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Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.

Is A Master’s Degree Worth The Money?

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is a master's degree worth the money

It’s no secret that getting an education can come with a massive price tag. However, figuring out whether getting a Master’s degree is a wise investment or a waste of money is often surprisingly tricky. There are multiple factors you’ll need to consider. Otherwise, you may pursue a path that doesn’t lead to the financial boost or lifestyle you’re hoping to snag. If you’re wondering if a Master’s degree is worth the money, here’s what you need to know.

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The Cost of a Master’s Degree

On average, a Master’s degree costs around $66,340. However, what an individual pays can vary dramatically. Some of the lowest cost options may run only $30,000, while the higher end may hit $120,000.

There are several reasons why the price can vary so dramatically. First, every university can set its own rates, so the college you choose plays a role. Generally, private schools cost more than public universities, with average prices sitting at $81,100 and $54,500, respectively. However, some colleges in both groups may break that mold.

Additionally, some majors come with higher price tags. On average, a Master’s in the Arts is more expensive than a Master’s in Science. However, individual majors can have unique price points.

Whether you’re an in-state or out-of-state student leads to cost variances. Typically, in-state students pay less than their out-of-state counterparts, causing the same educational experience to come with two different price tags.

Finally, program lengths differ depending on the course requirements, leading to further potential cost differences. Generally, a 30-credit-hour program costs less than a 60-hour program, mainly because college tuition prices are based on the number of credit hours taken.

Since there’s so much variation in cost, you’ll need to determine how much you’d need to pay for your preferred degree at the college you want to attend. Without that figure, it’s hard to decide on whether getting a Master’s degree is worthwhile in your situation.

Earning Potential Increase

Overall, Master’s degree holders earn approximately 20 percent more than Bachelor’s degree holders on average. That’s a notable jump, giving Master’s degree holders a median income of nearly $78,000 per year.

However, just as prices vary, so does earning potential. Some majors come with a far larger pay differential for those who choose to get an advanced degree.

For example, the differential between a Bachelor’s and Master’s in biology is a startling 86.5 percent. In that case, getting an advanced degree is worthwhile in nearly all cases. For those studying business administration, the Master’s comes with a differential of 51.4 percent, which is incredibly solid. The differential for information technology administration is similar, sitting at 46.9 percent.

But not all Master’s degrees perform as strongly. For instance, the differential between a Bachelor’s and Master’s in finance is just 15 percent. If you major in accounting, the differential is a mere 4 percent.

When determining if a Master’s degree is worth it, it’s wise to explore how much your earning potential increases if you have the extra education. By doing so, you can determine how it influences your long-term earning potential, making it easier to see if the financial value is ultimately there.

Unemployment Rate Differences

If you’re looking for job security above all else and wonder if having a Master’s degree makes a difference, it actually can have an impact.

Overall, the unemployment rate among Master’s degree holders in 2021 – a period where the pandemic was still influencing the market significantly – the unemployment rate was 2.6 percent. For Bachelor’s degree holders during that time, the rate was 3.5 percent. That’s a 0.9 percentage point difference.

Whether that’s enough to sway your decision may depend on your priorities or employment factors in your area. However, it’s worth factoring into the broader equation.

Long-Term Career Outlooks

Another financial factor to consider is the long-term career outlook associated with the roles relating to the Master’s degree. For instance, if a field is growing and there aren’t enough professionals to meet demand, then pay rates are likely to rise since companies are competing for talent. This can make a degree that seems costly today a wise move overall, as the associated earning potential will improve over time.

However, if a job is connected to a position or field in decline, the long-term earning potential may diminish. When the amount of available talent outpaces demand, employers don’t have to compete for strong candidates. As a result, they usually won’t need to increase wages to find a solid new hire. That harms the financial side of the equation from the beginning.

But if wages remain stagnant over the long-term but the availability of candidates remains high, the outlook gets worse. Inflation will ultimately diminish your purchasing power, and the company won’t necessarily have a reason to correct that.

That’s why it’s wise to examine the long-term career outlooks relating to the Master’s degree. That allows you to determine if the extra education may get more or less valuable over time, ensuring you can examine the big picture prior to making a decision.

Degree-Related Job Requirements

Finally, when determining if a Master’s degree is worth it, you need to consider any degree-related job requirements. In some fields or roles, having an advanced degree isn’t a way to stand out; it’s an outright necessity.

For example, you typically can’t get licensed as a mental health counselor or psychologist without a Master’s degree. Upper-level human resources roles may consider an advanced degree a must. The same goes for many healthcare roles. Some areas even require that high school teachers have a Master’s, and nearly all aspiring college professors have to earn an advanced degree to qualify for the job.

If you have your sights set on a specific role and it requires a Master’s degree, then advanced education is essentially your only path toward your dream job. In this case, the satisfaction that comes with working in the field may override many of the financial considerations, making a Master’s degree worth it for intrinsic reasons.

Is a Master’s Degree worth the money to you? Are you a Master’s degree holder that feels it wasn’t worth the time or money? Why do you feel the way you do? Share your thoughts in the comments below.

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Is It Ever a Good Idea To Move Back In With Your Parents To Pay Off Debt?

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When you’re battling debt, finding a way out isn’t always easy. In some cases, that may make you wonder if heading back to your parent’s home is a smart move. After all, it’ll likely help you reduce your expenses dramatically. However, it can also create challenges. If you’re considering it, here’s a look at whether there’s ever a good reason to move back in with your parents to pay off debt.

The Benefits of Moving Back in with Your Parents to Pay Off Debt

Generally speaking, the benefits of moving back in with our parents to pay off debt are reasonably clear. First, you’ll usually get a chance to save money. Even if you’re paying rent, covering part of the utilities, and handling your own food and insurance, you’ll likely pay less than if you lived on your own. That gives you more cash to send to your debts.

Second, you may get some much-needed emotional support. That’s particularly true if you’re cutting out all extraneous spending to make debt repayment faster. By being with your parents, you’ll get opportunities to socialize. Plus, you may get a few perks – like access to entertainment – that you otherwise couldn’t afford, making a tough situation a bit easier to navigate.

Finally, it may give your parents a bit of a financial boost, too. For example, if you’re paying rent, they’re spending less on their housing costs. That could let them conquer some debt, set more money aside for the future, or otherwise get financial ahead.

The Drawbacks of Moving Back in with Your Parents to Pay Off Debt

When it comes to drawbacks, the strain it can put on your relationship is one of the biggest. While moving back in for a short time may be fine, an extended stay may lead to frustration. Your parents may have looked forward to an empty nest, or you may feel restricted by their rules. In either case, things can get uncomfortable quickly.

There’s also a chance they’ll feel taken advantage of, particularly if there’s any spending on your part that they find questionable. For instance, you might view a night out as a way to relax, while they think that money should go to your debt so that you can move out faster.

If you’re not paying rent or covering your expenses, moving in means you’re also placing a financial hardship on your parents potentially. Unless their income level is high, covering your costs could represent a significant strain on their budget. If so, that may lead to resentment, as well as long-term financial trouble for them.

Is It Ever a Good Idea to Move Back in with Your Parents to Pay Off Debt?

Generally speaking, there are good reasons to move back in with parents to pay off debts. However, you need to weigh the drawbacks, too. That way, you can ultimately make the best long-term choice.

Do you think there’s ever a good reason to move back in with your parents to pay off debt? Why or why not? Did you decide to move back in with your parents to conquer a debt issue? Do you feel that was the right choice in hindsight? Share your thoughts in the comments below.

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How Much Should You Be Paying for Rent?

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how much should you be paying for rent

Many people have questions about their budget, particularly when it comes to how much they should spend in specific categories. Most people aren’t certain about whether they’re making wise choices. In some cases, they’re merely curious if they’re using the same approach as other households. In either case, you may find yourself asking, “How much should you be paying for rent?” If that’s the case, here’s what you need to know.

Standard Recommendations on How Much You Should Be Paying for Rent

The 30 Percent Rule

One of the classic pieces of personal finance advice when it comes to housing is the 30 percent rule. Essentially, this recommendation states that households shouldn’t dedicate more than 30 percent of their gross, or pre-tax, income to housing expenses.

For example, if you earned $3,000 per month, the 30 percent rule would mean spending no more than $900 per month on rent. If you brought home $5,000 instead, you could commit $1,500 per month on rent. If you worked full-time at federal minimum wage, leading to a monthly salary of about $, you’d theoretically be limited to $390 per month.

Whether the 30 percent rule works for you largely depends on your income and rental rates in your area. If you have a moderate to high income and live in a low-cost community, you’re likely in excellent shape by using this approach. However, if you’re lower-income, live in a high-cost area, or both, you may have little choice but to spend more.

The 50/30/20 Rule

Another option for determining how much you should spend on rent is the 50/30/20 rule. With this strategy, you limit your “needs” spending to 50 percent of your monthly income. Thirty percent can go to “wants,” while 20 percent is dedicated to savings or debt payments beyond the minimums.

Generally, “needs” include housing, utilities, groceries, transportation, insurance, and minimum debt payments. As a result, you may be able to send more than 30 percent of your income toward housing if you don’t need those funds for other expenses in the category.

However, like the 30 percent rule, the 50/30/20 rule won’t necessarily work across the board. For example, if you’re in a lower-income household, you might have to dive into the “wants” or “savings” money to cover all of your needs, even if you’re reasonably frugal.

Figuring Out How Much You Should Spend on Rent

If you’re a moderate-income household, you may find that either the 30 percent rule or the 50/30/20 rule works well for you. However, if you’re in a lower-income or high-income household, those approaches might not make sense. For the former, you may find those strategies don’t let you allocate enough to housing. For the latter, you might feel that the recommending spending amount is far more than feels reasonable.

In any case, it’s best to treat the 30 percent rule and 50/30/20 rule as general guidelines and nothing more. That way, you won’t make choices based on those recommendations alone.

Instead, you need to look at all of the factors in your broader situation. Start by looking up average rent prices in your area, giving you an idea about the cost of living and what you can reasonably find. Then, go over your budget to learn more about your other expenses and review your bank statements to dig into your spending habits.

As you take a deep dive into your financial life, you can start to figure out where your money is going. Then, you can identify areas where you may need to make changes. For example, if you’re overspending on food or entertainment, you can make the decision to scale back. That way, you can create a functional budget that aligns with your needs and priorities.

As you do, you’ll start to get a solid idea of what you can afford. Compare that to rent averages in your area to see if what you can pay aligns with what’s normal in your immediate vicinity. If it is, you can move forward with additional confidence. If it isn’t, you’ll need to find ways to make housing more affordable.

For example, you may want to ask for a raise at work or get a second job. Alternatively, you could reduce other expenses if possible or consider getting a roommate to split housing costs.

If you’re low-income, look into assistance programs in your state, too. In some cases, you may find that you’re eligible for options that can reduce your expenses or help cover the cost of rent, giving you more room in your budget.

Do you think the numbers above are a solid reflection of how much people should spend on rent? Do you have any tips or insights that can help a household pick a number that’s comfortable? Share your thoughts in the comments below.

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How Much Should You Spend on Grocery Each Month?

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For many households, groceries are a big line item in their budgets. Overall, the average amount households spend on food at home came in at $4,942 in 2020, which is a substantial sum. That breaks down to about $411 per month or around $95 per week. However, that doesn’t mean it’s the amount a household should spend on groceries every month. In some cases, less may make sense. In others, it could take more. If you’re wondering how much you should spend on groceries each month, here’s what you need to know.

How Much Should You Spend on Groceries?

It’s critical to understand that there isn’t one figure that’ll work for everyone. Instead, you need to look at the situation in the context of your household. That way, you can find a reasonable approach that lets you handle your needs without breaking the bank.

Averages Aren’t Perfect for Everyone

Above all else, you need to know that average spending levels aren’t right for everyone. For some households, spending $411 a month is completely reasonable. However, dedicating that much to food could break the budget of lower-income households, while it may be far less than a large family might need to spend to maintain proper nutrition.

Using percentage-based averages isn’t necessarily better. For example, in 2020, consumers spent an average of 8.6 percent of their disposable income on food purchases. With that, you may assume that spending 8.6 percent of your budget on groceries could be a reasonable figure from an affordability perspective.

However, every household is different. For example, if you’re working full-time and earning minimum wage, that leads to an annual income of just $15,080, or around $1,256 before taxes and other withholdings. In that case, $411 per month is clearly unreasonable. However, 8.6 percent is only $108 a month, or around $25 per week, which might be far less than you need to spend.

Since that’s the case, it’s important to realize that averages alone aren’t a good indicator of what you should spend. Instead, you may want to try another approach.

Using USDA Food Plans as Guidelines

The US Department of Agriculture (USDA) created eating plans designed to meet health standards while respecting that households have different budgets. That can make them solid reference points when you’re trying to decide how much to spend. Plus, it can help you figure out what to buy to maintain good nutrition.

The four categories available through the USDA food plans are thrifty, low-cost, moderate-cost, and liberal. When it comes to the costs of the thrifty plan and the other three plans, they’re broken down by age and sex, allowing families to estimate how much they’ll need to spend to support each household member’s nutritional needs.

By reviewing those figures, you can see how much it typically costs to create nutritious meals at home. Essentially, they can serve as baselines, allowing you to see how much you might need to spend based on household size.

The main problem is that the plans don’t factor in cost differences between locations, dietary restrictions, or similar issues that may harm the accuracy of the estimates. Since that’s the case, it’s best to consider them guidelines and not hard-and-fast rules.

However, if what the USDA lists is genuinely unaffordable, then it’s okay to make a budget that involves less spending. The trick is to ensure you can dedicate enough to address your nutritional needs reasonably well. Then, you can use other techniques to keep your costs down.

How to Stay on Budget

Apply for Benefits If You’re Eligible

First, if you qualify for any food-related assistance, such as SNAP or WIC, make sure you apply for those benefits. That’ll give you more money to direct toward your food budget, helping you spend less out-of-pocket.

Typically, the application process is reasonably simple. Additionally, using the benefits is straightforward. Just make sure you read the rules regarding qualifying products. That way, you can incorporate the right items into your food plan and grocery list.

Set a Spending Limit

Once you know how much you can get through food-related assistance, it’s time to set a target. Use the USDA guidelines and examine your other financial obligations. You need to determine how much is reasonable for you to potentially spend, effectively setting an upper limit that serves as a maximum. That way, you know that you need to aim below that number every month.

Use Sales, Coupons, and Rebate Apps

Once you set a budget for your groceries, you’ll want to use a range of strategies to remain on target. Use a combination of sale flyers, rebate apps, and coupons (either physical or through websites and shopping apps) to find exceptional deals. If you can couple a sale with a rebate or coupon, your total cost may go down dramatically.

Just make sure you calculate the per-unit cost to determine if it’s actually a deal, as not all discounts are created equal. Further, don’t let a coupon tempt you into getting anything you don’t actually need. It’s only a deal if it reduces what you’ll spend overall.

Once you dig into the sales and other discounts, use that information to create an official shopping list. Outline all of your meals based on the available discounts, recording the ingredients you’ll need to make those specific dishes. Then, when you shop, buy only those items.

If you have trouble with impulse shopping, you may want to try online grocery pickup instead of heading to stores. With that, you can focus on precisely what you need, potentially making it easier to resist impulse purchases.

For stores with loyalty programs, make sure you sign up. In many cases, you can earn points that can reduce your grocery bill directly by saving you a specific amount on your next purchase. In some cases, you can cash out points for free items, lowering your bills further.

Like sales, coupons, and rebates, you don’t want to buy anything you don’t need purely for the points. Instead, it should simply be part of a broader saving strategy.

Create a Meal Routine

Finally, it can be wise to create a routine when it comes to eating plans. If you rotate through the same breakfast, lunch, and dinner meals, you’ll have an easier time predicting your monthly grocery costs. While it may seem like this doesn’t work with a coupon, rebate, and sale strategy, it actually can if you’re brand flexible. You just choose the lowest cost version of the product you need.

Make Adjustments as You Learn

If you’re new to budgeting, it’s crucial to recognize that adjustments are often necessary. If you initially set a grocery spending target and determine it doesn’t reasonably meet your needs, change might be required.

Review your grocery spending patterns to determine if the budget isn’t working or if buying non-necessities is actually the issue. If it’s the former, look at your overall financial plan and see if you can adjust your budget to give you the room you need.

Initially, you might need to review your budget every month to make sure it’s working. That way, you can make changes until you find the proper target, allowing you to develop a spending plan that will work long-term.

How do you decide what to spend on groceries each month? Do you have a system that helps you stay on budget, or do you plan on the fly? Share your thoughts in the comments below.

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When It’s Better to Follow Your Dreams Than To Follow Your Salary

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follow your dreams not yur salary

When most people start a career, they hope they can earn a solid income while pursuing their passions. However, there are situations where a dream job simply doesn’t measure up financially to an alternative. In that case, professionals often have to decide whether they want to follow their dreams or a high salary. While there are pros and cons to both approaches, there are situations where doing the former is best. Here are some points to consider.

Money Can’t Buy Happiness

One of the biggest reasons to pursue a dream over a particular salary is that money isn’t a guaranteed path to happiness. For many professionals, their work is a major part of their identity. If you’re in that group, choosing a path simply for the paycheck isn’t going to lead to fulfillment on an intrinsic level.

There can be arguments against pursuing a dream job is it can’t sustain a reasonable lifestyle. For example, if following your passions leads to housing or food insecurity, an inability to access critical medical care, or similar issues, it’s wise to pause and consider those drawbacks. That’s particularly true if the period of time where that situation exists is long-term.

However, if the role you’re passionate about can meet your financial needs on a basic level, that may be sufficient for you. Many people can thrive even if they’ll never end up with an elevated lifestyle. Simply being able to keep a roof over their head, food on the table, and other core needs covered is effectively enough in their eyes. Ultimately, that’s a personal choice.

Raises Aren’t Guaranteed to Increase Fulfillment

Along a similar line, raises aren’t necessarily going to increase your level of fulfillment. It’s normal for a pay increase to give anyone a quick boost, particularly if they had any sort of financial struggle previously. However, that feeling may not last long if there is nothing else about the position they enjoy.

At times, professionals progress through high-paying career paths and never feel satisfied with their job simply because the work doesn’t align with their passions. When that happens, pay increases won’t necessarily prevent issues like burnout.

If you pursue your dream job instead, your odds of feeling fulfilled from the work you do are often higher. That can make you happier on the job and overall, which is a point that shouldn’t be ignored.

Long Journeys May Be Part of Both Equations

Even if you decide to follow the money, there’s no guarantee you’ll reach a high salary quickly. Additionally, roles where the pay rates are higher right from the beginning often require a significant financial investment, such as in education and training.

While that may be a non-issue if you can cover the cost of schooling without debt, that isn’t a reality for most. As a result, you still have a long road before you feel the benefits of the higher salary. If your duties aren’t fulfilling, trudging down that path may be particularly difficult.

With a dream job, the road may also be long. Additionally, it may require education and training and, therefore, debt. However, the journey may be easier to walk, simply because the work you do makes it feel worth it.

Being Miserable Hurts Your Career

When a person burns out, staying even moderately productive gets challenging. Resentment and frustration typically cause a person’s performance to drop. When that happens, any future opportunities to advance may effectively evaporate. As a result, they ultimately don’t reach the level of success they were hoping they’d hit.

By pursuing your dream job, your odds of staying focused and dedicated to the work increase. In turn, the quality of your work may remain higher. While you may not hit the same salary point that you could have in the other field, you could potentially still rise up the ranks, securing a solid salary that’ll leave you reasonably comfortable.

Not Everyone’s Motivated by Money

If you follow your salary, money needs to be a prime motivator for you. If that’s the case, you may be able to overlook some of the drawbacks of working in a field that doesn’t align with your other passions. The salary increases can simply serve as a driving force.

The issue is that most people aren’t motivated by money alone. While everyone may want to achieve a salary that lets them live comfortably and happily, they also want to find work that’s meaningful to them on another level. This could include jobs that support their communities or let them make a difference in a specific area. For these professionals, even if the salary that comes with a particular position is stellar, they won’t find their work rewarding.

Avoiding the “What If”

Generally speaking, not pursuing a dream job that was reasonably an option can leave people with regrets. They may wonder, “What if I had the career I actually wanted?” with surprising regularity.

While it’s true that people who pursue their passions – and those roles come with smaller salaries – may also think about what earning more money would be like, if their job is otherwise fulfilling, those moments may pass more quickly. However, if they’re earning high salaries but are miserable, thoughts back to the road not taken may be harder to shake.

Ultimately, whether you follow your dreams or a salary is a personal choice. For some, financial security will outweigh every other potential factor. If you’re in that group, that’s fine. Just make sure that you have other opportunities for fulfillment, such as a rewarding hobby or volunteer positions.

If pursuing your dreams means having a meaningful life, and you’re comfortable with the lower-earning potential, letting your passions guide you may be a better option. For this road, you want to develop a comprehensive financial plan. Along with a solid budget, outline any savings goals right away. That way, you can begin pursuing them immediately, too, increasing the odds you can live comfortably.

Are there other situations where you feel it’s best to follow your dreams instead of your salary? Are there times when going for the salary is the better option? Did you choose one path and want to tell others about your experience? Share your thoughts in the comments below.

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Try These 5 Apps If You Need Help With Your Budget

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Keeping your finances on track isn’t always easy. Even if you have the best of intentions and proceed strategically, coming up with a functional budget often involves some trial and error. However, you can simplify and speed up the process by turning to technology. Many amazing apps can make budgeting a breeze, allowing you to account for your bills, spending habits, and more, often with just a few taps on a screen. If you need help, here are five budget apps that can help.

1. Mint

When it comes to budgeting apps, Mint has long been a leader. It’s incredibly user-friendly, making it a solid choice for the tech-savvy and those who aren’t as comfortable with technology. Plus, it can sync with a variety of accounts. You can easily monitor your current bank account, credit card, loan, investment, and bill details, all from a single interface.

After you sync your accounts, you have a variety of budgeting tools at your disposal. Some of your spending is automatically categorized, reducing your workload. However, you can also make adjustments as you see fit.

Within the app, you have the ability to set category spending limits. Plus, you can sign up for alerts relating to the limits, ensuring you know when you’re getting close to the line. Then, you can adjust your spending accordingly.

Mint also makes it easier to achieve your goals. You can choose a target and monitor your progress, which may keep you motivated. You can also track your credit score and net worth, giving you more tools to put you on the path toward financial wellness.

Ultimately, Mint is a free app with a ton of features. Plus, it’s largely hands-off, making it a solid choice for anyone who wants to create and follow a budget without much legwork.

2. YNAB

If you prefer something a bit more hands-on, YNAB could be a better choice. This app uses a zero-based approach, ensuring you plan for every dollar of income every month.

When you get paid, you tell the app exactly where you want your money to go. Along with covering bills and expenses, you can direct money to savings and various goals. Essentially, YNAB aims to make sure you think about your finances regularly, increasing awareness and leading to more conscious spending decisions.

With YNAB, you do get the ability to connect various accounts to the app. This can simplify income and debt tracking, allowing you to allocate your money more efficiently. Plus, there is a slew of educational resources available, ensuring you have access to tips and helpful details that can improve your money management skills.

It is important to note that the learning curve is a bit steeper with YNAB. However, the time necessary to get everything set up can be a benefit. It ensures you take a close look at your financial picture, increasing the odds that you’ll make wise decisions about your money and are fully aware of your spending habits.

3. PocketGuard

If overspending is an issue for you, PocketGuard may be your best bet. The app isn’t as feature-rich as some others, aiming more for a simplified approach to money management. However, it does go the extra mile when it comes to curbing bad spending habits.

With PocketGuard, you can connect various financial accounts to make tracking your income and expenses easier. Then, the app helps you allocate how much you need to send to expenses, debts, and financial goals. Once it finishes those calculations, it factors in your spending habits and lets you know how much you have left over to spend.

Making the most of PocketGuard does mean you need to have an active plan for achieving various financial goals, such as saving for large expenses or paying down debt. That way, you can ensure they’re factored into the broader equation when the app determines what you have available to spend.

4. Goodbudget

Another hands-on option for budgeting, Goodbudget relies on a strategy that’s similar to the classic envelope system. It’s more planning-focused instead of tracking-oriented, too.

Overall, Goodbudget is far more manual. You actively portion out your income into various categories, allowing you to choose how much you want to allocate. Additionally, you’ll enter in each of your expenses and debts, as it doesn’t connect directly to your accounts.

While some may worry that the degree of work makes Goodbudget cumbersome, there are benefits to the hands-on approach. Since you’re logging every expense manually, it encourages you to think about every spending decision you make and lets you see its impact on your finances. For some, that can lead to smart financial decisions.

Additionally, for the security-minded, Goodbudget doesn’t require any connections to your other accounts. While such links are typically low-risk, having none is technically the safest option available.

5. Zeta

For couples, Zeta is a budgeting app that makes it easier for both partners to get insights into joint financial responsibilities while maintaining separation in areas they prefer to keep private. As a result, it’s a solid choice for couples in any stage of a relationship that share some expenses or bills but don’t have fully entwined financial lives.

You can reveal or hide financial data from your partner, ensuring they see what’s relevant without giving them full access to all of your information. That allows this app to work well for couples who bank separately but want to make sure that household expenses are properly covered.

Plus, you can set up joint financial goals, allowing you to work toward mutually beneficial targets together. The app will even send you reminders to have “money dates,” ensuring you sit down together regularly to discuss your financial picture, make necessary changes, and otherwise keep the lines of communication open.

Have you tried any of the apps above and want to tell others about your experience? Have you used a different budgeting app to help you get a grip on your finances and think it could help others? Share your thoughts in the comments below.

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Should You Ever Co-Sign on A Home With One Of Your Children

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Co-signing on a home with one of your children

As a parent, it’s normal to want to do everything in your power to help your children succeed. However, when it comes to financial matters – such as co-signing on a mortgage – it’s usually best to take a step back and examine the situation carefully before moving forward. Otherwise, you may put yourself in a bind or damage the relationship. If you’re thinking you should co-sign on a home with one of your children. Here’s what you need to consider.

What You Need to Consider Before You Co-Sign on a Home with One of Your Children

Your Financial Situation

When you co-sign on a home loan. Even if the intention is that your child will handle all of the associated costs, you’re committing to repaying that mortgage. Even when your child takes care of everything as promised, a large loan shows on your credit report. It’ll impact how lenders view your debt-to-income ratio and can affect your credit score in different ways over time.

In some cases, a new mortgage could hurt your chances of getting new financing if you need it or might lead to higher interest rates. Mainly, it’s because lenders have to assume you may be making the payments, which could make you seem overextended.

There’s also the issue of your child missing a payment or defaulting. Since your name is on the loan, their poor financial activity impacts your credit report. Additionally, you’re legally obligated to repay the loan, too. If an adverse situation arises, you may find yourself stuck in a complex legal and financial matter.

Ideally, you need to ensure that you won’t have a need for any new financing personally or that your creditworthiness remains intact even if there’s a new mortgage on your report. Additionally, you need to have the financial means to take over payments immediately if your child is at risk of missing a payment or defaulting. If those don’t apply, then co-signing is dangerous.

Why Your Child Need a Co-Signer

One of the first points you need to examine is why a co-signer is necessary for your child’s loan. Essentially, you want to know why the bank doesn’t feel they qualify – either at all or for a competitive rate – without someone else being on the mortgage.

In some cases, requiring a co-signer isn’t inherently indicative of a significant problem. For example, many younger adults only have a limited credit history. As a result, they may not have a strong credit score even though they maintain good financial habits. It’s simply because they haven’t engaged with enough financial products to show lenders their creditworthiness.

However, if high debt-to-income ratios, a poor repayment history, or something similar is causing the lender to require a co-signer, that’s potentially a different story. When that occurs, there are red flags that your child may not be a responsible borrower, which makes co-signing particularly risky.

How Co-Signing May Impact the Relationship

Co-signing on a mortgage for a child can impact your relationship. There’s a chance you may judge their behavior moving forward, particularly when it comes to how they manage their money or treat the property. A choice that you view as poor could cause hard feelings, especially if it feels as if they’re putting your financial wellness at risk.

However, even if you aren’t actually doing it, there’s a chance your child may assume that you are judging their choices. This could cause them to view the relationship differently, potentially in a harmful way, regardless of how you’re responding to the situation.

In the worst-case scenario where your child misses a payment or defaults, you’re now in a challenging situation. At a minimum, it’s going to lead to a difficult conversation regarding you having to take over the payments. This can create hard feelings, even if paying the debt is within your capability.

On the other side of the spectrum, if you can’t manage the payments either, the circumstances are far harder to navigate. Your credit is hurt because of their actions, and you may end up in collections, with a foreclosure on your record, or other serious adverse actions on your report because they failed to pay. You may view this as a severe breach of trust, and the harm to the relationship could be severe, if not irreparable.

Alternatives to Co-Signing on a Home with a Child

In some cases, there are alternatives to co-signing on a mortgage that could still help your child succeed financially. What option is best may depend on the exact reason they’re considering a co-signer.

If they need a co-signer because they lack credit history, finding a safer way to help them build there’s up might be a better choice. For instance, you could add them as an authorized user to one of your credit cards, allowing them to benefit from your good financial habits. Co-signing on a smaller personal loan that’s easier to take over if something goes awry could also work.

Another option is to provide your child with down payment assistance. That can lower the amount they have to borrow, potentially skewing things in their favor. Each parent can give a child a gift of up to $16,000 (as of 2022) per year without the child incurring any tax-related responsibilities. That can lead to a potential tax-free total of $32,000.

If you’d like to give a larger down payment, then the lifetime gift exclusion may come into play. Since that’s potentially complex, you may need to consult with an accountant or similar financial professional to determine the possible consequences of doing so.

Finally, if you’re financially able, you could purchase the home on your own. Then, rent it out to your child for the monthly mortgage payment amount. If their financial situation later improves and they can purchase the house from you, then they can get a loan, and you can transfer ownership that way. If not, then you potentially have an investment property that you can rent to others or sell.

Should You Ever Co-Sign on a Home with One of Your Children?

Ultimately, co-signing on a home with one of your children is risky. At a minimum, it impacts your credit, often limiting your access to new financing if you would need it.

However, it also puts you on the hook for a large debt. If your child may miss payments or default, repaying the loan is your responsibility. If you can’t do it, then you’ll also face the consequences of going to collections or ending up in foreclosure. Plus, co-signing on a mortgage can put a strain on the relationship.

Now, this doesn’t necessarily mean that co-signing is never a good idea. If you’re able to handle the financial part of the equation without an issue and the relationship is strong, with solid communication, then it may be alright. Just keep in mind that using an alternative may be a better choice, allowing you to offer assistance without taking on unnecessary risk.

Do you think it’s ever a good idea to Co-sign on a home with one of your children? Did you co-sign on a home loan and want to tell others about your experience? Share your thoughts in the comments below.

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Selling Your Vehicle Via a Private Sale-Follow These Steps

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Selling Your Vehicle

When you’re looking to sell a vehicle, a private sale might be the most attractive option. Often, you have the potential to get a bit more cash by going that route, as the buyer isn’t necessarily going to flip the car for a profit. However, a private-party sale is typically more complicated than the alternatives. If you want to make sure you handle it correctly, here are steps to follow when selling your vehicle via a private sale.

Get a Value Estimate

The first step you need to take is to estimate the value of your vehicle. In many cases, it’s wise to get an inspection from a mechanic you trust. While it may cost a little money, they’ll be able to find any issues that you may want to address to ensure you get top-dollar. Otherwise, you can adjust your price based on the information.

If your vehicle is in exceptional shape, then you’ll have proof of that, too. That may help you secure a higher asking price, all because you went the extra mile to get the information.

Once you know the condition, you’ll need to assess the aesthetics. Wear and tear, scratches, dings, cracks, stains, and other issues all impact the value of the vehicle. The same can go for lingering odors, particularly smoke or pet-related smells.

As you find those types of issues, you can choose to address them or leave them. With the former, you’ll have a better chance of getting a higher price, so it could be worth the effort, depending on the potential cost.

After making those decisions, you can estimate the value. There are online calculators – including one by Kelley Blue Book and another by Edmunds – that can make that process easier. They’ll take the make and model into account, as well as the mileage and condition.

Run a Carfax Report

While running a Carfax report isn’t technically a necessity, it’s a smart move. Many prospective buyers will want to see the information on the report – particularly when it comes to accidents – so it’s wise to see what’ll show up before you attempt to sell. That way, if there’s a mistake, you can get it corrected before it impacts a sale.

Plus, if the report is accurate, you can let potential buyers know that one’s been run already. Then, you can show it to them when they come to view the vehicle.

Find the Title

You’ll need the title for the vehicle to complete a sale, so you want to make sure you have your copy available. Otherwise, you’ll need to order a replacement from your local licensing or motor vehicles agency.

Getting a replacement title can take time, particularly if you want to avoid an expedite fee. However, you can’t complete a sale without one, so you want to make sure you either have it or have one on the way before you proceed.

Gather Maintenance Records

If you were diligent about maintenance, getting copies of your records can help you sell for a higher price. In some cases, you can request reports from service providers, particularly if you had the majority of your maintenance handled at one place. Otherwise, you may need to find your receipts or after-service printouts.

Thorough Clean Your Vehicle

Having a clean, tidy vehicle will make it easier to sell. You’ll want to remove all personal property before you invite others into the car, including items in glove boxes, seat pouches, compartments, or similar places. Then, clean the vehicle inside and out, ensuring every spot is addressed along the way.

What you’ll use to clean may depend on the materials present. However, it’s often best to choose options designed specifically for vehicle materials. That way, you know that they won’t damage any surfaces.

Otherwise, you can pay a company to detail your vehicle. While this can cost a little bit, it may save you some time and energy. Plus, you’ll know that the job was thorough.

Once you’ve finished cleaning, only put back genuinely essential items. Usually, that’s limited to the registration, proof of insurance, and any manuals that came with the vehicle.

Check Your Fluids (and Consider an Oil Change)

Before you sell, you’ll want to take a moment to top off any fluids. Ensuring the coolant, brake fluid, windshield wiper fluid, and oil are all where they should be makes a difference, as buyers may check those to estimate how much care you’ve given while owning the vehicle.

In some cases, going forward with an oil change – even if it isn’t time for one – is a smart decision. That way, it’s fresh and topped off, and there’s a new filter, which buyers may appreciate.

Replace Worn Windshield Wiper Blades

If your windshield wipers don’t fully clear rain from the windshield, replace them before you list the vehicle for sale. Otherwise, if you take buyers on a test drive and the weather isn’t on your side, it could make for a poor experience. If that happens, you may lose the buyer or get a lowball offer.

Contact Your Insurer

While some prospective buyers may have their own insurance that covers them during test drives, others may not. As a result, you’ll want to confirm with your insurance company that others driving your vehicle are covered under your policy while they’re behind the wheel. If that’s the case, find out if there are any conditions, just to be safe.

Take Multiple Photos

Once all of the steps above are done, it’s time to take photos for your listing. If your car is in running condition, take it to a location that will serve as a nice backdrop. Then, photograph the exterior from at least eight angles, showing the entire vehicle. If there’s damage to disclose, you may want to take some close-ups, too. That way, you can be upfront about any issues.

Since you don’t want the license plate to show in the images, you’ll need to blur the information using photo editing software. If you don’t have access to that, either cover the plates with a plain sheet of paper or remove them for the photographs, uncovering them or putting the plates back on immediately after.

For the interior, you just want to generally show the space with a picture or two. Then, get a few close-ups of any features you want to highlight, as well as any damage you’re disclosing.

Write Your Ad

Once you have the photos, it’s time to write the ad. You’ll want to cover the basics – such as the make, model, and mileage – as well as highlight features that’ll interest buyers and support your asking price.

If you’re not sure where to start, you can review currently active ads for inspiration. While you don’t want to copy what others say, it could give you an idea about what to highlight and how to format your ad.

Be aware that you may need to change up your ad for different platforms. Some sites give you more room for text than others, for example. As a result, you need to consider what works best on each platform you’ll use, ensuring you create an ad that will resonate with those specific users.

Place Your Ad

Once you’re confident in your ad, it’s time to place it. You can use low-cost resources like social media, Craigslist, or CarGurus if you prefer. An ad in a local paper may also be wise, especially if you’re in a larger city and it’ll show online and in print.

Putting a “For Sale” sign in your car window may also help. You can either list a contact number on it or point someone to an online ad. However, the latter isn’t easy to capture while the vehicle is moving, so keep that in mind.

Deal with Buyers

If your ad and images are enticing and your vehicle is well-priced, buyers will likely reach out relatively quickly. In most cases, it’s wise to favor written communication, such as text or email. That way, you can easily track what was shared in each conversation.

Initially, you want to ensure that the prospective buyer has a driver’s license. You may also want to ask if what they’re looking for in a car. That way, you can find out about any potential dealbreakers in advance.

It’s also wise to ask if they’re purchasing a vehicle for themselves or for someone else. In some cases, the latter is a red flag, particularly if you can’t speak with or meet the actual buyer, as that could be a sign of a potential scam or upcoming robbery attempt. However, there are some situations where it isn’t usually a concern, such as a parent purchasing a car for a teenage child.

Finding out when they want to buy and how they intend to complete the purchase is critical, too. If you need to sell quickly, a buyer that has to wait might not be a great fit if you’ve got other interested parties reaching out. If the buyer is using a loan, that can take time and may fall through, so you’ll need to decide if you’re willing to wait or take the risk or if you’d rather focus on cash buyers.

After you know how they intend to pay, you’ll need to arrange a meeting with the buyer. If they refuse, trying instead to pay by wire transfer and use a service to pick up the vehicle, that’s likely a scam. Insist on an in-person meeting in a safe area. Many police departments will allow people to meet in their parking lots, so you may want to reach out to your local one and see if that’s an option, as that’s one of your safest bets.

Handle Test Drives

Let others know where you’ll be, and take a friend or family member with you if possible. That way, if the buyer wants to test drive the vehicle, you can have someone already in the car, making it harder to steal. Confirm the buyer’s details before beginning, taking a picture of their driver’s license and sending that to another person not at the deal, as well as confirming it with the DMV.

If your contact comes to the meeting with another person, only let the buyer you’ve been communicating with in for the test drive. Have them follow a pre-determined route, sticking to main roads that are well-traveled to reduce the risk.

Keep a friend or family member updated as the test drive goes forward, letting them know when you pass various landmarks. That way, someone has a clear idea of where you’re at on the route.

After completing the loop, speak with the buyer about their interest and discuss next steps. Some may be ready to move forward with a purchase. Others may need to think about it. Either way, outline what’s to come and, if you’re showing the car to different buyers, let them know, ensuring they aren’t surprised if it sells before they decide.

Complete the Sale

Once you’ve found a buyer, it’s time to wrap up the sale. You’ll usually end up negotiating the price. Know what your bottom dollar is before having the conversation. Then, go back and forth with the buyer, ensuring you don’t agree to an amount below that number.

If a buyer doesn’t offer a fair price, don’t be afraid to walk away. If your price is reasonable based on the condition of the vehicle, it’s better to move on to another buyer than get bullied down too far.

With the price settled, it’s time for payment and title transfer. Make sure the buyer shows up with the agreed-upon payment amount and type. Be wary of personal checks, as those may not clear. Instead, stick with cash, cashier’s checks, or money orders, as those are far safer.

Only sign over the title after payment is received. After that, the vehicle belongs to the buyer. Deposit your payment immediately and contact your motor vehicle department to record the sale with them. Reach out to your insurer, too, removing the vehicle from your policy.

Have you ever sold a vehicle using a private sale and want to tell others about your experience? Can you think of any other steps a person should take along the way? Share your thoughts in the comments below.

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Want to Retire Now-Here’s How (5 Tips You Can Actually Use)

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want to retire now

Most people have a set plan for when they will retire. However, as we age, there’s also a chance we’ll want to accelerate that timeline at the last minute. While retiring immediately can be difficult if that wasn’t your initial plan, it may also be doable depending on your age, retirement savings, and more. If you want to retire now, here are five tips to help make that possible.

1. Review Your Income Potential

If you want to pull the trigger on retirement earlier than you originally planned, you need to take a close look at all of your potential income sources. That way, you can make sure that you could financially support yourself before you leave the workforce or, at least, your current career.

In most cases, you want to explore traditional and unconventional options. For example, if you’re at least 62, you could see if starting your Social Security benefits early makes sense. If you’re 59 ½ or older, you can also tap into your other retirement savings accounts without a penalty.

Do the math to see if fully retiring now is an option. If it isn’t, then you can expand your analysis. For instance, you could see if a part-time or freelance job could give you enough to make ends meet.

Another unconventional choice for homeowners could be renting out their house. If you could bring in more than your monthly mortgage payment (including insurance and property taxes) and could move into a rental in your area that costs less than your current mortgage, it’s worth considering. You could come out financially ahead, potentially making retirement more viable.

Alternatively, you could get a roommate, giving you an extra person to help cover household expenses. If you’re in a tourist area, you could also explore turning a room in your home into a short-term rental. Often, the latter option works best if there is a bedroom with its own bathroom near a semi-private entrance into your home.

However, you could turn your entire house into a short-term rental if that has more earning potential than a long-term arrangement. While you’d still end up moving out, it could mean generating more cash and avoiding the constraints of a traditional landlord-tenant agreement.

2. Cut Expenses Ruthlessly

If retiring now is genuinely a priority, you may need to be ruthless about cutting expenses. While small changes like ditching cable and limiting dining out can help, you may have to think bigger if your available retirement income wouldn’t make your current lifestyle possible.

Look at every possible opportunity to cut back. For instance, you may want to consider downsizing your home. Along with reducing your monthly mortgage or rental payment, you may be able to bring down the cost of some utilities that way. Additionally, if you’re a homeowner, you may be able to sell, giving yourself a small nest egg to support your semi-spontaneous retirement.

When it comes to food spending, consider how you could use your time during retirement to limit that cost. For instance, you could commit to cooking fully from scratch, such as making your own bread and pasta. You could also start a vegetable and herb garden and learn to preserve or can.

3. Adjust Your Portfolio

Traditional advice is to reduce the risk in your portfolio as you age, ensuring you don’t run the risk of losing value during retirement. However, if you want to retire faster than you originally planned, being a bit more aggressive could be a necessity.

With a more aggressive approach, you boost your earnings potential in exchange for more risk. It’s important to note that losses may be more likely, but like earnings, they aren’t guaranteed either. Exactly how this unfolds depends on where you position those investments. As a result, you may want to speak with a financial advisor about your goals and get insights about potential changes to your current allocations, ensuring you can balance risk with reward potential.

4. Consider Moving to a New City or State

While moving can cost a bit, heading to a new city or state may make an immediate retirement more viable. The cost of living varies by location. If you’re in a high-cost area, going to one that’s more affordable can make retiring sooner rather than later a genuine option.

Similarly, not all states tax retirement income the same way. If you choose a state without an income tax or one that doesn’t tax Social Security or other kinds of retirement income (or has a generous exemption that covers most or all of your income), you might find that retiring now doesn’t mean you can’t be comfortable.

5. Become an Expat

Not wholly unlike the option above, becoming an expatriate (expat) and moving to a different country could allow you to retire now without any financial issues. There are plenty of countries with significantly lower costs of living. While a dramatic lifestyle change may also come with the territory, it’s worth considering if retiring immediately is legitimately a priority.

Before you go this route, you’ll need to do a significant amount of research. Along with focusing on budget-friendly countries, taking safety into consideration is also essential.

You’ll have to review laws and rules regarding moving to the country as a non-immigrant, too, as they can vary. See what kind of visa may be required, whether there are limits on property ownership, if you’ll need to take steps to access healthcare locally, and more. That way, you can get a comprehensive picture of what you’ll need to do to transition successfully while remaining on the right side of the law.

Did you spontaneously retire ahead of your original schedule? If so, do you want to let others know how you got financially prepared for retirement? Do you have any other tips that can help someone retire as soon as possible? Share your thoughts in the comments below.

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