Here’s Why You Shouldn’t Cut Your Budget to the Bone to Get Out of Debt

Getting out of debt is a lot like dieting. Sure you can stop eating, but that approach isn't sustainable. Here's how to focus on the long term.

So you have some debt that you need to pay off. If you listen to the advice of many get-out-of-debt gurus, you should pay it off as quickly and intensely as possible. They say you should never set foot in a restaurant, go on vacation, or do anything “extra” until the last credit card and student loan are paid off.

This seems like a good approach. If you can just cut out all your extra expenses — and maybe bring in some additional income — you’ll get out of debt much sooner, right?

Well, maybe not.

In fact, becoming debt-free may be quite similar to getting to and maintaining a healthy weight. The intense, fast options may seem like a good idea, but they can actually have negative consequences.

Paying Off Debt & Yo-Yo Dieting

Intense weight loss strategies can often result in what’s called a “yo-yo diet.” It’s when you lose a bunch of weight quickly only to gain it back quickly after your intense efforts are done. Even Biggest Loser contestants aren’t immune to this problem.

If you cut calories dramatically for three weeks before a big event, sure you’ll lose weight. But you haven’t made sustainable changes that will help you stay healthy over the long term.

This is similar to getting out of debt. Sure, you can cut your budget to the absolute bare bones to pay off credit cards in a matter of months. But does this approach really help you build sustainable habits — and a sustainable budget — for the long run? Maybe not.

My husband and I struggled with this early on in our marriage. We wanted to pay off our student loans and car loan desperately. So for a few months, we’d cut everything extra out of our budgets. No restaurants. No fun money. No nothing.

It would work for a bit, and we’d make some progress. But eventually, we’d get to the point where we felt so restricted, we just had to break free. And break free we did. Usually to the tune of a couple hundred dollars or more of “unnecessary” spending.

We went through this cycle for literally years until we learned to take a more measured approach to our “debt diet.” We still keep a close eye on our spending and try not to waste money. But we each have a monthly allowance for things like new clothes, our hobbies, and other personal items. And we have a date night fund so that we can enjoy each other’s company out of the house at least once a month.

This extra spending means we’re not paying off debt as quickly. But it also means that we avoid those splurges that used to throw us completely off track.

You Should Still Enjoy Life

What’s the main point of losing weight on a diet? Sure, you want to look good in a pair of jeans. But you also want to be able to move more freely, have more sustainable energy levels, and just enjoy life more.

What’s the main point of getting out of debt? Sure, you want to stop paying ridiculous interest rates on your credit cards. But you also want to free up money in your budget so that you have more options financially, so that you can enjoy life more.

So what’s the point of dieting or paying off debt if you’re miserable for months or years while you’re doing it?

When you’re dieting, you could cut out everything but salads with dry grilled chicken and probably lose weight very quickly. Or you could learn to make delicious, healthy meals that you love. And you could give yourself tiny splurges once in a while. You might see slower, steadier weight loss progress, but you’ll enjoy life while working towards your goal.

The same applies when paying off debt. You could spend on only the absolute necessities — food, housing, utilities, and transportation — to pay off debt more quickly. Or you could create a reasonable, sustainable budget that allows for frugal vacations, occasional meals out, and entertainment options you love. Again, you’ll see slower, steadier progress, but you’ll actually enjoy life while getting to that debt-free goal.

Your Approach Depends On Your Situation

Are there some times when a quick crash diet may be appropriate? Sure. Bodybuilders who are already in excellent shape will often cut calories dramatically right before an event. They’re just taking their everyday discipline one step further for a few days or weeks.

Similarly, what if you’re generally good at managing your money but just had an unexpected emergency — a broken-down vehicle or a medical emergency, for instance — that bloated your credit card debt? In this case, a few weeks or a couple months’ worth of cutting your budget to the bone to pay off the debt may make sense. Since you’ve already got good money management habits in place, you’re unlikely to rebound into more unnecessary spending.

But if you’re staring down a scale that says you need to lose 50 pounds? Research shows that slow and steady is the way to go.

And if you’re staring at massive amounts of debt? Slow and steady may work better for you, too.

Some Tips & Tricks

So how do you get started with a slower, steadier approach to paying off debt? Here are some tricks we’ve swiped from the diet world:

Make smart swaps on things you eat every day. When you’re trying to cut calories, it’s amazing how much progress you can make just by switching to a lower-calorie salad dressing or sprucing up your breakfast routine. The same goes for your finances. Try refinancing your mortgage or auto loan, renegotiating or even eliminating your cable bill, or revamping your insurance policies for painless ways to save money month after month.

Also keep in mind that your credit can impact how much you pay in mortgage and auto loan interest, and even increase your insurance costs if it isn’t very good. You can keep track of your credit by checking your credit scores regularly right here on Credit.com.

The quality of your calories matters. More and more research is saying that “calories in, calories out” isn’t the end-all-be-all of dieting. High-quality foods, especially healthy proteins and fats, can keep you satisfied for longer, making cutting calories easier. Similarly, not all spending is equally satisfying. If you only have a few extra bucks a month to enjoy life, spend it on what really makes you happy. (Hint: Experiences are usually a better bet than more stuff!)

Track your progress. Weekly weigh-ins are an important part of many weight loss programs. Weighing in often helps keep you motivated — and lets you spot problems quickly so you can correct your course. When paying off debt, keep track of your debts each month. Consider using a line chart to get a visual representation of your debt dropping each month over time.

Budget calories for enjoying. Many successful weight loss programs operate with the idea of a cheat meal, cheat day, or set number of cheat calories per week. This means you know how much and how often you can splurge. Do the same for your budget. Set aside some fun money each month, and you’ll reap the benefits of staying on track without feeling miserable.

Paying off debt isn’t exactly like dieting, of course. But you can draw plenty of parallels. So when you’re trying to get debt-free, think about ways to make your progress steady and sustainable over the long haul.

Image: LeoPatrizi

The post Here’s Why You Shouldn’t Cut Your Budget to the Bone to Get Out of Debt appeared first on Credit.com.

Take the Money Stress Out of Vacation With This Travel Checklist

Vacations can actually be pretty stressful. But if you lay the right financial groundwork beforehand, you'll be better able to enjoy yourself.

The vacations we take are often some of the most memorable times in our lives. But they can also be stressful. Leaving your life behind for a few days can be relaxing, but it takes planning and money. Luckily, there are a few basic steps you can take to ensure your vacation is the break you need and not another source of stress. Here are nine tips to follow.

1. Make a Budget

Know what you’ll need to spend. Do your research ahead of time, not only on the cost of travel and accommodations but also your activities and the meals you’ll eat. You may also be able to purchase tickets for certain activities ahead of time this way.

Add up your costs, and you’ll know whether you have enough saved up to afford your itinerary or need to scale back your trip. Check out our tips for saving money fast.

2. Make a Packing List

Don’t deplete your precious vacation budget to buy a rain jacket or swimsuit you forgot to pack. Check your itinerary and the weather forecast ahead of time and lay out exactly what you’ll need to bring. Here’s a list of 13 essentials you should pack.

3. Bring the Right Credit Card

You’re paying enough for your trip without adding foreign transaction fees to every swipe. If you’re not sure whether your card charges these fees, just check the terms and conditions.

If you’re thinking of applying for new plastic, check out a few cards with no foreign transaction fees here. In addition to saving on fees, some cards, especially those affiliated with airlines, will allow you to check your first bag free, among other perks. (Remember, you’ll need a solid credit score for many travel rewards cards. You can check two of your scores free on Credit.com.)

You’ll also want to make sure you know your PIN (or call your issuer to reset it), especially if you’re going to Europe. Many card readers there use a chip-and-PIN system rather than the chip-and-signature system that has become common in the United States.

If you’re going to bring your ATM card, check your bank’s website or call them up to find out whether they have ATM locations in your destination of choice. This way you can avoid paying hefty ATM fees if you need to withdraw cash.

4. Call Your Card Company

You should also call your bank and credit card company to let them know you’re traveling. They’ll be monitoring your card activity and the sudden appearance of purchases in a foreign land may lead them to think your card has been stolen and freeze your card. You don’t want the hassle of having to prove that you’re you while you’re on vacation. Call ahead to avoid it. Many banks and card issuers allow you to set a travel alert online or using their mobile app, as well.

5. Make Sure You’re Covered

Many health insurance plans don’t cover medical expenses while you’re abroad, so if you’re worried about paying for a potential health emergency, you may want to consider buying a travel insurance policy that covers such expenses. Some policies may also cover lost or stolen luggage. Before buying, be sure to check with your own insurer to see what they’ll cover. You should also check your credit card’s terms and conditions. Many offer travel insurance if you paid for the trip using your card.

6. Cover Your Bills

You may be able to ignore work emails for a few days, but you still have to pay your bills. If any payments for utilities, your credit card or rent come due while you’re away, make sure you find a way to pay them ahead of time. While missing one payment probably won’t get your power shut off, a late credit card payment could result in late fees and hefty interest charges. Your landlord won’t be thrilled about a late payment either.

7. Hold Your Mail

Don’t let your mail pile up in your mailbox, especially if it’s not secured. That stack of paper could be a treasure trove for identity thieves. Holding your mail temporarily is as simple as a visit to the Postal Service website. They’ll keep it safe at your local post office until you return.

8. Wait to Change Money

Most likely you’ll get a better exchange rate when you get to your destination. If you’re worried about having local currency once you get off the plane, most airports will have ATMs that offer better exchange rates than the ubiquitous cash-exchange kiosks in tourist areas. Just make sure you followed the earlier advice about calling your bank.

9. Get Your Passport Well Ahead of Time

If you’re going abroad, be sure to apply for your passport (or renew it) at least eight weeks before you leave. If you need it any faster than that, you’ll have to pay for expedited service.

It might seem like a lot of work, but taking these steps should help minimize your money stress before your big trip.

Image: Geber86

The post Take the Money Stress Out of Vacation With This Travel Checklist appeared first on Credit.com.

Is Your Social Media Habit Causing You to Overspend?

Keeping up with the Joneses gets even harder when it includes celebrities that you follow on social media.

Social media is a multi-billion-dollar industry where ordinary people become overnight sensations and companies cash in on people’s apparently insatiable need to be constantly connected.

The many different platforms have enhanced our lives by making us feel connected and that our opinion matters. Yet what if all this sharing has a dark side?

How to Tell if Social Media Is Causing You to Overspend

Here are some questions to determine if your overspending is caused by social media.

  1. Do you constantly check to see what your friends bought?
  2. Are you spending more time than usual on social media?
  3. Do you feel anxious, jealous or dissatisfied with life after checking social media?

It used to be just the neighbors and co-workers some people tried to keep up with or outdo. Now it’s everyone in your social circles, posting about their latest luxury cruise “just because” or posting beautiful pictures of their latest $100,000 kitchen remodel on Pinterest. It might not even be people you “know,” just people you follow (and envy) online.

This might not even be a conscious choice; you might be overspending just to keep up appearances. You might splurge on a $2,000 sofa because you saw one online, even though it’s way out of your budget. You think it is OK because of the special financing, but you can quickly get in trouble if you miss even one payment, because the interest starts accruing from the day of your purchase. Suddenly that $2,000 sofa balloons into $3,000, and you are still paying on it for months or years after you bought it. (This debt isn’t just adding up interest — it could also be harming your credit. You can find out by reviewing your free credit report summary on Credit.com.)

Resentment could be another byproduct of social media. You see all the seemingly perfect people online and you wonder why your life isn’t like that. You feel like it’s not fair, so you spend the $600 you managed to save for your emergency fund on one wild shopping spree. Then when a true emergency occurs, you have nothing left besides a few cool posts on Facebook and some new clothes or furnishings.

The truth is, you don’t know everything behind the photos and posts. The couple with the gorgeous beach house, two perfect kids and adorable puppy? Their finances could be in worse shape than yours. You only get to see the surface or mask they choose to post. Basing your own desires on what you perceive is like falling for the Wizard of Oz’s tricks. It’s time to see what’s behind the curtain.

How to Stay Connected & Avoid Overspending

How do you turn it around? First, decide what your goals are. What do you want your life to look like? Do you want to be debt-free? Do you want your house to look like a spread in a magazine, complete with a stack of bills? Once you pinpoint your priorities, you can concentrate on mini-goals to reach them.

Take control of your spending by keeping track of every penny. For every purchase, ask yourself four questions:

  1. Is this something I really need?
  2. Do I already have something like this I can use instead?
  3. Can I find it cheaper somewhere else?
  4. How will this enhance my life or goal?

After a while, the questions will become automatic and you will find yourself letting go of the constant need to get new things, and instead become more content with what you have.

Unplug for a while, at least while you get on track with your spending. There are so many ways to connect that it can become addicting. Like any addiction, sometimes going cold-turkey will break the spell it holds over you. Just try it for a week and see how you feel. Better yet, see how your finances are doing.

How you choose to engage could be the difference between failing finances and a healthy budget. Once you master your overspending, social media can be fun again.

This article originally appeared on The Dollar Stretcher.com.

Image: andresr

The post Is Your Social Media Habit Causing You to Overspend? appeared first on Credit.com.

Create a Budget Designed Just for Dumping Debt

Even if you hate spreadsheets and numbers, coming up with a debt-destroying budget can be simple with a single rule: always apply excess funds to debt.

This rule can work with two of the most common debt repayment methods: the debt snowball or the debt avalanche.

The debt snowball method attacks smaller debts first, regardless of interest rate. The goal is to motivate you with small victories in order to go on and gain confidence to pay off larger debts. The debt avalanche method focuses on paying down debt with the highest interest rate until you pay off the balance with the lowest interest rate.

How Much Can I Throw Toward My Debt?

The math for your budgeting process is super-simple: Monthly income minus monthly expenses equals the amount of extra money you can apply toward your debt each month. The emphasis is on extra money because you’ll still want to pay your minimum debt obligations to avoid getting behind on your payments.

Note: If you still need help with the math because you’ve got to actually figure out how much you spend each month, you can use an app that connects with your bank to add up all your expenses. Check out services like Mint.com, YNAB, or Personal Capital to help you get quick figures around your income and spending along with categories for each.

Though the math is not too complicated, the harder part could be increasing the gap between your income and expenses to actually have a surplus in your budget.

Unless you’ve got little to no wiggle room in your budget, you don’t have to start cutting expenses quite yet. However, there are some expenses that are discretionary and should be omitted from your equation until you’ve tamed your debt load.

For now, just get a baseline of what you should have left over at the end of each month once all your bills and expenses are accounted for. If it’s $15, great. Start there. If it’s more, even better.

Once you get this number, use it to pay more on your debt than is required. So if your minimum payment is normally $50, pay $65 with your $15 surplus. It can be the smallest debt or the account with the highest interest rate. What matters now is that you do something to get into the habit of making extra payments on debt and accounting for it in your monthly budget.

How to Apply This Rule in Various Scenarios

If you budget with a goal in mind, the purpose of your money becomes clearer. Any kind of money that turns out to be extra should be applied to debt to reduce your balances. But the key is being mindful of extra money, even when it doesn’t seem to be extra.

For example, getting a raise is a reason for some people to increase their standard of living. They might move to a place with a view or buy that lavish SUV they’ve been eyeing for a while. If you’ve committed extra funds to a purpose (paying off debt), the decision is made for you far in advance of you actually getting the money.

The same goes for your income tax refund check. You might bank on this money every time income tax filing season comes around. While many people are planning spring break trips and shopping sprees with this money, you’ve got to make up your mind that this money is already earmarked for debt repayment.

Finally, there’s always that unexpected windfall: an inheritance, a settlement, or any type of money you never saw coming. This might be one of the most difficult chunks of money to part with for the sake of paying off debt. After all, you didn’t know it was coming, and maybe you didn’t have to work too hard for it.

In this case, it’s pretty tempting to want to splurge and blow it all on something you think you deserve. Things can get complicated at this point. But if you keep following “the rule,” this money is technically already allocated, and your debt repayment budget suddenly becomes easier to stick with.

Keep Widening the Gap Between Income and Expenses

This is the fun part. Why? You get to be creative and have more control over your debt repayment timeline. Want to get out of debt fast? Then you’ll have to figure out how to make your income outpace your expenses. It could mean adding a side hustle to the mix or getting more aggressive with cutting out or decreasing expenses.

Adjusting Your Tax Withholdings

If you pocket a large tax refund each year, ask yourself why. It is likely because you are paying too much in income taxes throughout the year. If that’s the case, you can change your tax withholdings through your payroll department to keep more money in your pocket throughout the year. It will mean a smaller tax refund come tax time, but you’ll have more cash on hand to put toward your debt with each paycheck.

Use this IRS withholding calculator to estimate your withholdings.

Decrease Your Income Tax Liability

There are more than a few ways to decrease your income tax liability. From IRA contributions to tax tips for entrepreneurial endeavors and other tax credits and deductions, there should be one or more things you can do to owe less on your tax bill.

Cut Expenses Where You Can

There are so many ways to save money on so many things. You can start small with things like eating out and having cable and work up to saving money on housing costs or refinancing student loans.

Then there are the diehards who go full monty and go through full-on spending freezes on things like takeout and travel. The list of cost-cutting measures can get pretty long, but you get the point: Go through your spending with a fine-tooth comb and find out where you can save and what you could cut.

Increase Your Income

Creating another stream of income sounds gimmicky, but there are ways to do it without getting caught up in scams. You can find a part-time job, provide consulting services on the side, or even start a mini-business like dog walking or car washing. It shouldn’t be anything that will cost you tons up front to start, and it shouldn’t hinder your ability to keep your full-time job.

You may find that you have to try a few things before you come up with the perfect combination of low overhead, quick to start, and profitable. That’s OK. Just keep plugging away until something clicks. It’ll be more than worth it to add that extra income to the budget for paying off more debt even faster.

Remember the Golden Rule: Excess Cash Goes to Debt

It all comes down to committing your cash to a purpose ahead of time. No matter how your financial circumstance changes, you’ll know what to do when you’ve got a surplus of money.

You’ll have to come up with a list of things you are willing to do to increase your cash reserves, but if you keep the goal in mind of continually applying extra funds toward debt, you’ll save on interest and also pay down your debt faster.

The post Create a Budget Designed Just for Dumping Debt appeared first on MagnifyMoney.

6 Ways to Save More Money Every Month

Saving money isn't easy, but it also doesn't have to be hard. Here are some simple ways you can get started.

If saving money was easy, everyone would be doing it. Unfortunately, the excuses for not are easy to stack — what with mortgage or rent, utilities, kids, student loans, pets, food and just the slightest social life, it can seem like there isn’t a penny to spare.

The trick to saving more is to make it simple, make it automatic and make it something you never have to think about. Still not convinced you can hack it? Check out some of these easy ways to save more every month and you might be surprised how much your bank account grows.

1. Sign Up For an Account That Automatically Saves For You

Many banks make it easy for customers to save these days by doing it for them automatically. For example, enroll in Bank of America’s Keep the Change program and for every purchase you make using a Bank of America debit card, the bank will automatically round your purchase to the nearest dollar and transfer the difference from your checking account to your savings. How easy is that? Check with your own bank to see if they offer a similar program.

2. Automate Your Savings Yourself

If you’re more of a “do-it-yourself” kind of person, automate your savings yourself by signing up for a monthly transfer directly from your checking into your savings account. You’ll know the transfer is coming every month, which will make you feel good, but you won’t have to go in and physically make the transfer yourself, which will feel even better. If you can, try setting up multiple savings accounts for your different goals (ie. house, travel, emergency, etc.). By purposefully diverting your hard-earned money into specific buckets, you’ll feel more like you’re working toward an actual goal, rather than just generally saving for a rainy day.

3. Use a Financial App to Track Your Progress

If you find that it’s hard for you to save because you aren’t seeing your progress at any given time unless you log into multiple accounts, there’s an app for that. Download a budgeting app and you can connect all of your banking in one area for ease of use. Don’t feel comfortable with an app? Your bank may offer something similar on their website. Now every time you make a purchase, put money into savings or take cash out of the ATM, you’ll be able to see exactly how your money moves have affected your current savings, goals and budget.

4. Make the Most of Your Credit Cards

If your current credit card isn’t garnering you some type of rewards, it may be time to make a switch. These days, credit cards offer such great incentives through rewards programs, so unless you’re prone to carry a balance on your card from month to month (rewards cards can come with higher annual percentage rates, which can cut into any rewards you earn), you could be missing out on some serious savings. If it’s pure cash that you’re interested in, check out our guide to finding the right cash-back rewards credit card.

5. Learn to Haggle

Remember, cars aren’t the only things you can haggle over. Check with your internet and cable provider and call your cell phone company to see if the price you currently pay is the best they can do. Ask for discounts on items in the grocery or retail stores, too. Take the difference between what you would have been paying and the final price you end up with and stock it away in savings.

6. Avoid Paying ATM Fees

You might think ATM fees aren’t worth worrying about, but those quick trips to the ATM can really add up. Fortunately, there are plenty of ways to avoid paying ATM fees.

Remember, you’ll save money on everything from your mortgage and auto loan to credit card interest if your credit scores are good. If you don’t know where yours stand, you can find out by taking a look at your free credit report summary.

Looking for more ideas on how to save each month? Check out these 12 ways to lower your cellphone bill. 

Image: kieferpix

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

The post 6 Ways to Save More Money Every Month appeared first on Credit.com.

How to Set Up Your First 401K

There's a lot to consider when saving for retirement. Here's what you need to know to get started with a 401K.

So you’ve decided to save for your retirement using your company’s 401K plan. Congratulations! It’s a great way to save. But now what? Which funds do you choose? How much should you contribute? Are there limits? How do your employer’s matching funds actually work? Can you access the money if you need it before retirement?

Obviously, there are a lot of questions that can arise when it comes time to set up your retirement savings, but we’re here to help. Here’s what you need to know to set up your 401K.

What Is a 401K?

The section of the U.S. tax code that describes these retirement savings plans is Section 401(k), thus the name. These plans let you invest pre-tax dollars directly from your salary, along with any additional investment made by your employer. Unlike an Investment Retirement Account (IRA), 401Ks are sponsored by employers, and, if offered at all, they must be made available to all employees of the company sponsoring the 401K.

Your employer does have the right to impose a couple of restrictions, however. 1. They can require that you work full-time for a period of time before eligibility, and 2., can also stipulate that you be at least 21 years old before enrolling. That’s why it’s always good to ask about eligibility when interviewing for a new job.

You Choose Your Investments

Most 401Ks are self-directed. That means you choose where to put your money from a list of funds made available through your 401K plan provider (Vanguard and Fidelity are two of the larger firms providing 401K funds). This can get tricky. Do you choose the safest investments that offer little risk but less reward? Do you opt for high growth? Targeted funds? Emerging market funds? What about bonds?

Obviously, you’re going to want to do some research, perhaps even talk to someone with some expertise. Most plan providers share details about the individual funds they offer on their websites, or at least have links to more details. Some even offer tools to help you choose which funds fit your needs, while others make real live people available for limited consultations. Seek out the assistance you need to fully understand what you’re doing with your savings.

You Also Choose How Much to Save …

There’s really no correct answer when it comes to how much to save, but certainly, saving as much as you can for retirement is a good idea. And if your employer offers matching funds (free money!) for your investments, you’ll at least want to invest the full amount they match. So, for example, if your employer matches up to 3% of your salary, you’ll want to invest at least 3%, though certainly you can invest more. Here are some tips on how to maximize your 401K.

… But There Are Limits

Federal law allows investors to put up to $18,000 into a 401K each year unless you’re over age 50, when you’re allowed to make an additional $6,000 in “catch-up” contributions.

If you’re in the lucky position of being able to save more than these limits, there are investing alternatives to your 401K that you may want to consider. These include IRAs, certificates of deposit (CDs) and even individual stocks if you’re familiar enough with the markets.

You Can’t Use Your Money …

Keep in mind that a 401K isn’t like a savings account. But for a few exceptions, you can’t withdraw your money before age 59½ without paying early withdrawal penalties and taxes. You can take a loan against your 401K if your employer’s plan allows for that, but only for specific purposes like education, medical reasons or first-time home purchases. Your repayments will come right out of your paycheck, making the process simple, but there are some dangers you’ll want to consider before borrowing against your 401K.

If you’re just starting out in the investing/saving world, you may want to consider putting a portion of your income toward an emergency fund that is easily accessed, carries no penalties and can get you out of a jam, like a giant car repair bill, when you need it.

… But You Can Take It With You

To another job, that is. When you leave, you won’t lose your investments, though you could lose contributions made by your employer. That’s because some employers require a “vesting period” for their contributions to your 401K. Essentially, it means you have to work for the company for a predetermined period of time before you can claim what they’ve given you.

When you leave, you simply set up a rollover IRA with your plan provider. Those funds can then either stay put in the IRA or be rolled over to your 401K with your new employer. You’ll want to compare the income history for the funds before deciding where the money will best serve you.

Retirement may feel eons away, but it pays (quite literally) to start early. Fortunately, we’ve got a full list of 50 things millennials can do now to retire at 65.  

Image: AJ_Watt

The post How to Set Up Your First 401K appeared first on Credit.com.

Spoil Mom, Not Your Budget, With Mother’s Day Gifts Under $50

Mother's Day can be expensive. It's worth spending on mom, but she'd be the first to tell you not to blow your budget on a Mother's Day gift.

Thinking of ideas for Mother’s Day gifts can be stressful. Our mothers, grandmothers and aunts play such important roles in our lives and we want our gift to reflect how grateful we are. But there’s no need to go overboard – after all, the moms in our lives wouldn’t want us to overspend. We found 16 Mother’s Day gift ideas less than $50 that will warm their hearts and please your wallet. Some make great Mother’s Day gift basket ideas, too.

$50 & Under

Beauty Infusion Quinoa & Avocado for Hydrating
$49 at SkinAuthority.com
Beauty Infusion Quinoa & Avocado for Hydrating will resolve skin care woes in no time. The serum contains quinoa protein and avocado oil to intensely nourish the skin. She will love this beauty treat. (If you really want to treat mom and money’s no object, book her for one of these ridiculously expensive hotel spa treatments.)

Windowbox Medium Fishbowl Terrarium with Red, Pink, & White Forever Flowers
$43.98 at Windowbox
Perfect for the mom who may not have a way with plants, this glass terrarium contains colorful, mini “forever” flowers and greenery that don’t require sunlight or even water. This cheerful gift will always remind her of you.

RestoPresto
$39.99 at RestoPresto.com
For the mom who likes to be prepared for anything, the Resto Presto is a convenient, 55-by-31-inch water-resistant mat for sitting on the grass, on the beach or on a park bench after a rain shower. It can even be worn as a shawl. Folds into a tiny pouch when not in use, so she can carry it everywhere. Available in eight colors and includes mini stakes for securing the corners and a carabiner.

Touchstone Birthstone Collection Necklace & Earrings
$39 each at TouchstoneCrystal.com
Available in every birthstone, these pretty Ceralun pavé baubles add a sweet touch of sparkle. The necklace comes on a delicate rhodium plated chain, and the earrings have titanium posts. She will be touched you remembered both Mother’s Day and her birthday.

$30 & Under

Mind Fuel Nest ‘Because I Said So’ Tunic Tee
$24.99 at MindFuelNest.com
She’s in charge. This super soft tee, available in pink or white, is flattering and roomy and has stylish slits on the sides. 95% rayon and 5% spandex, in sizes small through large.

Armitron White & Rose Gold Women’s Digital Wrist Watch
$30 at Armitron.com
This sporty and sophisticated watch with white soft touch resin and rose gold-tone stainless steel accents will take her from the gym to brunch, and ensure she’s on time. Features include two time zones and water resistance up to 330 feet.

Photo Playing Cards
Price: $24.99 at CVS
She’s probably received her share of personalized gifts, but never a deck of cards. Photo cards from CVS are a gift that will remind her of you when she uses them. One photo of your choice appears on all cards, which come packaged in a clear, plastic storage case. Available in seven to 11 days with free shipping to a CVS store. (Check out these 18 ways to save at CVS.)

Godiva Chocolate Flower Gift Box
$25 at Godiva.com
Who can resist scrumptious chocolates in a flower-shaped box with butterflies? The pretty box is filled to the brim with individually wrapped truffles in mouthwatering flavors: dark chocolate lava, milk strawberry cheesecake and crème brulee. The best part is, the box is so pretty that it requires no wrapping.

She’s Her Own CEO Bistro Apron
$30 at KathrynStyleBoutique.com
Show everyone who is boss with this cute apron from Kathryn Style Boutique. This flattering, black apron is so comfortable, it’s sure to become her go-to when she’s cooking.

KN Karen Neuburger Live Love Lounge Tunic
$22.19 to $26.98 at Bon Ton
She works hard so she deserves comfy lounge wear. This tunic from KN Karen Neuberger is made from soft and forgiving fabric that feels great for relaxing or sleeping. It even has pockets. She may never take it off.

$20 & Under

Minx NY BeachTech High Performance Towel
$19.99 at MinxNY.com
If she’s a beach bunny, this will quickly become her favorite towel. It is soft and comfortable to lie on, and the anti-bacterial microfiber fabric will dry her off three times more quickly than a standard beach towel. When she’s heading to and from her destination, it folds up very small with its own strap. Available in four colors.

Smashmallow
$4 per bag at Smashmallow.com
If mom is always on the hunt for a new sweet treat, spoil her with some all-natural Smashmallow gourmet marshmallows. Available in delicious flavors like Meyer lemon chia seed, cinnamon churro and strawberries and cream, it’ll be tough to pick a favorite. A great addition to a Mother’s Day gift basket.

The Meaning of Michelle
$10.74 at Amazon
If you know a mom who is missing Michelle Obama, this compilation of essays from 16 accomplished writers is the perfect gift. It’s funny, smart and touching, and tied up in a tidy bow by rock star editor and writer, Veronica Chambers.

Golden Door Wildflower Honey
$18 for 12 ounces at GoldenDoor.com
Even the mom who has everything can use a jar of tasty honey. Extracted from hives on the grounds of the Golden Door resort in San Marcos, California, your purchase of this delicious honey also allows you to give back. All profits are donated to causes that aid at-risk children.

Angry Mama Microwave Cleaner
$9.99 at ContainerStore.com
No one likes to scrub a microwave, so this Angry Mama will give her a chuckle but also make cleaning her microwave a breeze. Remove “Mama’s” head, pour in some water and vinegar and heat. The steam will allow all dirt and grime to be easily wiped away.

Minted Notebooks
$16 and up at www.everymothercounts.org
If she still loves to write by hand instead of putting everything in her smartphone, Minted offers beautiful notebooks in many colors and patterns. Choose everything from how the pages are printed – from addresses to blank – to the kind of binding she’d like. And best of all, 100% of the proceeds will be donated to Christy Turlington Burns’ non-profit Every Mother Counts.

As you’re shopping for mom, make sure you’re also avoiding these common Mother’s Day scams. If you think you’ve been had, you can check two of your credit scores on Credit.com for any signs of trouble, like accounts you don’t recognize or a sudden drop in scores.

Image: eli_asenova

The post Spoil Mom, Not Your Budget, With Mother’s Day Gifts Under $50 appeared first on Credit.com.

Gifts for Mother’s Day 2017 That Cost Less Than $100

We know, you would buy your mom the world if you could. But you're on a budget, so try our affordable Mother's Day gift guide.

If you could, you would take mom on a world cruise to thank her for everything she’s done for you. Taking her globetrotting might be out of the budget, but it doesn’t mean you can’t give her something she’ll love, use and cherish.

These 20 gifts are guaranteed to delight, and they’re all $100 or less. Some are even less than $20.

Kamik Jennifer Rain Boots

Kamik-Jennifer-Boot-in-Navy

Photo Courtesy of Kamik

$64.99 at Kamik.com
If she’s not one for jumping in puddles, that’ll change once she steps into these cute boots. She’ll love the comfort and the classic style, and they’re available in five colors.

Terrace Jewelry Organizer by Umbra

Photo Courtesy of The Container Store

Photo Courtesy of The Container Store

$29.99 at ContainerStore.com
Mom has collected lots of baubles and bangles over the years and they’re all in a tangle. This three-tier lined wooden box offers a smart storage solution for her earrings, rings, necklaces and even her reading glasses. Drawers can slide out for display or remain neatly stacked. (If you or your mom have a jewelry habit, here’s what you need to know about the Kay Jewelers credit card. Just be careful not to apply if you don’t think you’ll qualify. You can check your free credit scores on Credit.com.)

Grow Oya

Photo Courtesy of Grow Oya

Photo Courtesy of Grow Oya

$24.95 and up at growoya.com
This clever clay receptacle waters thirsty plants with minimal effort. The Oya is buried in the garden for spring and summer and periodically filled with water. The plants in the vicinity draw the water they need. Because there is less surface watering, weeds are less likely to germinate. Available in three sizes. Wondering what to plant? You can grow these five groceries in your garden.

Tea Forte Rejuvenation Gift Set

Photo Courtesy of Tea Forte

Photo Courtesy of Tea Forte

$55 at TeaForte.com
If she needs a little “me” time, this gorgeous set will provide just that. In a beautiful gift box, she’ll find 10 green tea infusers, an 8-ounce porcelain cup and a tea tray, perfect for a peaceful and delicious afternoon tea. Is coffee more mom’s taste? These four credit cards are great for coffee lovers.

The Stylestring Classic String Collection

Photo Courtesy of The Stylestring

Photo Courtesy of The Stylestring

Price: $68 at TheStylestring.com
If mom has (or needs) a little edge, a Stylestring is the ideal accessory. Available in four colors, this versatile, vegan leather strand can be worn seven ways, including as a belt, bracelet and headband. She’ll love mixing it up every day.

Planted in Beauty Starter Kit

Well Within Planted in Beauty kit

$25 at WellWithinBeauty.com
Treat your mom to healthy skin with this set of six organic skin care products that are chemical- and toxin-free. These skincare products are packed with the highest quality plant-based ingredients, which encourage collagen production and protect her skin from environmental stressors.

Reversible Tote Purse

Photo Courtesy of Walmart

Photo Courtesy of Walmart

$9.36 at Walmart
The roomy tote will take her from the gym to brunch to the farmer’s market. It’s reversible so she can wear each color as the mood strikes, and best of all, it’s less than $10. Available in several color combinations.

OneLeg

Photo Courtesy of One Leg

Photo Courtesy of One Leg

$45 and up at OneLegUSA.com
This ergonomic stool will allow her to tend to her garden in comfort. She can sit and move easily while staying close to the ground and to her plants. Available in four different sizes and seven colors.

Meori Foldable ‘Mom Box’

Photo Courtesy of Meori

Photo Courtesy of Meori

$35 at US.Meori.com
An essential for the mom who needs her own special storage space for the car, the home office or a closet. With “Mom Box” emblazoned on the side, no one is going to mess with her stuff. Collapsible when not in use.

Atlas Coffee Club

Photo Courtesy of Atlas Coffee Club

Photo Courtesy of Atlas Coffee Club

Starting at $14 a month at AtlasCoffeeClub.com
Treat your adventurous Mom to a new coffee each month. As a member of Atlas Coffee Club, she’ll receive a monthly shipment of a coffee from a different part of the world, from the Costa Rica to Ethiopia. Each bag has its own beautiful packaging and cultural information. She’ll think of you each day as she brews a cup.

artnaturals Bluetooth Oil Diffuser

Photo Courtesy of Art Naturals

Photo Courtesy of Art Naturals

$49 at artnaturals.com
A blend of tech and Zen, this Bluetooth diffuser will scent the air with a fragrance of her choosing, play her favorite playlist, bathe the room in soft, colorful light and function as an alarm clock. Add a set of 16 essential oils, including cinnamon leaf, sweet orange and frankincense for $29.

Fischer & Wieser Make Mom’s Life Easier Gift Basket

Photo Courtesy of Fischer & Wieser

Photo Courtesy of Fischer & Wieser

$74.95 at Jelly.com
Sometimes, the most thoughtful gift is to make mom’s life easier. This basket is filled with “Mom’s” tasty sauces and seasonings from Fischer & Wieser. They’ll come in handy when she needs to whip up a quick, delicious meal. They’re preservative- and gluten-free.

Lano Lips Hands All Over Tinted Balm Trio

Photo Courtesy of Lano Lips

Photo Courtesy of Lano Lips

$41 at Net-a-porter.com
One for the kitchen drawer, one for the car, one for her purse. If she’s prone to dry lips, these will be her new go-to balms, as they soothe and nourish even the driest lips, thanks to ultra medical grade lanolin. The three tints offer just a hint of color for a little lift on the go.

Glamma Stemless Wine Glass

Papyrus Glamma stemless wine glass

Photo Courtesy of Papyrus

$14.95 at Papyrusonline.com
Your glamorous grandma needs her own special wine glass. This stemless glass is decorated with “Glamma” in gold foil and comes in a pretty, floral box, ready for gifting.

V-MODA Forza In-Ear Headphones

Photo Courtesy of V-Moda

Photo Courtesy of V-Moda

$100 at V-Moda.com
If she’s using old earbuds for phone calls and music, maybe it’s time for an upgrade. These durable, high-res earbuds deliver great sound for calls and tunes and come with a variety of fittings, sport fins and ear hooks to ensure perfect fit and comfort. They are available in orange, white and black with their own pouch. And if you want to go one step further, 3D printed, color and finish customization is available for an additional fee.

Salt of the Earth Bakery ‘The Whole Shebang’

Photo Courtesy of The Grommet

Photo Courtesy of The Grommet

$37 at TheGrommet.com
With flavors like coffee-infused “The Kona” to the decadent “The Chocoholic,” this box of cookies and brownies will have her grinning ear to ear. The treats are made with sea salts from around the world, for just the right touch of sophistication. The Whole Shebang includes three cookie flavors and three brownie flavors, with plenty to share.

Wahl Hot & Cold Custom Body Therapeutic Massager

Photo Courtesy of Max Warehouse

Photo Courtesy of Max Warehouse

$43.23 at MaxWarehouse.com
From a sore back to tightness in the shoulders, everyone has their share of aches and pains. Help mom find sweet relief with this hand-held massager. With variable speeds and seven attachments, including hot, cold and facial, she’ll be feeling better in no time.

Lorena Canals Leaf Baskets

Photo Courtesy of Lorena Canals

Photo Courtesy of Lorena Canals

$46 at LorenaCanals.us
This beautiful, cotton rope basket offers stylish storage for anything from yarn to magazines to toys. Soft and machine-washable, these baskets are available in Terracota, Natural and Green to suit her decor.

Philosophy Cleanse, Peel, Treat Trial Kit

Photo Courtesy of Philosophy

Photo Courtesy of Philosophy

$55 at Philosophy.com
If she’s been bemoaning dull skin, three simple steps will have her skin looking glowing, fresh and healthy in minutes. Cleanser and moisturizer are used daily, the peel is used weekly.

Vosges-Haut Chocolate Les Fleurs du Chocolat Collection

Photo Courtesy of EveryMotherCounts

Photo Courtesy of EveryMotherCounts

$45 at EveryMotherCounts.org
For every sale of this tasty truffle collection, Vosges will donate 20% of proceeds to Christy Turlington’s non-profit, Every Mother Counts, which supports efforts to make pregnancy and childbirth safer for women. Rich chocolate truffles are topped with garden-inspired delicacies, like orchids and bee pollen.

If you have money left over after shopping for mom, here are 11 other smart purchases for less than $400. And if you’re out of cash, take these four steps to stop buying stuff you can’t afford.

Image: Eva Katalin Kondoros

The post Gifts for Mother’s Day 2017 That Cost Less Than $100 appeared first on Credit.com.

How to Make Summer Camp Fit Your Family’s Budget

Affording summer camp can be a struggle for many working families. Here are a few ways to make camp fit any family budget.

Last summer, the New York Times ran a piece about families who can’t afford summer camp or other programs for their kids. It highlights a problem for many working parents: Summertime care for kids is expensive.

This is especially true if your kids are in public school during the year. You suddenly go from paying nothing to have your kids cared for all day to paying a whole lot of money. Many parents may not have much choice but to find summertime childcare.

If this is the boat you’re in, here are a few ways to find a summer camp for your kid and options that may make it more affordable.

1. Check Online for Summer Camp Options

These days most states and major metropolitan areas have parent blogs or magazines devoted to the local area. In my local Indianapolis, for instance, we have Indy’s Child magazine and IndywithKids.com. Both feature a listing of local summer camp options.

Chances are you can find something similar for your area. If you can’t, there are national resources, too. The American Camp Association has a database for finding day and overnight camps in your area. It leans towards ACA accredited camps, though it will list some not accredited. When I ran it for our area, it turned up some but not all the options I know are available. Still, it could be a place to begin your search for a summer camp.

2. Choose a Less Expensive ‘Base Camp’ Option

One thing that makes summer camp expensive is the specialized options. I’ve seen sports camp, Lego camp, technology camp, horse camp and more. If your kid goes to these specialty camps for the summer, you’ll undoubtedly spend more money.

However, many local YMCAs, schools, daycares, churches and city parks programs offer more traditional summer camps. Our daughter’s daycare, for instance, offers a school-aged summer camp program where they hang out at the daycare for much of the day, but also take trips to local parks, libraries and pools. It’s nothing spectacular, but it’s safe, fun, affordable childcare.

If you can find an option like this, build your summer around it. Then you can splurge on a week or two of more expensive specialty camps for your kid.

Where do you find these less expensive options? Check out the following:

  • YMCA: The Y runs summer camps all over the U.S., and sometimes offers a sliding scale fee to make things more affordable. While they offer more expensive specialty camps, most local Y’s also offer traditional day camp options.
  • Churches and religious centers: Many churches and religious community centers offer summer-long day camp options that are quite affordable.
  • Schools: Local schools with before- and after-care programs may transition those into affordable summer camps with fun activities for kids.
  • Parks and recreation: City and county parks and rec departments also run summer camps, and these tend to be more affordable than other options.
  • Boy Scouts and Girl Scouts: If your child is a scout, look into their summer camp options. These are often overnight options, but they tend to be very affordable.
  • Local businesses: Sometimes local businesses offer summer camp-like programs that are for mentoring older kids who may want to become entrepreneurs. These camps may be based on an application process, so be on the lookout well ahead of time.
  • Local colleges: Often local colleges and universities provide camps as a way to get their own students teaching, leadership and coaching experience.

3. Consider a Nanny Camp

Can’t find any affordable summer camp options in your area? Consider putting together a “nanny camp” with friends or neighbors. This is basically a summer-long nanny sharing program.

You’ll hire a nanny to take care of a reasonable number of kids — say four or five — and the nanny can do some summer-camp activities, like going to local parks and pools. This works best if the kids in the nanny camp are around the same age, and if you can provide the nanny with a safe way to get the kids around town.

4. Ask for Assistance

If you can’t afford even the least expensive camp option on your list, ask for financial assistance. Many summer camps offer scholarships for enrollment fees. Sometimes the information about these options isn’t easy to find, so ask about it. Even if you feel like you make too much money to qualify, it doesn’t hurt to ask.

You should also check for discounts. Some camps offer early registration discounts, and others will give you a reduced rate if you pay for the whole season at once. Tons of summer camps also have sibling discount options, which is why it often makes sense to enroll your kids in the same summer camp.

Making summer camp fit into your family’s budget can be tough, especially if you’re not already used to paying for full-time childcare. But there are plenty of excellent, affordable options out there if you just know where and how to look.

Cards for Camp?

You may be tempted to apply for a credit card to earn rewards for your summer expenses. If you do, be sure to check the terms and conditions so you know what you’re getting into. Also, make sure to check your credit to make sure you’ll qualify. You can check two of your scores on Credit.com.

Image: SolStock

The post How to Make Summer Camp Fit Your Family’s Budget appeared first on Credit.com.

How to Prepare Your Budget for Buying Your First Home

You're going to need more than just a down payment.

With the beginning of spring and more interest-rate hikes coming up, a lot of people are wondering if it’s time to make the jump from renter to homeowner. Of course, making such a move involves much more than browsing real estate listings and cobbling together enough for a down payment.

One of the most important things a first-time homebuyer can do is prepare their budget for this big financial event. We asked our partners and money-savers extraordinaire at Clark.com to share some of their best budgeting tips for people looking to buy a home this year. Here are Clark.com Managing Editor Alex Sadler’s responses, edited for length.

What Tweaks Should People Make to Their Budgets in Preparation for Buying a Home?

First of all, there’s a whole lot more that goes into buying a home than many people realize. I’m actually going through the process right now, and believe me, it ain’t like walking into a leasing office and signing up for an apartment.

When you’re preparing your finances for buying a house, here are a few steps you need to take first.

  • Get your credit in shape: The higher your credit score, the better deal you’ll get on a mortgage. The goal is to get approved for the lowest interest rate possible, so before you apply, make sure your credit is in good shape. [Editor’s note: If you’re not sure where your credit stands, we’ve got you covered. You can get your free credit report snapshot on Credit.com, and it’s updated every 14 days.]
  • Have enough saved for a down payment – and then some: A good amount to shoot for is 20% of the purchase price. If you put down less money, you still may be able to get a loan, but it’ll come with higher monthly payments. Plus, typically when you put down any less than 20%, you’ll need to have private mortgage insurance, which is another monthly bill to prepare for.
  • Prepare for other upfront costs: Home inspection (a few hundred dollars), closing costs (estimate between 2% to 5% of purchase price) and extra cash. Some lenders may require you to have some cash in the bank after the purchase is complete, maybe two to six months’ worth of mortgage payments.

In terms of your monthly budget once you’re in the house, a good rule of thumb is to spend no more than 25% of your income on housing – including mortgage payments, private mortgage insurance (PMI, if you need it), property taxes, homeowners insurance — all the monthly bills specifically tied to the house.

What Are Things Renters Don’t Have to Budget for but Homeowners Do?

Buying a house is exciting, but you need to go ahead and prepare yourself for unexpected expenses — that’s just the reality of owning a home. No more calling the landlord or leasing office to come fix something. Whether it’s a broken light bulb or a busted HVAC, the cost of that repair is coming out your pocket. Basically, you should overestimate how much money you’ll need to cover all of your expenses each month.

Give yourself a cushion to fall back on — cash savings you can dip into to pay for an unexpected repair or to cover your bills in case you lose your job or can’t work for a period of time for whatever reason.

A few other costs that come with owning a home: property taxes, homeowners insurance, disaster insurance required for homes in certain areas, higher bills (utilities, heating, air conditioning), maintenance — any and everything is your responsibility.

The bigger the house, the more expensive every single bill will be. Keeping up with regular maintenance is crucial in order to avoid bigger, more expensive repairs down the road

What Are Tips for Transitioning Your Budget From That of a Renter’s to a Homeowner’s?

Come up with a monthly budget to cover all of your expenses as a homeowner, and start living on that amount now. It will force you to save the money that you won’t have the luxury of spending once you own that house. Send it directly into savings so you don’t give yourself a chance to spend it.

How Can Homebuyers Make Sure They’re Not Biting Off More Than They Can Chew?

Just because you can qualify for a bigger house doesn’t mean you should buy one. The financial risks are extremely serious.

No one plans for unexpected setbacks like job loss, emergencies, medical issues — and if you aren’t prepared financially, one big unexpected event can be devastating not only to your short-term financial health but also your long-term finances. If you can’t pay the mortgage payments, the lender is coming after your house. If you have nothing to save each month, you’re giving up retirement savings and everything else that comes with being financially independent.

Bottom line: Buy less house than you can afford. And even on a less serious scale, you don’t want to live in a house that you can’t afford to furnish, or you can’t afford to take vacations because you have nothing left to spend or save each month.

Image: Geber86

The post How to Prepare Your Budget for Buying Your First Home appeared first on Credit.com.