Posted by: John S Kiernan
Discover claims to treat you like you treat you, and that sounds great. But it’s still fair to wonder which Discover card – if any – you should actually treat yourself to. Because let’s face it: You don’t want the best Discover card; you want the best overall credit card for your individual needs. After all, what good is a credit card from a given issuer if getting it means racking up costly fees and sacrificing hundreds of dollars in potential rewards?
With that in mind, WalletHub’s editors compared Discover’s flagship credit cards to the best deals from the rest of the market to see which offers best address the most common consumer needs. You can find a summary of the winners and losers for each category below. To learn more about a particular match-up, just click on the category name. And to see what type of credit card you’re likely to get approved for, you can check your credit score for free on WalletHub, the only site that offers scores and full credit reports updated daily.
| Best For... | Discover's Best | Best Feature | Editors' Rating | Learn More |
|---|---|---|---|---|
| Cash Back | Discover it® - Cashback Match™ | Up to 10% cash back the first year | 3.3 Stars | Editors’ Notes |
| Travel Rewards | Discover it® Miles | Earn and redeem with any airline | 3.4 Stars | Editors’ Notes |
| (Re)building Credit | Discover it® Secured Card - No Annual Fee | Rewards, doubled the first year | 5 Stars | Editors’ Notes |
| College Students | Discover it® for Students | Up to 10% cash back the first year | 4.7 Stars | Editors’ Notes |
There’s a lot to like about the Discover it® - Cashback Match™, considering that the average person could earn as much as $1,576 over the first two years of use, according to our calculations. Much of that value is front-loaded, however, thanks to Discover’s generous offer to double your first-year earnings. And you really have to work to maximize what you earn, since the highest rewards rates apply only to bonus categories that change on a quarterly basis.
We aren’t big fans of rotating bonus categories, given their quarterly sign-up requirements and the fact that most purchases inevitably won’t qualify for bonus earning rates. So if you’re going to go the Discover it route, do so with your eyes open (and perhaps plans for a quick exit).
Side-By-Side Comparison: Discover it® - Cashback Match™ vs. Citi® Double Cash Card – 18 month BT offer
Best Discover Card: Travel Rewards
The Discover it® Miles is a decent offer that requires good credit to qualify, but this it card’s terms really can’t hang with the market’s elite. There are simply too many great deals available these days to waste time and rewards potential on Discover it Miles.
It’s also worth noting that Discover isn’t accepted by as many merchants or in as many countries as Visa and Mastercard. International travelers and folks who shop from foreign-based merchants should make sure to take that into account.
Side-By-Side Comparison: Discover it® Miles vs. Barclaycard Arrival Plus™ World Elite MasterCard®
Best Discover Card: (Re)building Credit
The Discover it® Secured Card - No Annual Fee doesn’t charge an annual fee but does offer rewards. That alone makes it an amazing deal, especially for people with bad credit. The fact that its rewards are really good only adds to the appeal.
You get 2% cash back – double the market average for a rewards card – on the first $1,000 you spent at restaurants and gas stations each quarter, in addition to 1% cash back on all other purchases. And as the grand finale, Discover will double all of the rewards you earn the first year.
Side-By-Side Comparison: Discover it® Secured Card - No Annual Fee vs. Capital One® Secured Mastercard®
Best Discover Card: Students
The Discover it® for Students has the potential to be one of the most rewarding student cards on the market, especially if you qualify for the $20 yearly good-student bonus. But it won’t make things easy on you. Exactly how valuable the Student it Card will be depends on how much you spend in its bonus categories, not to mention your ability to actually sign up for the bonus rates each quarter.
Side-By-Side Comparison: Discover it® for Students vs. Journey® Student Rewards from Capital One®
Whichever card you choose, we recommend signing up for a free WalletHub account. You’ll be able to track your credit score’s progress, learn from the grades on your credit scorecard and enjoy 24/7 credit monitoring.
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Posted by: Odysseas Papadimitriou
Your credit score is essentially your credit history expressed as an easy-to-reference number. You can think of it as a grade for how responsibly you’ve managed loans, lines of credit, and other financial obligations over the years. Credit scores are extremely important because they affect your mortgage rates, the credit card offers that you receive, the premiums that you pay on your car insurance, your ability to buy a car, and even where you are able to live and work.
Interestingly, the breadth of a credit score’s impact is one thing that many consumers do not really comprehend. “I don't think consumers are aware that credit scores are used by potential employers, potential landlords and others to make important decisions (and judgments) about that individual nor do they understand the negative impact of a poor credit history,” says Maureen Karig, senior research associate with the Center for Business and Industrial Studies at the University of Missouri – St. Louis. “Consumers need to take their credit histories seriously and understand that credit reports can show every mistake one has made and that a poor score is costly.”
It’s therefore worth checking out the following sections below:
Credit Scores In DepthCredit scores are all based on the information in your major credit reports, and understanding that connection is the first step to understanding your credit score. This also represents a knowledge gap for a lot of people.
"Most consumers don’t have a clear idea how credit scores work and what on a credit report determines a credit score,” says Larry Garvin, a professor at The Ohio State University College of Law who specializes in small business and entrepreneurial finance. “I suspect most know that the two are related, but I also suspect most don’t know how. Probably most of this deficiency is due to weak financial literacy, with some due to weak literacy and some due to the sheer amount of information and disinformation that’s out on the Web or elsewhere."
So, let’s clear a few things up.
Contrary to popular belief, you don’t have just a single credit score that everyone references. There are actually more than 1,000 different types of credit scores available, and they use different calculation methods and information sources and are based on different ranges (i.e. they’re out of different maximum numbers).
The most widely used credit scores are those from VantageScore and the Fair Isaac Corporation. Although an individual can have more than 50 different credit scores just from these two companies, each company’s scores all tend to share the same general composition. Below, you can find the breakdown of the ingredients in the scores that you’re most likely to both come across and be evaluated with. Keep in mind that while other credit scores may be calculated differently, it’s fair to expect that if you have good marks in each of the following categories, your credit score will be good regardless of the particular model used.
 |
 |
| VantageScore | FICO Score |
- Payment History
- Amounts Owed (Utilization, Balances & Available Credit)
- Length/Depth of Credit History
- Types of Credit Used
- New/Recent Credit
Payment history is the most important component of any credit score, accounting for up to 40% of your overall rating. It is based on the records the major credit bureaus – Experian, Equifax, and TransUnion – keep, which indicate the following:
- The number of loan and credit accounts that you have always paid on time.
- The number of accounts for which you are currently at least 30 days behind on payment.
- Whether or not you have gone bankrupt, been ordered by a court to pay amounts owed, had past due accounts sent to collections, or have fallen at least 30 days behind on a loan or line of credit. The recency of these items will also factor in.
- How many days past due you are on delinquent accounts.
- The dollar amount past due you are on delinquent accounts and/or accounts sent to collections.
Given that a credit score is a reflection of your financial responsibility, it makes sense that you will be knocked for failing to make payments as agreed on certain types of accounts.
Amounts OwedThe money that you owe to creditors and lenders accounts for at least 30% of your score. The decision makers who use credit scores want to get a sense of whether or not your spending habits are sustainable as well as the likelihood that your current debt burden will lead to serious problems with your finances in the future.
The Amounts Owed component of your score is comprised of:
- The number of accounts that you carry a balance on.
- Your credit utilization ratio.
- How much you owe on existing credit cards and installment loans.
Lower is better with each of these data points, which may be grouped together or separated into individual scoring categories, depending on the type of credit score. VantageScore, for example, has separate categories for balances, available credit and utilization.
Length/Depth of Credit HistoryThis portion of your score merely reflects the length of time that you have been using loans and lines of credit. People with a long track record of responsible money management are viewed favorably by creditors, and years of positive information will make the occasional missed payment less impactful.
This, along with the types of credit you use, comprises the Depth of Credit portion of a VantageScore.
Types of Credit UsedThis credit-score component indicates how well-rounded your financial management skills are based on the different types of accounts (e.g. credit cards, installment loans, retail lines of credit, mortgages, etc.) you’ve used and how recently you have used them.
New/Recent CreditCredit-scoring companies use this “what have you done for me lately” category to emphasize recent financial performance, as it – perhaps more than anything else – indicates future performance. This section includes:
- The number of loans and lines of credit you have taken out in recent months as well as how that number compares to the total number of accounts in your credit history.
- How long it has been since you’ve opened your newest accounts.
- The number of hard inquiries (i.e. how many times you’ve applied for credit) made into your credit history in the last 12 months.
- How long it has been since your last credit inquiry.
In short, creditors want to determine whether or not you are desperate for additional credit, as that may reflect negatively on your current financial situation.
How Credit Scores Change Over TimeAs you might expect given the aforementioned metrics and the fact that credit scores are based on data from your major credit reports, your credit score is a fluid entity. In other words, it stands to change over time as you open new accounts, your spending and payment habits change, etc.
This new information is factored into your credit score each time an inquiry is made (i.e. when a creditor reviews your credit history). It’s interesting to note that people have reported month-to-month credit score fluctuations of around 20 points without anything significant changing in their credit profiles.
Checking Your Credit ScoreIf you are interested in checking your credit score, there are a number of ways that you can do so. However, you should also note that doing so may not be necessary.
For starters, there are countless different credit scoring models and creditors often modify them with proprietary algorithms, therefore creating their own credit scores which you will not be able to access. Depending on the particular model, ordering your credit score may also cost money. It’s therefore an inefficient (and potentially endless) pursuit to try to get the exact credit score that your lender uses.
Taking advantage of your right to a free copy for each of your major credit reports once a year is far more beneficial. Credit scores are based on the information in these reports, after all, and you can easily get a sense of your standing (as well as identify errors and fraud) by simply reviewing your reports.
Many consumers fail to recognize the value of reviewing their credit reports relative to checking their credit scores because they don’t differentiate the two in their minds. But don’t worry if you’re in that boat. Consumer law expert Cary Flitter, who is a practicing attorney and an adjunct professor of law in the Philadelphia area, says that he “would not expect them to” comprehend the difference. “It’s a bit subtle.”
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Posted by: John S Kiernan
A credit score of 700 is generally considered “good.”, though individual lenders are the ones who ultimately make that determination. That’s important because a credit score of 700 on the standard 300 to 850 scale nearly qualifies as “excellent” (good credit ranges from 660 to 719). So if you have a 700 credit score, something as simple as reducing your credit utilization could quickly put you over the top, into excellent territory. And that would help you save hundreds, perhaps even thousands, of dollars more each year.
If you don’t know your current score, you can check it for free on WalletHub, the only site offering free credit scores that are updated on a daily basis.
See Your Latest Credit ScoreJust remember that there’s a big difference between knowing what your credit score is and truly understanding it. So continue reading below to learn everything you need to know about your 700 credit score.
What Does A 700 Credit Score Give You?| Type of Credit | Do You Qualify? |
|---|---|
| Any Credit Card | NO |
| No-Annual-Fee Credit Card | YES |
| Big Initial Credit Card Bonus | YES |
| Credit Card with 0% Financing | YES |
| No-Foreign-Fee Credit Card | YES |
| Favorite Store’s Credit Card | YES |
| Airline/Hotel Credit Card | YES |
| Best Mortgage Rate | NO |
| Auto Loan with 0% Intro Rate | MAYBE |
| Lowest Auto Insurance Premium | NO |
| Best Personal Loan Rate | MAYBE |
| Apartment Rental | YES |
If you want to know what it takes to get a credit score of 700, look no further than the Credit Analysis section of your free WalletHub account. You’ll find grades for each component of your credit score, along with an explanation of where you stand and tips to improve. Getting your credit score to 700 is kind of like making the honor roll in school. You need mainly As and Bs to pull it off.
For example, here’s a common credit scorecard for someone with a 700 credit score:
- Payment History: A = 100% on-time payments
- Credit Utilization: B = 10% - 29% utilization
- Debt Load: A = <0.28 debt-to-income ratio
- Account Age: B = Average tradeline is less than 9 years old
- Account Diversity: A = 4+ account types or 21+ total accounts
- Hard Credit Inquiries: A = Fewer than 3 in past 24 months
- Collections Accounts & Public Records: A = 0 collections accounts and public records
You don’t need to match this scorecard exactly to build a credit score of 700 or even higher. Different profiles can get the job done. For example, you might have an A in Credit Utilization but a B, or even a C, in Account Age. It’s the complete picture that matters.
Who Has A 700 Credit Score?| Credit Score | Tier | Percentage of Americans |
|---|---|---|
| 720 – 850 | Excellent | 38.12% |
| 660 – 719 | Good | 17.33% |
| 620 – 659 | Fair/Limited | 13.47% |
| 300 – 619 | Bad | 31.08% |
*Based on WalletHub data as of Oct. 7, 2016
As you can see, the majority of us are in the top two tiers of the credit-score range. A lot of people don’t know where they stand, though, considering that 44% of consumers haven’t checked their credit score in the past 12 months, according to the National Foundation for Credit Counseling. If you’re one of them, you can change that by checking your credit score on WalletHub.
700+ Credit Scores By IncomePeople who make at least $50,000 per year are significantly more likely to have a credit score of at least 700. And people who pull in $75,000 to $99,999 per year are in the sweet spot for a score that begins with a 7 or an 8. But note that it is possible to get into the 700-plus club if you earn less or wind up with a way lower score even if you make a lot more. It’s all about spending within your means.
700+ Credit Scores By AgeYour credit scores takes into account the average age of your credit cards and loans, so it makes sense that high credit scores skew older. But the fact that nearly one-quarter of people aged 18 to 24 have credit scores of 700+ should give newcomers plenty of hope.
Remember, no matter where you’re starting from, WalletHub will help push your credit score higher. So get on the road to top WalletFitness now!
Image: vladvvm / iStock.
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Large cap vs. mid cap vs. small cap… what’s the difference? Furthermore, why does it matter to an asset allocation plan and a well-diversified portfolio?
These are important questions for every investor to answer. So first, let’s talk about market capitalization. Then, we’ll talk about why it matters.
Market Capitalization
Market capitalization (or market cap, for short) is the value of all outstanding shares of a corporation.
For example, assume a company has 1 million shares outstanding. If each share trades at $100 per share, the company’s market cap is $100 million.
To put this in some perspective, the company with the largest market cap as of today is Apple, which has a market cap of over $800 billion (yes, that’s billion with a B). In contrast, the smallest companies on the S&P 500 have market caps of just a couple billion. And there are many, many public companies with a market cap of less than $1 billion.
Related: What Will Apple Do With All That Cash?
Now, why does it matter? Well, history tells us that, on the whole, investing in smaller companies is riskier than investing in larger companies.
That seems sensible. Smaller companies don’t have the financial resources of many larger companies to weather a financial storm. And the products or services of smaller companies are often still unproven.
As we saw with stocks versus bonds, the higher risk involved with investing in smaller companies has, historically, resulted in higher returns. From 1926 to 1998, for example, large company stocks had an annualized return of 11.22%, while small company stocks enjoyed an annualized return of 12.18%.
If you think this nearly 1% difference is not all that much, check out How Half a Percent Can Ruin Your Retirement.
Market Cap Size
All of this still leaves open an important question: How big (or small) must a company be to be considered a large cap (or small cap) stock?
Well, there is no single answer to this.
Morningstar considers the largest 5% of the stocks in its database as large cap, the next 15% as mid cap, and the remaining 80% as small cap. Morningstar uses the familiar and convenient Style Box to indicate the market cap of an individual stock or mutual fund.
Here is another commonly used division of market cap, which breaks the size of a company into six categories:
- Mega Cap: $200+ billion
- Big/Large Cap: $10 – 200 billion
- Mid Cap: $2 – $10 billion
- Small Cap: $300 million – $2 billion
- Micro Cap: $50 – $300 million
- Nano Cap: <$50 million
Small Cap Performance
Now that we understand market cap, the next question is how we should invest our money. Many investment professionals recommend that investors tilt their portfolio toward small-cap stocks.
Recently, I interviewed Paul Merriman. Paul has done great work on asset allocation, including his Ultimate Buy and Hold Portfolio. He recommends small-cap value.
Why? Small-cap value stocks historically have enjoyed higher returns than most other asset classes.
As an example, let’s compare a 100% S&P 500 index portfolio with one that moves 10% to a small-cap value index. Using Portfolio Visualizer, from 1972 to today, the portfolio with 10% small cap value outperformed an S&P 500 index portfolio by 50 basis points. Remarkably, the standard deviation of the two portfolios is almost identical.
Listen to my interview with Paul Merriman:
Of course, small caps are riskier if evaluated in isolation.
The standard deviation for Vanguard’s S&P 500 Index is 7.35%, according to Morningstar, while Vanguard’s Small Cap Index fund has a standard deviation of 12.21%.
As a refresher, standard deviation tells us that about two-thirds of an investment’s yearly returns will fall somewhere between its average return minus its standard deviation on the one hand, and its average return plus its standard deviation on the other.
Using the numbers above, two-thirds of the S&P 500’s returns will fall between 3.87% (11.22 – 7.35) and 18.57% (11.22 + 7.35). In contrast, two-thirds of the Small Cap index fund’s returns will fall somewhere between -.03% (12.18 – 12.21) and 24.39% (12.18 + 12.21). Thus, the higher the standard deviation, the more volatility you can expect in the investment.
Standard deviation is not all that meaningful when applied to a specific asset class. Rather, we should consider standard deviation, if at all, on our portfolios as a whole. And here, adding a reasonable amount of small cap value does not significantly increase the volatility of a portfolio.
Learn More: Should You Invest While You’re In Debt?
My Small Cap Investments
So, what does this mean for asset allocation?
My approach has been to invest about 10% of my portfolio in a small cap value index fund. The idea here is to benefit from what I hope will be higher returns from small caps, while not going overboard and greatly increasing the risk of my overall portfolio.
At one point, I split my small caps into three funds:
Bridgeway Ultra-Small Company Market (BRSIX): This fund invests in ultra small cap stocks, and its current holdings have an average market cap of $362 million.
Allianz NFJ Small Cap Value Instl (PSVIX): This fund invests in small cap stocks, and its current holdings have an average market cap of $2.11 billion. This fund is really on the borderline between small cap and mid cap.
Vanguard Explorer Fund (VINEX): This fund invests in international small cap and mid cap stocks, and its average market cap is currently $1.863 billion.
Today, I’ve greatly simplified my portfolio. My exposure to small-cap stocks comes from Vanguard’s small cap value fund (VSIAX).
The point here is not to recommend these funds or my asset allocation. Rather, the point is to show the choices I’ve made, which may or may not be appropriate for you.
You should note from the above information, however, that not all small caps are created equal. There is variance in the size of the companies these small cap funds actually own. The Allianz fund market cap is several times larger than the average market cap for the Bridgeway fund.
The point is that you need to look at the average market cap of the fund. Don’t rely on the name of the fund, as the name can be deceiving.
The risk, as measured by their standard deviation, also can vary significantly from fund to fund. The standard deviation for the Bridgeway fund is 13.52%, while the other two funds have standard deviations of about 10.50%. This is to be expected given that Bridgeway invests in significantly smaller companies.
How Does My Allocation Stack Up Against the Pros?
You’ll see a lot of recommended asset allocations in books and published articles. Generally, for those with at least 10 or 20 years to go before retirement, the suggested allocations that I’ve seen range anywhere from about 10 to 25%.
For example, Bernstein in The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk suggests 15% for a long-term portfolio. The Bogleheads in The Bogleheads’ Guide to Investing recommend 25% allocated to mid cap and small cap for a young investor, and about 15% for us middle-aged folks.
One critical thing to keep in mind is that if you own a small-cap fund, be prepared to lose some money in the short term. As we’ve seen from the standard deviation, these funds are more volatile than large-cap and bond funds. So, know ahead of time if you can’t stand the heat.
Track Your Asset Allocation for Free
My favorite investment tracking tool: The tool I use every day is Personal Capital’s free financial dashboard. The financial dashboard enables you to link all of your investment accounts, including 401(k) accounts. This, in turn, allows you to see all of your investments in one place, track their performance, evaluate your asset allocation, and analyze the fees associated with your portfolio.
In the next article in this series, we’ll look at the difference between a value and growth stock.
Go to Asset Allocation
Go to Value vs Growth Funds
The post Large Cap vs. Small Cap Mutual Funds – How to Increase Your Returns appeared first on The Dough Roller.
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Online banks have proliferated the marketplace. They boast more impressive rates overall than the bricks-and-mortar institutions, but even their yields have been far from show-stopping.
This is all by way of saying, it’s no wonder there are so many options other than the savings account these days. You owe it to yourself — and your emergency fund — to know what they are, where to find them, and how to take advantage of them.
To help, we’ve put together a list of what we believe to be the top five alternatives to savings accounts.
1. CD Laddering
This is a fascinating, and somewhat complicated, formula. It stages your CD investments to maximize rates and compounded returns.
A CD ladder allows you to invest in different length CDs, never having all of your money locked up for a long period of time. The below table shows how you would invest $20,000 in five different CDs and their respected APYs.
| Amount | CD Term | APY |
|---|---|---|
| $4,000 | 1 year | 1.55% |
| $4,000 | 2 years | 2.01% |
| $4,000 | 3 years | 2.39% |
| $4,000 | 4 years | 2.64% |
| $4,000 | 5 years | 3.09% |
Each year when one of your CDs matures, you simply reinvest it into a 5-year CD. This way, you will have one CD maturing every year.
Should you have an emergency where cash is required, you won’t face a penalty for pulling money out early. The small sacrifice you are making here is in the initial five year period. During that time, you are not earning as high of an interest rate as you would have, if you’d simply invested all $20,000 into a 5-year CD from the start.
[See: Check out this simple alternative to CD Laddering]
2. Person-to-Person Lending
Also known as peer-to-peer lending, social lending, or P2P lending, this innovative concept pairs those who want to borrow with those who want to lend, bypassing the bank as middleman.
Using the Internet, the two parties meet auction-style. The party offering the best rate wins, and there is no overhead, which offers obvious benefits. Ironically, despite the lack of face-to-face contact between parties, there is the ability to have a more personalized relationship than the big banks can offer.
Another iteration of person-to-person lending is community lending, in which multi-person groups work together on borrowing/lending transactions.
The two most well-known P2P lending companies around are Lending Club and Prosper. If you invest your money wisely, you can see a return five times greater than any online savings account can provide.
The interest rates on the loans you offer are split into different classes. The higher the interest rate, the greater risk you are taking that the borrower will default.
There was $118 million taken out in person-to-person loans in 2005. In 2007, this jumped to $647 million. This year, the projected total is set to be around $7.7 billion.
With many banks tightening up their lending policies because of the economy, consumers are turning to other consumers for loans. This should keep interest rates high, which is great if you’re looking to be a lender and get a higher return on your money.
See: Did you know you can consolidate debt with LendingClub or Prosper?
3. Bond Mutual Funds
Investing in bonds and other debt securities is an age-old, conservative way to receive steady income on an investment.
Unlike other mutual funds, where your money is moved around in search of a better “deal,” your principal stays put in a bond mutual fund. You’ll receive monthly dividends that include interest payments on the fund’s underlying securities, plus any capital appreciation in the prices of the portfolio’s bonds.
Bond funds are usually selected for diversification purposes and income generating ability. This is because they tend to pay higher dividends than money markets and many savings accounts.
They are safe, but not entirely without risk. These risks are mitigated by the fact that a bond fund is spread out across many bonds. This protects it from the misfortune of a few languishing performers.
Certain bond funds may also be exempt from federal and/or state taxes, adding to the appeal as a money-maker.
There are three major kinds of bond funds:
- U.S. Government Bond Funds – These are the safest option, as securities are fully backed by their issuer, the U.S. government. The only real risk with these funds is the up and down flow of interest rates and inflation.
- Municipal Bond Funds – These are investments in debt securities paying for local public projects, like bridges, highways, and schools. People with high incomes gravitate to municipal bond funds because they are exempt from federal taxes (and possibly state taxes, too). Because they are backed by the government, they have a high credit rating. However, they carry a little more risk than U.S. government bond funds, because municipalities can (and some do) declare bankruptcy.
- Corporate Bond Funds – These are made up of bonds issued by private companies and are, therefore, not backed by any government entity. As such, they are riskier, but they can be much more financially rewarding than other bond types. A subset of corporate bond funds is the investment-grade corporate bond fund, which invests in only very stable, creditworthy companies.
Other, more obscure bond funds include:
- Zero-Coupon Bond Funds
- International Bond funds
- Convertible Securities Funds
- Multi-Sector Bond Funds.
4. Paying Down High-Interest Debt
One of the most intuitive, yet overlooked, ways to save money is to eliminate your debt.
There is an ongoing discussion about which debt to pay off first: the one with the highest interest or the lowest balance. After much analysis, the answer is: pick a debt, any debt. Action of any sort is a win.
Discuss: How a Debt Snowball Can Help You Eliminate Your Debt
Another way to pay down your debt is to consolidate higher debt credit cards with lower rate credit cards. Finding a credit card with a 0% balance transfer was a lot easier a few years ago. If you look hard enough, though, they’re still out there.
If you don’t have the credit score to acquire a quality balance transfer credit card, try to pay your balance off as fast as you can. Paying the minimum payment each month is the sucker’s play, so even adding an additional $10-$15 will go a long way in the end. Keep that mountain of debt from piling up any higher by living below your means for as long as it takes.
You’ll find some who suggest cashing out savings or investments in order to pay down your debt, but that’s a very personal decision dependent on your situation. If you’re paying on a 6% loan and are only receiving 1% of interest from your online savings account, you can see why so many suggest making this move.
5. High-Yield Money Market Accounts
If you want to one-up the yield on your savings account, open a money-market account (or MMA).
MMAs are like mutual funds, in that they own a lot of different securities. More and more people are doing it because the yields are too hard to pass up. In fact, they typically pay around 1% more than the national savings account average.
Make sure to look at the annual percentage yield, or APY, to determine the exact rate of return. This is always a variable rate, which means it can change at any time… for better or for worse. You’ll also likely be held to a minimum balance and will encounter more fees for withdrawals or transactions with a high-yield account.
The best of the bunch are found at online banks, so you’ll also have to get comfortable with opening and managing your high-yield account online. With so little overhead, online banks can pass the savings on to you.
Ally Bank and Discover Bank currently offer APYs similar to that of their savings accounts. In time, however, you can expect their MMA rates to be higher than their savings account rates.
Resource: How to Save More Money With Less Effort
At the end of the day, the most important part of building your savings is actually finding a way to save the maximum you can afford each month. Once you get into a good groove with saving, your next concern should be making your money earn as much as it can.
With interest rates where they are today, this means that you’ll want to look somewhere other than your savings account. These five alternatives are a great place to start, if you want higher returns while still maintaining access to your cash.
Topics: BankingThe post 5 Unique Alternatives to Savings Accounts to Save Money Now appeared first on The Dough Roller.
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As I talked about in How I Made $979,321 in 2016, my top goal for 2017 is to have a better work life balance. I am by no means complaining about anything at the moment, but I know that I could do better.
Plus, it's can be very difficult to disconnect because as a blogger, you can work from your phone, laptop, on vacation, and more.
If you’re like me, it is even more difficult to unplug when you love what you're doing.
But, that doesn't mean it's healthy.
Finding a good work life balance means taking breaks from work to enjoy life, and it’s important that you aren’t glued to a screen 24/7.
You need to enjoy what's going on around you, be present in the moment, and have a life outside of work.
Even if you are enjoying your work, a break is good. A bad work life balance can make you irritable, stressed, impact your relationships, and affect your health.
I know that I'm not alone in needing a better work life balance because, according to Monster.com:
- Around 50% of workers feel overwhelmed by work.
- 88% of workers have a difficult time managing a work life balance.
- One-third of Americans work 10 hours a day or longer.
- One in five spend another 10 hours per week working from home.
Running a business and being able to travel probably sounds great to the average person, and trust me, it is.
But, like I mentioned earlier, managing a good work life balance is important as it can be easy to let your business or job take over your life.
Related: How I Run A Business While Traveling 365 Days a Year
Here is how I plan on managing a better work life balance.
Work ahead.
As some of my long-time readers may know, one of my main focuses has always been working ahead. For Making Sense of Cents, I am usually around 2-3 months ahead in content, which makes full-time traveling much more enjoyable.
Planning and working ahead are what keeps me sane and helps me manage a good work life balance.
So, if I come across an area with no internet, if I really love where I’m visiting, or if I am unable to work for some other reason, then I can still have fun and not feel as stressed out.
Working ahead on blog content means that I am not frantically trying to get writing work done. It allows me to enjoy our time exploring new areas because I am not working on a strict deadline.
This also makes writing much more enjoyable because I only write an article when I am really in love with the topic. I used to feel rushed with my writing when I had something scheduled for the following day.
It can take a little effort to start working ahead, but it’s important if you are looking for a better work life balance.
Related: How To Quit Your Job And Become A Full-Time Blogger
Take time off.
Even though I've been running this blogging business full-time for almost four years (I started this blog six years ago, but I began while working another job full-time), I don't think I've ever taken a full day off from my blog.
I'm always answering emails, thinking of new ideas, handling social media, writing, and more. While I love everything about blogging, a day off is always a good idea!
So, to work towards a better work life balance, I'm going to start by taking a full day off at least a few times a month. It may not sound like much, but I have to start somewhere, haha!
I've tried taking a day off in the past, but it was very difficult because the emails were piling up. On average, I receive well over a few hundred emails per day from people who want answers to something. You can throw in a few hundred spam emails too.
Be okay with emails building up.
Like I just said, taking time off means the emails will pile up. Don’t get me wrong, I love answering emails from my readers, and it's something that I'll do for at least the foreseeable future.
But, I also love seeing my inbox in the single digits.
I’m good about answering emails quite quickly, as some of you know. However, that can be bad when trying to manage a good work life balance.
It also means that my eyes are almost always glued to my inbox. And, that constant multitasking means I may be losing focus on a more important task.
To fix this problem, I am going to start by only checking emails three times a day, instead of what feels like 1,000 times per day. Eventually, I would like to check my inbox just once a day. Whatever the email is, I'm sure it could wait 24 hours in order to be answered.
Be more efficient with my time.
I’ll be honest with you, I'm not the most efficient with my time. Although I hardly ever watch TV, I am constantly switching back and forth between work and social media. As a blogger, being on social media is critical, but I'm mainly just wasting time.
By switching back and forth, I am losing focus, which means it takes me longer to complete a task because I keep stopping and starting over and over again.
Social media can be a huge time waste for more than just bloggers, and the average person spends many, many hours on social media each week.
Between Pinterest, Facebook, Twitter, Instagram, Snapchat, and many others, it can be quite easy to waste your entire day.
If you find that you are spending too much time on social media and that it is negatively impacting you, you may want to shut down the social media accounts that you are spending too much time on. You can even create a time block so you cannot access your accounts during certain periods of the day, and so on.
By spending less time on social media, you won’t have as many time wasting distractions that make it difficult to stay focused.
Just think about what you could do with a few extra hours a day if you stopped spending as much time on social media!
To work towards a better work life balance, I am going to completely close out of social media while I am completing a task. I also won't be glued to my phone before bed or right after I wake up.
Related: How To Find Time To Make More Money
Have a clear schedule and to-do list.
This is one area that I actually do quite well in. However, it's always great to bring it up because I really believe that it will help others manage a good work life balance.
I don't know where I would be without my schedule and to-do list. I have a fairly bad memory and forget things almost immediately. Without my to-do list, I would be completely lost and would spend way too much time trying to remember what I'm supposed to do.
My to-do list and schedule keep me on track and motivated. I really love crossing items off my to-do list because I am a huge nerd.
If I know I won’t remember an upcoming task or event, I will create a reminder and add it to my to-do list. This makes managing my life easier because I don’t have to worry about forgetting things, missing payments, etc.
I create reminders for all sorts of things, such as:
- Business tasks and to-do lists.
- Appointments.
- When it’s time to pay estimated quarterly tax payments.
- Renewing license plate tags for our cars.
- Paying semiannual bills, like car insurance.
This ensures that I am always on top of exactly what I need to do, and nothing is ever forgotten. I don't even spend time wondering if I forgot something, which gives me more time to stay focused on what truly matters.
Stop multitasking everything.
As you’ve noticed, there's a common theme in today's article – stop multitasking.
Some people are good at multitasking, whereas most are not. There is proof out there that multitasking can actually result in wasted time. This is because it takes time to re situate yourself every time you stop and start a task.
I recently read something that said whenever you start and stop a task, you are wasting at least 25 minutes.
That wasted time can really add up.
Instead of multitasking, choose a task and stick to it for a certain amount of time. Don't try to work while talking on the phone, watching TV, doing dishes, and also Facebook stalking someone in the background.
Some people can multitask successfully, but with the large amount of time it takes to refocus on a new task, many people cannot.
Think about your strengths and weaknesses to understand whether or not multitasking actually helps you save time. For the most part, focusing on a single task will allow you to simplify your life and focus better.
Focusing on one thing at a time is exactly what I will be working towards. If I have multiple tasks that can be done at the same time, I just need to take my time and do them one at a time.
Unplug more.
The hardest thing for me about traveling full-time is unplugging from my work.
Being location independent means that you are able to bring your work wherever you go. It also means that it can be hard to separate your work from the rest of your life. This does not make for a good work life balance.
Technology makes it easy to work 24/7, and it makes it very easy to work while traveling. But having time away from your phone, laptop, etc. will allow you time to yourself and to enjoy life a little more.
Whether you work at an office or work for yourself at home, having a set schedule is very important. If you work from home, it can be especially hard to leave work. I often find myself working all morning and all night long.
Setting a schedule that allows you to step away from work is important. And, it might mean that you have to turn off your phone and leave it at home or in a completely different room.
It’s important to find a way to unplug that works for you. Lately, I've been going on very long hikes so that I can unplug without any chance of having an internet connection.
An eight hour hike does the mind and body well!
Outsource more.
I outsource some tasks, but I could definitely be outsourcing more.
When I tell people that I run Making Sense of Cents 95% on my own, they are shocked. After all, I regularly earn over $100,000 a month and made $979,000 in 2016 alone.
You'd think that there would be a team of people running this business.
But, nope, it's just me, my editor, and my tech person – and those last two people are part-time.
In order to have a better work life balance, I need to work on outsourcing tasks. I need to find a way to value each task to see if my time is better spent elsewhere.
If you find yourself low on time, then you might want to consider hiring someone to help you out. There are virtual assistants, personal assistants, and everything else out there. You can designate certain tasks that don't exactly need YOU in order to function.
Plus, you may find that outsourcing certain tasks will give you more time and energy to reach your other goals.
This might mean doing something like hiring someone to mow your lawn, clean your house, or do car repairs. This will give you more time to start your business on the side or whatever your goal might be.
In order to outsource effectively and to make sure that it’s worthwhile, you will want to think about a few things, such as:
- Could you earn more in that time by outsourcing, or would you be better off doing the work yourself?
- Do you feel comfortable doing the task, or would you be better off leaving it to an expert?
- Would outsourcing the task help you focus on your goal?
Start saying “no.”
I have a problem with saying “yes” to everyone. I have gotten better, but it still doesn’t come easy.
If you always say “yes” to everything and find yourself with little time for your own tasks, then you might want to learn how to say “no.” Having fewer items on your to-do list will obviously free up some time.
You're probably thinking “But I HAVE to do that.”
Actually, you probably don't. You should start by determining the value of the task in terms of how it will affect your work life balance. Could you possibly find someone else to do the task instead? Is the task worth your time?
If you say “yes” to everything but are ready to pull your hair out, then you may want to start saying “no.”
Limiting your accountability can help you stay focused on one thing at a time. It will also simplify your life by allowing you to focus on what’s really important to you.
What do you do in order to manage a better work life balance? Do you have any apps that help you manage it?
The post My Search For A Better Work Life Balance appeared first on Making Sense Of Cents.
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