pen and notebook to track your cash flow. However, without automated tracking, it can be difficult to consistently keep your information up to date.
2. Try a zero-sum budget
“There are several strategies you can use to budget with an irregular income, but one of the easiest ones is the zero-sum budget,” says Holly Johnson. As a full-time freelance writer, she’s been budgeting with a variable income for over seven years and is the coauthor of the book Zero Down Your Debt.
With a zero-sum budget, your income and expenses should even out so there’s nothing left over at the end of the month. The trick is to treat your savings goals as expenses. For example, your “expenses” may include saving for an emergency, vacation or homeownership.
“There are several strategies you can use to budget with an irregular income, but one of the easiest ones is the zero-sum budget.”
Johnson says if you’re budgeting on a fluctuating income, you can adopt the zero-sum budget by creating a “salary” for yourself. Consider your average monthly expenses (shameless plug for tip 1) and use that number as your baseline.
For example, if your monthly household bills, groceries, business expenses, savings goals and other necessities add up to $4,000, that’s your salary for the month. During months when you make over $4,000, put the extra money into a separate savings account. During months when you make less than $4,000, draw from that account to bring your salary up to $4,000.
“We call this fund the ‘boom and bust’ fund,” Johnson says. “By building up an adequate amount of savings, you will create a situation where you can pay yourself the salary you need each month.”
3. Separate your saving and spending money
Physically separating your savings from your everyday spending money may be especially important when you’re creating a budget on an irregular income. You may be tempted to pull funds from your savings goals during low-income months, and stashing your savings in a separate, high-yield savings account can force you to pause and think twice before dipping in.
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An easy way to put this tip into action when creating a budget with a variable income is to have all of your income deposited into one account, then disburse it into separate savings and spending accounts. “Transfer a set amount on the first of every month to a bill-paying account and a set amount to a spending account,” Winters, the financial planner, says.
“The bill pay account is used to pay for all of the regular expenses, like rent, insurance, car payments, student loans, etc.,” Winters says. These bills generally stay the same each month. The spending account can be used for your variable expenses, such as groceries and gas.
When considering your savings accounts, Winters also suggests funding a retirement account, such as an Individual Retirement Account (IRA).
If you’re budgeting on a fluctuating income as a contract worker or freelancer, you may also want to set money aside for taxes because the income and payroll taxes you’ll owe aren’t automatically taken out of your paychecks.
4. Build up your emergency fund
“The best way to weather low-income periods is to prepare with an adequate emergency fund,” freelancer Johnson says. An emergency fund is money you set aside for necessary expenses during an emergency, such as a medical issue or broken-down vehicle.
Generally, you’ll want to save up enough money to cover three to six months of your regular expenses. Once you build your fund, you can put extra savings toward other financial goals.
When you’re budgeting on a fluctuating income, having the emergency fund can help you feel more at ease knowing that you’ll be able to pay your necessary bills if the unexpected happens or when you’re stuck in a low-income period for longer than anticipated.
A budget can make living with a variable income easier
It can be challenging to budget on an irregular income, especially when you’re first starting. You might have to cut back on expenses for several months to start building up your savings and try multiple budgeting methods before finding the one that works best for you.
“Budgeting requires a mindset change regardless of which type of budget you try,” Johnson explains.
“The best way to weather low-income periods is to prepare with an adequate emergency fund.”
However, once in place, a budget on an irregular income can also help free you from worrying about the boom-and-bust cycle that many variable-income workers deal with throughout the year.
The goal is to get to the point where you can budget with a variable income and don’t have to worry about when you’ll get paid next because you set your budget based on your averages, planned ahead during the high times and have savings ready for your low times.
The post 4 Tricks for Budgeting on a Fluctuating Income appeared first on Discover Bank – Banking Topics Blog.