The 10 Financial Products and Services with the Most Consumer Complaints

Woman receives a bank/credit card statement. Looks suprised.
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Which financial product or service do people complain about the most? Is it credit cards? Auto loans? Mortgages? Student loans? Debt collection? The answer lies with the Consumer Financial Protection Bureau (CFPB).  

Each month, more than 25,000 people contact the CFPB for help regarding financial products or services. Because the CFPB is a federal agency charged with “protecting consumers in the financial marketplace,” it has received over 1,242,800 complaints (as of mid-2017) regarding a variety of financial products and services.

Thanks to the CFPB and its detailed reporting, you can see the 10 financial products and services that frustrate everyday consumers the most.

#1 Financial product or service with the most complaints: debt collection

Total complaints for debt collection

  • 2016: 87,927
  • 2015: 85,058
  • 2014: 88,277

#2 Financial product or service with the most complaints: credit reporting

Total complaints for credit reporting

  • 2016: 53,923
  • 2015: 54,918
  • 2014: 44,663

#3 Financial product or service with the most complaints: mortgages

Total complaints for mortgages

  • 2016: 51,132
  • 2015: 50,728
  • 2014: 51,105

#4 Financial product or service with the most complaints: bank accounts or services

Total complaints for bank accounts or services

  • 2016: 28,382
  • 2015: 22,370
  • 2014: 21,226

#5 Financial product or service with the most complaints: credit cards

Total complaints for credit cards

  • 2016: 26,583
  • 2015: 22,176
  • 2014: 18,552

#6 Financial product or service with the most complaints: consumer loans

Total complaints for consumer loans

  • 2016: 16,364
  • 2015: 13,507
  • 2014: 9,570

#7 Financial product or service with the most complaints: student loans

Total complaints for student loans

  • 2016: 12,329
  • 2015: 7,259
  • 2014: 6,781

#8 Financial product or service with the most complaints: payday loans

Total complaints for payday loans

  • 2016: 4,416
  • 2015: 5,510
  • 2014: 5,598

#9 Financial product or service with the most complaints: prepaid cards

Total complaints for prepaid cards

  • 2016: 2,500
  • 2015: 3,031
  • 2014: 823

#10 Financial product or service with the most complaints: money transfers

Total complaints for money transfers

  • 2016: 2,341
  • 2015: 2,351
  • 2014: 1,891

Have a problem with a financial product or service? You can always submit a complaint.

Image: pawel.gaul

The post The 10 Financial Products and Services with the Most Consumer Complaints appeared first on Credit.com.

10 Cities Where Your Paycheck Goes the Furthest

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Many people dream of living in New York or Los Angeles—rubbing shoulders with celebrities and Instagramming food from the hottest restaurants. They dream of flashy jobs and fat paychecks.

That is, until they scroll through Craigslist or Zillow and determine they could never afford a fourth-floor walk-up above a noisy bar, let alone afford to buy a house in such an expensive city.

If “they” is really “you,” you might want to consider a midsize city where your paycheck will go the furthest.

10 Cities with Excellent Cost-of-Living Ratios

For this list, we turned to a recent report by Glassdoor, which looked at salaries and housing costs for the 50 most populated metro areas across the US.

With that data, Glassdoor determined each city’s cost-of-living ratio—the median annual base salary divided by the median home value.

The results show that where you live and how much you make are directly related.

“Though there are certainly other financial factors to consider when taking into account total cost of living, this data reinforces that pay typically goes further in [midsize] cities versus big metropolitan areas, where there is often tighter competition for housing,” said Dr. Andrew Chamberlain, Glassdoor’s chief economist.

It probably won’t surprise you that New York City, Boston, and San Francisco fared poorly, with ratios of 18%, 17%, and 11%, respectively. Some of the winners might surprise you, though. Here are the 10 cities where your paycheck will go the furthest.

10. Louisville, Kentucky

  • Cost-of-Living Ratio: 39%
  • Median Base Salary: $54,000
  • Median Home Value: $137,500

When most people think of Louisville, they think of big hats and baseball bats. But this city has a lot more going for it—not least of all is its southern charm.

UPS employs more than 20,000 people here, and the city has become a major center for the health care and medical sciences industries—both of which are growing fields with good pay.

9. Kansas City, Missouri

  • Cost-of-Living Ratio: 39%
  • Median Base Salary: $58,000
  • Median Home Value: $147,500

Kansas City has the most expensive homes on the list and the second-highest salaries. You’ll find friendly people and a lot of love for the local baseball team here.

Jobs are available in health care, education, and government, and companies such as Garmin, Hallmark, and Sprint have headquarters in the larger Kansas City metro area.

8. Birmingham, Alabama

  • Cost-of-Living Ratio: 40%
  • Median Base Salary: $50,800
  • Median Home Value: $128,000

If you love barbecue, you’ll love Alabama. And Birmingham offers excellent restaurants, easy access to the outdoors, and passionate college football fans.

Its biggest industries are banking and insurance, health care, and logistics and transportation. Major employers include the University of Alabama at Birmingham, Regions Financial Corporation, Honda, and Mercedes-Benz.

7. Cincinnati, Ohio

  • Cost-of-Living Ratio: 40%
  • Median Base Salary: $57,179
  • Median Home Value: $143,400

Even though I’m a Michigan grad and therefore not supposed to like Ohio, I have a soft spot for Cincy. My favorite activity is wandering the scenic riverfront park and then having a picnic while I watch the boats sail past.

Procter & Gamble, the University of Cincinnati, and Kroger are major employers here.

6. St. Louis, Missouri

  • Cost-of-Living Ratio: 40%
  • Median Base Salary: $56,896
  • Median Home Value: $141,900

How aren’t more people flocking to St. Louis? This city’s got it going on.

Thanks to its large student population, it has a bumping nightlife and lots of nice cafes. Another highlight is the City Museum, which is basically a jungle gym for adults and kids.

Big industries include biotech and health care, and Boeing employs more than 15,000 people in the area.

5. Indianapolis, Indiana

  • Cost-of-Living Ratio: 43%
  • Median Base Salary: $56,000
  • Median Home Value: $130,200

My friend’s dad—a well-traveled person—calls Indianapolis his favorite city. Although I’ll never fully understand that, I can see why it’s appealing.

I lived in this affordable city during middle school, and it offers midwestern values, a healthy population of young people, quality sports teams, and a convenient location in the heart of the country.

Its major industries include health care, education, finance, and tourism.

4. Cleveland, Ohio

  • Cost-of-Living Ratio: 44%
  • Median Base Salary: $55,000
  • Median Home Value: $125,500

Downtown Cleveland is cool—and not just because it’s home to the Rock & Roll Hall of Fame. There’s a fun and active culture about the city, as evidenced by the many restaurants on the walkable East 4th Street.

Cleveland’s major industries are advanced manufacturing and health care.

3. Pittsburgh, Pennsylvania

  • Cost-of-Living Ratio: 45%
  • Median Base Salary: $56,896
  • Median Home Value: $126,700

With American Eagle, GNC, and Dick’s Sporting Goods headquartered in the area, in addition to several manufacturing and steel companies, incomes are good in Pittsburgh.

So if you want to be in the Northeast and close to major cities such as Philadelphia, New York, Boston, and Washington, DC, Pittsburgh makes an excellent home base.

2. Memphis, Tennessee

  • Cost-of-Living Ratio: 46%
  • Median Base Salary: $52,000
  • Median Home Value: $112,100

The birthplace of rock ’n’ roll has a lot going for it: a vibrant culture, mild winters, and excellent southern cooking. With a median home value of just over $110K—the lowest on this list—it’s clear you can get a lot for your money here.

Major employers include FedEx, International Paper, AutoZone, and St. Jude’s Children’s Research Hospital.

1. Detroit, Michigan

  • Cost-of-Living Ratio: 50%
  • Median Base Salary: $61,500
  • Median Home Value: $123,100

Detroit is on the upswing. I went to college nearby, and I know many people who moved back and are passionate about the city’s growth and success.

Quicken Loans and General Motors have headquarters here, and other major industries with employment potential include health care, finance, and government.

How Major Expenses and Income Affect the Cost of Living

Although I’ve written before about the most affordable cities in the US, Glassdoor’s report provides a new angle on the issue by including income—because the combination of low-cost homes and decent incomes makes a compelling argument for midsize cities. Even if you take steps to drastically reduce your cost-of-living expenses, that pairing is hard to beat.

Still not convinced? The numbers might change your mind.

Let’s say you lived in San Francisco, where the median home value is $806,600, and saved 10% of your $88,000 median base salary. It would take you over 18 years to save a 20% down payment. If you lived in Detroit and saved 10% of your $61,500 income, it would take you only four to save for a 20% down payment on a $123,100 house. So the next time a flashy city calls, think about that.

If you’re ready to pack up and move to one of these affordable cities, it’s a good idea to check out mortgage loan offerings in the area first. Affordable housing is great, but it’s even better when paired with a loan that has a competitive APR. Check out Credit.com’s Mortgage Loan Center to learn more about available loan offerings.

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5 Gig Economy Websites That Help You Make More Money

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In the United States, the way people work is dramatically changing.

The proliferation of the gig economy is shifting the American worker’s view of nine-to-five employment and creating endless possibilities for earning extra cash to help pay the bills and make ends meet.

According to a recent analysis of gig economy and workforce data conducted by Nation 1099, about one-third of all US workers did at least some freelance work last year. What’s more, about 11% of all workers are full-time freelancers and about 22% have embraced side hustling or moonlighting.

Giant gig economy platforms such as Fiverr and Upwork may be well known, but there are quite literally hundreds of similar sites, with more popping up every day. A growing number of these sites specialize in offering niche services—ranging from voiceover work to dog walking, engineering, financial consulting, and website development.

“When it comes to freelancing and the gig economy, all signals show it’s growing even larger,” said trends expert and public speaker Daniel Levine, founding director of Avant-Guide Institute. “What’s so great about these sites is they’re bringing together people from around the world. Borders are disappearing. Before you had to be in the same country for an employee and employer to meet.”

Here are five gig economy sites that can help you earn a few extra dollars or provide a springboard to a full-time freelance career.

1. Rover.com

Phoenix resident Melanie Lewis works at home while she pursues a career in writing. About two years ago, she searched for a way to supplement her writing income and a friend helped her find Rover.com.

Through the site, she makes anywhere from $500 to $1,000 extra each month, by either boarding dogs or offering dog-walking and drop-in services.

“One of my favorite things about Rover is that you set your own rates for the services you offer, so you control what you charge and how much you earn,” said Lewis.

The site, which operates in dozens of cities across the US and Canada, connects dog owners with a variety of services—dog walking, doggy day care, dog boarding, drop-in visits, and house sitting. Note that background checks are required for those seeking to work through the site.

2. Fiverr

Launched in 2010, Fiverr has become one of the gig economy giants. The site has tens of thousands of users who generate steady secondary incomes by offering creative and professional services—everything from graphic design to writing, translation, illustration, and marketing.

Fiverr’s global community of freelancers now includes more than 100 service categories and people doing business in 190 countries.

The site is named Fiverr because the starting price for services is a mere $5, but that’s just a starting point. Advanced sellers can augment their services, charging more money for additional tasks. For example, a copyeditor might charge $5 for editing, but add higher fees for formatting, layout, or rush turnaround.

In addition, the site just introduced FiverrPro, a higher-end initiative that matches curated, talented professionals with those seeking services.

3. Upwork

Previously known as Elance-oDesk, Upwork enables businesses and independent professionals from around the globe to connect and collaborate. It’s another giant in the gig economy. The range of work available through the site is mind boggling—everything from web, mobile, and software development to writing, administrative support, customer service, sales and marketing, and accounting and consulting.

Hourly and fixed-price jobs are available through Upwork. And the beauty of the site is that Upwork processes all payments and invoicing, eliminating the hassle of chasing down clients to get paid through a third-party platform. For hourly jobs, Upwork even offers payment protection, ensuring you don’t get stiffed for any work completed.

4. Babierge

If you have piles of baby gear and toddler toys sitting unused around the house, Babierge is made for you.

Babierge (a combination of baby and concierge) is a sharing economy platform for baby gear. Think of it as the Airbnb for baby gear. The site’s baby gear entrepreneurs rent, deliver, and set up baby gear, games, and toys at hotels and vacation rentals, and then return to pick it up on departure day.

Though you may not have heard of Babierge, don’t underestimate it. It has workers in 82 markets, with new locations added each week.

“When you look at the money you can make at Babierge based on the hours you put in, the pay is about $40 per hour,” said Trish McDermott, vice president of community and communications for Babierge. “Not bad for gig work.”

Some of the site’s most active workers make as much as $700 per month.

5. Efynch

One last up-and-coming site worth noting is Efynch, a platform designed to connect professional and freelance contractors and maintenance workers with jobs.

Operating in Washington, DC, Baltimore, and northern Virginia, Efynch currently has about 3,000 users and plans to expand to at least ten more cities on the East Coast by spring.

“In addition to skilled workers, anyone with a truck is basically a valuable commodity and can easily make $50 or more per hour on our site,” said cofounder Teris Pantazes. “I’ve had some people make more than $5,000 per month on my site as full-timers. Freelance or side workers probably average between $500 and $1,000 if they work a few evenings or a couple Saturdays.”

Modeled after Upwork but tailored to the contractor and maintenance crowd, the site offers a range of gigs, from simple manual labor tasks such as mowing a lawn to far more complex jobs such as carpentry.

Anyone can join the freelance movement. It just takes a little paperwork and planning. If the lifestyle speaks to you, you should fill out a 1099 and be ready to navigate the financial ins and outs of self-employment. Start by getting your free credit report and gain insights into how you can build your credit while you freelance. Embrace the hustle while maintaining a handle on your finances, and you’ll be set up for success.

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3 Common Alternative Investments: Are They Worth It?

Get your stocks and bonds on.

Whether you’re a novice at investing or have been day-trading your own stocks for years, you’ve probably heard about alternative investments. You might even be curious about whether or not they’re worth buying. If you want to be a savvy investor, you need to learn about alternative investments.

Alternative investments are anything that doesn’t fall under the category of stocks or bonds, says Molly Stanifer, CFP, a financial adviser with Old Peak Finance. This includes anything from gold and real estate to curios and collectibles. Fun though it might be to start buying up real estate in the name of your portfolio, the question remains: is it worth it?

Stanifer walks us through three common alternative investments to explain a little bit more about whether or not you might want to buy them.

1. The Investment: Gold

The Rundown: A few years back it seemed like every red-blooded American was running out to buy gold, and Stanifer even saw this within her own realm of work. “In 2008–2009 when I was working at a retail brokerage company, I heard a lot of interest in gold,” she said. “A very small minority of clients were investing heavily in it—often indirectly with a fund that invested in futures contracts—but gold was certainly something people liked to talk about.”

Is It Worth It: Stanifer says she’s a big believer in diversification and owning everything in the broad market; however, your investment in any commodity, including gold, should never equal more than 3% of your portfolio. “If you choose to own more than 3%, you are communicating that you value gold higher than the broader market does,” she says. When it comes to gold, it’s ultimately best to think of it this way: gold is only a small fraction of precious metals, precious metals are a small fraction of commodities, commodities are a fraction of alternative investments, and alternative investments should be a small fraction (if any part at all) of a diversified portfolio.

2. The Investment: Real Estate 

The Rundown: In the past few years, Stanifer has heard more and more buzz when it comes to purchasing real estate as part of a diversified portfolio. This attraction makes sense, given the explosion in popularity of house fixer-upper shows and how fun and quasi-easy they make the whole process appear.

Is It Worth It: If you’re thinking about using real estate as a way to diversify, you may want to think again. Stanifer says that most investors have enough exposure already if they own one home. “Most people that own a house will already have more real estate exposure than the broad global market,” she says. Keep in mind also that there are a lot of additional expenses that come with real estate, like repairs, maintenance, utilities, and taxes, all of which may decrease the overall value of your investment opportunity.

3. The Investment: Curios

The Rundown: Most collectibles will probably not react to price in the same way or at the same time as stocks and bonds, which adds diversification to a portfolio. “But accessibility and liquidity should also be considered,” Stanifer adds. “Stamps and other collectibles are not traded as often as stocks and bonds, and when things are traded more often, there is less variation in price. As far as accessibility goes, once a rare object is discovered, there could be additional costs to get it and store it.” 

Is It Worth It: If you get enjoyment out of collecting things like stamps and coins, then the investment may be worth it to you. Keep in mind, however, that barriers and small market demand make collectibles an inappropriate investment staple, says Stanifer. In other words, if you like collecting for the hobby of it or if you expect to hand these items down to kids and grandkids, go for it—but you shouldn’t expect to get rich off your stamp collection.

Ultimately, your investments are your choice. But whatever you choose to back, make sure you’re investing in your future. Diversify your portfolio, use credit cards intelligently to build your credit and increase your buying power, and regularly check your credit report.

Image: POMPIXs 

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How to Raise a Kid You Won’t Have to Cut Off in 20 Years

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Today’s young people are more likely than previous generations to live with their parents, according to a 2017 analysis from the Pew Research Center. In 2016, 15 percent of 25- to 35-year-olds lived in their parents’ home, compared to 10 percent of Gen Xers in 2000.

Even when kids move out, it’s not uncommon for them to receive financial support from their parents. In fact, 62 percent of Americans age 50 and older gave a relative money in the last five years, with the largest sums often going to adult children, according to a 2017 Merrill Lynch retirement study.

Parents may not find those statistics encouraging, but the good news is there are ways to teach kids how to be financially responsible, and it involves raising the bar by asking kids to do more in the way of financial responsibilities. Studies have shown that when more is expected of a child (or anyone), they actually perform to that level of expectation. The same can be said of how they deal with money.

Don Roork, a Certified Financial Planner at AssetDynamics Wealth Management, has noticed a pattern with kids, adults and money. “Kids learn good money habits from just watching and being around their parents,” says Roork.

Roork also points out that money lessons aren’t always explicit verbal lectures on finance. “Kids watch mom and dad making good financial decisions, and voilà — the kids’ money behavior matches their parents’,” says Roork.

So when it comes to raising financially independent adults, it becomes clear that it’s important to start when they are kids. Here are some ways personal finance experts recommend easing your children — gently and kindly — into financial adulthood by weaning them from the family wallet.

Set expectations

As soon as your child begins asking for things like toys, restaurant meals or trips to the movie theater, they are ready to learn about the money it takes to support these wants. When a child expresses a desire for something beyond the basics, start the conversation then and there about how they’ll soon be responsible for these “luxury items.”

Of course, you don’t have to start charging them rent (not a bad idea, though), but you will want to follow up your expectations with actions.

For example, if your family goes out to eat, your child can pay for their meal or contribute to a portion of the bill. These expenses can be age appropriate and should increase over time as your child earns more money. They can start with things like snacks at the movies and move up to cellphone bills and car insurance.

Financial adviser Jamie Pomeroy of Financial Gusto says this should all start with communication: “Sitting down with your child and having a clear and frank conversation about who’s paying for what, can pay huge dividends.”

Another good exercise would be to show them prices on things they’ll need as adults, like a home or a car. Molding their expectations around what it takes to live will only help them down the road.

To drive this point home, Pomeroy suggests laying out a real plan designed to increase financial responsibility. “Make sure that you and your child are on the same page about what expenses they are responsible for, what you’ll continue to pay for (for now), and then introduce them to a budget to help them manage those expenses,” he says.

Create a reward system

Get-out-of-debt guru Dave Ramsey warns against giving kids an allowance and instead recommends that money given to a child should be tied to actions, like completing chores or other household projects. The idea is to get kids ready for the real world by emulating it with a system of compensation tied to work.

CFP Jeff Rose of Good Financial Cents says, “One of the first steps in teaching your kids financial independence is giving them responsibilities around the home that are both paid and unpaid.”

Ramsey is also a proponent of giving children the opportunity to earn more money in “commissions” when they find extra things to do or take initiative in solving problems around the house.

Teach them personal finance

Many kids are shocked when they get into the real world and finally begin grasping the finite nature of money. Mom and Dad spring for everything, so why would money ever run out?

Clint Haynes, CFP of NextGen Wealth, says there’s a fix for this. “Make it a point to sit down with your kids and show them what your budget looks like, how it works, and why it truly is the foundation to personal finance,” he says.

When your child asks for candy at the store, don’t deflect them with, “We don’t have the money.” Instead, let them know that the money you have available isn’t earmarked for candy, showing them how a budget works in real life.

Other lessons you can teach early on include those around saving, compound interest and even giving.

Brian Hanks, a CFP out of Idaho, has an experiment he urges his clients to conduct with their children once they are high school seniors. He suggests parents hand over their checkbook and have their kid cover all the family’s expenses for the entire school year.

“Paying a family’s bills is eye-opening, and your teen starts to develop new money habits,” Hanks says.

Let them earn real money

You can start by giving your kids an allowance that is tied to performance: completing chores, excelling in school, and having a good attitude can factor into their “compensation.” Be sure to enforce the association between what they do and how they are compensated. Once they can work legally, you can taper off their allowance.

Ed Snyder, CFP at Oaktree Financial Advisors, says children who have jobs will be more thoughtful about their spending and better with money in general. “Working will help them think through their spending and hopefully be more responsible,” he says.

Keep in mind kids don’t always have to wait until they are 16 to get a job. They can start a business or participate in gigs that allow kids under 16 to work with a permit, like modeling or acting.

Challenge them

Not only should your kids be responsible for expenses and make their own money, Eric Jansen of AspenCross Wealth Management says kids should be challenged in their money habits.

“Set up 90-day savings and spending challenges as a fun way to help them better understand and manage the trade-offs between spending money on what they want and what they need,” Jansen says.

No-spend or savings challenges are great ways to teach lessons about money while showing your child what they are capable of if they focus on their goals.

You can even create competitions among siblings, like seeing who can save the most money.

Trust the process

Sound like a lot of work? It is! Financial independence doesn’t happen overnight.

“Some of these [money] lessons may click sooner in some kids than in others — even within the same family,” says Snyder. “Don’t give up hope. … Just keep showing them good examples and teaching them good old-fashioned financial lessons.”

Be patient, be kind, and be confident that the lessons you are teaching them will serve them well into adulthood.

The post How to Raise a Kid You Won’t Have to Cut Off in 20 Years appeared first on MagnifyMoney.

6 Surprising Travel Expenses to Watch Out For

Here's how to get the most out of your next getaway.

I love to travel. From the Blue Lagoon in Iceland to the Great Barrier Reef in Australia and the Colosseum in Rome, there’s no adventure I would turn down. In the past, I’ve mostly been able to travel by saving up for trips and finding good deals online. But even with all the planning and research that has gone into my excursions, I have often been surprised by certain expenses that crop up.

The following are six of the costs that surprised me the first time I encountered them. Be aware of these on your upcoming trips so you can plan for them in advance.

1. Vaccines

A few years ago, my husband and I traveled to South America for six weeks. From the tours we’d take to the places we’d stay and the travel expenses between countries, we had everything planned and accounted for—or so we thought.

While we knew that we’d be required to get certain shots for our trip, we didn’t anticipate that those vaccines wouldn’t be covered by our health insurance and that we would have to pay out of pocket for them. The extra $700 we had to pay really put a dent in our budget. Learn from our mistake and remember to think about what additional health costs might be associated with a trip so you can account for that in your planning as well.

2. Travel Insurance

As I’ve gotten older, I’ve come to see the wisdom in travel insurance more and more. Life can certainly throw you curveballs, and when you’ve plunked down hundreds (or thousands) on a trip, it could be worth the added cost to know that you’re covered. Travel insurance can reimburse your expenses if for some unforeseen reason you can’t actually go on your trip or, worse, if something should happen to you while you’re traveling.

Start by checking with your credit card company to see what coverage is offers (some will cover your nonrefundable flight fees if you have a good reason for not being able to fly, for example), then consider outside insurance as well.

3. Tips

There’s so much more to tipping than you might expect. For starters, not all cultures expect consumers to tip for all types of services. Do a little research ahead of time to determine whether tipping is a custom in the countries you are traveling to, and be prepared with cash if you’ll need it. If you’ll be traveling to a country where tipping is part of the etiquette, then it’s best to think outside the box for this practice as well.

For example, it’s a given that you would tip your waiter and cab driver, but don’t forget about hotel staff, the captain of your ship, the sommelier, or the skycap at the airport

4. Taxes

A little bit of tax here and there on things like souvenirs, food, and drink can add up, but what you should really take into consideration is the additional taxes that come with hotel charges and flights. Even small tax percentages on large price tags can really add up quickly, so it’s best to be prepared for these in your travel budget.

5. Resort Fees

Some resorts and hotels (particularly fancy ones) charge additional fees for certain services—things you might not expect unless you read the fine print. I’ve seen hotels charge for Wi-Fi, newspapers, use of the gym or other recreational facilities, cribs, even extra sheets. The best way to be prepared for this is to make sure you read everything before paying to stay somewhere, and never be afraid to call if you have any additional questions.

6. Foreign Transaction Fees

Most credit and debit cards charge a foreign transaction fee every single time you use your card in another country. These fees typically range from 1% to 3%. If you’ll be traveling internationally, you may want to pick a credit card that doesn’t charge foreign transaction fees.

Watch out for these six tricky travel expenses, and you’ll be better able to stick to your travel budget. And if you’ve worked out your budget but you’re still not sure exactly how you’ll actually pay for things once you’re on your trip, we can help you determine the best ways to pay for your travel expenses, too.

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8 Activities to Plan Now for a Fun and Budget-Friendly Fall Staycation

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Is your kids’ fall break coming up? Plan ahead now to have a great time while also saving money. Over Memorial Day weekend, more Americans traveled than had in the last 12 years, and we spent more on travel, too. If your family spent a lot of money then, you might want to save this fall. Luckily, fall is the perfect time for a family staycation—a vacation where you play tourist in your hometown.

Staycations are great because you can get to know new attractions in your own town, and you don’t have to spend money on accommodations or plane tickets. If you’d like to do fun things as a family without spending a fortune, here are eight staycation ideas to try.

1. Participate in Agritourism

Many sections of the country will be in a harvesting period over fall break. For instance, in my native Indiana, fall break is a great time to pick apples and pumpkins, among other fall-harvested produce.

Check out your state’s agricultural extension to find agritourism destinations in your area. The bonus here is that you often get a fun trip rolled in with a place to eat, which is great!

2. Visit Local Museums and Zoos

Has it been a while since you’ve checked out your local museum or zoo? A staycation is the perfect time to revisit them. You might also try a different type of museum that you’ve never tried before. For instance, some art museum exhibits can be surprisingly kid-friendly.

Or, check online for completely off-the-wall small museums in your area. For instance, my neighborhood has a tiny museum dedicated to Statue of Liberty figurines! These museums can make for a fun experience, even if they are a little cheesy. 

3. Frequent Small Businesses and Restaurants

Have you neglected to check out your area’s local restaurants and small businesses? A fall staycation is a great time to try them out. Local breweries and wineries abound these days, and they often offer kid-friendly menus, as well. You could also visit an area with lots of small businesses. Give your kids a little bit of spending money, and let them go to town.

4. Go Biking or Hiking

Fall is just about the perfect time, in most places, to go biking or hiking. It’s not as hot as summer, and there may be fewer bugs. Check out some new trails and parks on your family vacation. You could even make it a point to check out two or three state parks with your kids during your fall break.

5. Go to the Library

Lots of local libraries offer additional programming during school breaks. Check out your library’s schedule to see what’s going on. Nothing special happening? No worries. Take an afternoon to stock up on books. Then, spend a cozy evening in, drinking hot chocolate and reading aloud as a family.

6. Have a Party

Hosting a party is a great way to get the whole family involved in a big project together. Get everyone to pitch in on making invitations, creating food, and cleaning and decorating your house. Then, have friends and family over for a fun, fall-themed get-together.

7. Make Christmas Gifts 

It’s not too early to start planning for the holidays. Now is a great time to put together handmade holiday gifts. You might try layered jar gifts, such as soup mixes or brownie mixes. Or try making candles, picture frames, or photo gifts. This is a great way to spend time together, while also taking care of some of your holiday planning.

8. Make a Collage 

Chances are you have a smartphone with a decent camera. Spend some time on your staycation driving or walking around your neighborhood, and set the kids loose with that built-in camera. Ask them to find beautiful things to photograph. There’s never a better time for it than fall! At the end of your vacation, print off the photos they’ve taken and create a collage of autumn memories.

If you start planning now, you can save even more money on your fall vacation. The key to saving is recognizing your spending habits. Get a handle on your spending and credit by checking your credit report for free at Credit.com.

Image: istock

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11 Things You Can Do Now to Avoid Holiday Debt

Happy couple in the shopping center

If you were aghast at how much you spent on holiday gifts when the credit card bills arrived last January, now is the time to start thinking about how to avoid a repeat performance. Even though it may feel shockingly early to begin thinking about the holidays, starting now will give you plenty of time to plan, budget, and build a shopping fund so after New Year’s, you’ll hardly have a bill to pay. Below, financial experts share their favorite tips for emerging from the holidays virtually debt-free.

1. Look Back

It’s an ideal time to set a budget for your holiday shopping, but where to begin? Roshni Chowdhry, innovation and product development lead at SafetyNet, recommends looking at your past spending history. “We have a tendency to underestimate how much we will spend on gifts each holiday season,” she says. “Make a list of what you bought last year and note what was necessary and what wasn’t—then eliminate the latter. This will give you a realistic measure of how much you should plan to spend.” 

2. Make a Gift List

Making a list of whom you need to buy for and how much you plan to spend per person is an effective way to stay organized. Justin Lavelle, chief communications officer for background-check service BeenVerified, says, “You can save yourself a lot by shopping from a list. This can prevent impulse buying, and thus, limit overspending.”

Before you finalize the list, Catey Hill, author of The 30-Minute Money Plan for Moms: How to Maximize Your Family Budget in Minimal Time, recommends asking yourself if you’re giving gifts to people you’re no longer connected to. “For people you don’t chat a lot with during the year, consider sending a card rather than a physical gift,” she says.

3. Change It Up

If you can’t get to a comfortable budget with your current list of recipients, Jerry Patterson, senior vice president of retirement at Principal Financial Group, suggests that holding a family gift exchange or white elephant party—instead of buying many individual gifts—can be a fun way for everyone to celebrate and save money. “Set a spending limit that everyone is comfortable with to keep things fair and affordable,” he suggests. 

4. Build a Holiday Fund

Chowdhry advocates for having a specific fund for holiday shopping rather than drawing from any savings you already have. “Withdraw whatever you can afford to stash away each payday, whether it’s $20 or $200,” she advises. “When it comes time to do your shopping, use your saved cash first so you know exactly what you’re spending and can avoid pulling from your more important savings account.” 

5. Turn Pennies into Presents

Patterson suggests saving even more money by saving all your spare change. He says, “At the end of each day, make an effort to throw your extra cash and spare change into a jar. If you start now and commit to regularly adding to the pot, these small contributions can add up before the holiday shopping season begins.”

6. Eliminate Excess Spending

Consumer savings expert Andrea Woroch likes to save by cutting back on extras for a few months. “Review your spending over the past several months and identify areas where you can cut back,” she says. “Whether it’s weekly takeout, weekend spa appointments, or too many morning lattes, there is always room in your budget to cut back and boost your holiday savings.”

She suggests putting that money into a savings program at your bank or local credit union or using a site like SmartyPig.com, a free service that helps you stash cash for any purpose.

7. Play It Smart with Credit Cards

While you’re shopping, Steve Hasbrooke, the VP controller at Mission Federal Credit Union, recommends limiting your spending to one credit card, preferably the card with the lowest interest rate. “This will save you money by paying less interest while you pay off your holiday purchases,” he says.

And try to avoid the lure of opening a new store credit card while you’re out shopping. According to Dana Vas Nunes, senior manager of deposit products at Alliant Credit Union, “Retailers are incentivized to push them during the holiday season, and they often offer perks like a 15% discount if you open a card that day. But that discount can actually come at a steep cost. Most store cards have higher fees/costs than traditional credit card providers; it’s how they offset the discounts.” If you do decide to open a new card, do your research ahead of time and consider one of these recommended store credit cards. 

8. Reap the Rewards

Speaking of credit cards, remember to let your credit cards work for you. Woroch suggests that between social events, back-to-school shopping, and family getaways, you likely racked up quite a few points on your credit card over the summer. “Use those points to offset your holiday spending by turning them into gift cards,” she says. “You can give these cards as gifts or use them to pay for gifts.” 

9. Get Started Now

Giving yourself a few months to shop for holiday gifts allows plenty of time to find the perfect present and the best prices. Hasbrooke says, “If you’re like me, you have probably found yourself scrambling for a last-minute gift. This often leads to spontaneous purchases of items that may not be exactly what you would have chosen if you had more time to consider the purchase. It can also lead to spending more on that item than you budgeted for.”

10. Consider Layaway

Lavelle suggests that layaway can be a helpful tool to spread your spending out over a few months. He explains, “It is a concept from the past, but many stores are bringing it back, especially for toys and household items. The store will keep the item and allow you to make small payments toward the purchase price until you have it paid off.” 

11. Get Creative

Save money on holiday gifts by making some of them yourself, which is something that Certified Financial Consultant Jim Szakacs of Phoenixville, Pennsylvania, recommends. “Consider giving gifts that you’ve made with your own two hands,” he says. “Nothing communicates more personally during the holidays than opening a gift that you know someone has spent time not only thinking about, but actually making for you.”

By following these tips now, you can avoid the shock of those post-holiday bills a few months down the road. Plan ahead to make sure you can enjoy your holidays without financial stress.

Image: Martin Dimitrov

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How to Protect Yourself on Venmo in 5 Minutes

Technology online banking money transfer, e-commerce concept. Happy young woman using smartphone with dollar bills flying away from screen isolated on gray wall office background.

With Venmo being one of the most popular ways to send money, it makes sense to wonder what’s keeping your personal data and digital wallet safe. Venmo has made strides to improve its security in the past two years, but here’s the short answer to how safe Venmo is—protecting yourself comes almost entirely down to you.

How to Keep Your Personal Info Safe on Venmo

It takes only five minutes to make your Venmo account more secure by doing three things.

1. Change the default audience

Venmo sets its default audience to public, which means anyone can see your transactions. Venmo never displays the amount you pay someone, but everything else is fair game. Strangers can see names (both yours and the recipient’s) and payment messages (e.g., “thanks for the b-day dinner”), which can make it easier for someone to impersonate you and request payments from friends or family.

How to: Go to Settings, under the Sharing category (called Privacy & Sharing on iOS) select Default Audience, and change to “Participants Only” (the default setting of Venmo is set to “Public”). If you don’t want to let go of the social aspect of Venmo, at the very least change the default audience to “Friends” so only friends can see your payment details and messages. Not only will changing the default audience setting make you less susceptible to fraudsters, but you won’t have coworkers find out you didn’t invite them out for drinks after work.

2. Turn on alerts and notifications

Venmo has gotten better about notifying users of activity on their accounts, but you may need to tweak a few settings to ensure you’re never in the dark if something happens. For example, by default Venmo will alert you to account activity via email. However, if you’re the type of person who avoids checking your inbox or gets drowned in emails every day, an important Venmo account notification could get lost.

How to: You can turn on text notifications or customize alerts by going to Settings, selecting Alerts and Notifications, and then choosing Push, Text, or Email Notifications. Alerts and notifications are incredibly easy to personalize, so do what works best for you. Setting up the right alerts will help you stay on top of what’s happening on your Venmo account.  

3. Set up a PIN code

Even if you already have a PIN for your phone, you should set up a separate one for Venmo. If someone were to come across your unlocked phone, they could immediately open your Venmo app and mess around with your money. Adding a separate PIN for the Venmo app provides yet another layer of security for you to fall back on should your phone fall into the wrong hands.

How to: Go to Settings and select PIN Code under the security settings (steps may vary on iOS). Follow the instructions to set up a four-digit PIN, and you’re good to go. Now, whenever the Venmo app is opened, it will immediately ask for the PIN.

What Venmo Does to Protect You

To remain compliant with federal banking standards, Venmo uses the same type of data encryption and storage you would expect from an online bank. For many, just knowing that much may provide some comfort. However, though Venmo makes efforts to keep your data secure, it does not offer buyer or seller protection for unauthorized third parties. You may wonder why that is, but it goes back to the purpose of Venmo—it’s a service for sending money to friends and family, not strangers.  

If you want to stay safe on Venmo, simply don’t send money to people you don’t know. Venmo isn’t meant for purchasing Lady Gaga concert tickets from someone you found on Craigslist.  

In the past, Venmo didn’t offer other security features, like two-step authentication, but now two-step authentication is on every Venmo account by default (see image). If you’re unfamiliar with two-step authentication, it’s when you try to log in to an account from an unfamiliar device (computer, smartphone, etc.) and you’re required to enter a passcode sent via text. It’s an awesome security feature, and you should be using it for more than just Venmo.  

One More Thing to Know about Venmo

There is one extra step that will help you stay protected on Venmo, and that is using a credit card instead of a debit card or checking account. Yes, there is a 3% fee on transactions with a credit card, but most credit cards won’t hold you liable if you’re a victim of fraud.

Note: If you lose your phone or it gets stolen, revoke phone access by logging in to Venmo via computer and contact Venmo immediately.

Is Venmo Safe to Use?

The real answer lies with you. If you take five minutes to set up the security settings (create a PIN code, turn on alerts, etc.) and change the default audience—don’t ever set it to “Public”—you’ll make yourself a much harder target for fraud. It’s not a perfect service, but Venmo is much better about its security now, so the rest is up to you.

Image: istock

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Sick of Overdraft Fees? There’s an App for That

Whether you’re building a top-notch gaming PC or itching for the latest smartphone, there are credit cards that can help tech nerds.

Remember when banks feared that new consumer protections would make it harder to charge overdraft fees? That those protections would imperil the financial industry and lead to the death of free checking accounts? Well, overdraft fees set something of a record in 2016, with banks collecting $33.3 billion last year—their highest level since 2009, according to a report by Moebs Services Inc.

So why are overdraft fees on the rise? Jonathan Morduch and Rachel Schneider, in their book “The Financial Diaries: How American Families Cope in a World of Uncertainty,” conclude that much of American financial suffering (and budgeting missteps) are the result of month-to-month cash-flow problems and income volatility.

Fortunately for anyone who has struggled with money management, there’s an app to help with that. In fact, there are several. Here’s a closer look at four cash-flow management apps—and what they can do to help you better manage your monthly money.

1. Dave Warns of Impending Overdrafts

One of the apps making the most noise right now goes by the name Dave. It launched with a bit of fanfare in April, thanks to an investment (and loud endorsement) from billionaire Mark Cuban. While Dave has a feature that works like a cash advance, its main purpose is to warn users before they make a purchase or pay a bill that sends their account into the negative, according to CEO Jason Wilk. The app links to consumers’ checking accounts and watches spending patterns and upcoming automatic payments, then tries to give seven days’ notice of a coming cash crunch.

“We don’t consider ourselves in the same market as other credit products,” Wilk wrote in an email. “First and foremost we are a product that alerts people about their upcoming bills and expenses so they have plenty of time to make a decision about their options. We consider this as much to be a smart budgeting app to avoid a negative balance.”

Consumers pay $1 a month for the app. Dave offers small cash advances (up to around $75, Wilk says) to cover what could have been an overdraft. Dave pays itself back as soon as the checking account has enough money in it. Right now, per-transaction fees are $3.50—the fee the firm pays the bank—and Dave asks only for a donation in the form of a tip. While some have raised concerns that the “tip” could end up being as expensive as payday loan interest, or that consumers who rely on Dave could end up stuck in a payday-loan-like cycle of repeat borrowing, Wilk argues that is unlikely.

“We don’t charge interest and we don’t run credit,” he noted. “We also don’t have a set payback period either, so our customers don’t get caught in a cycle of late fees or interest penalties.”

2. Propel Offers Easy Government Benefit Management

Other apps also try to help consumers understand their month-to-month spending habits. The Common Cents Lab at Duke University recently released a report on an experiment run using an app called Propel, which helps lower-income consumers manage their SNAP benefits. The researchers found that many consumers fall prey to what they call the “windfall” state of mind when a paycheck (or government assistance) arrives, leading them to overspend in the first few days after their money is deposited. By simply measuring out payments on a weekly—rather than a monthly—basis, Propel users stretched their food benefits an extra two days, the researchers said.

“For a family depending on SNAP to put food on the table, this can equal about six extra meals that month, just from this simple intervention,” Common Cents said in the report.

3. Float Provides Small Loans without Hard Credit Inquiries

Float, an app that launched in February of 2017, offers what feels like traditional payday loans—but with a twist. Instead of looking at credit scores, Float links to consumers’ checking accounts and examines spending habits to make lending decisions “without the negative effects of a hard credit inquiry,” the firm’s website says.

Users qualify for something like a small-dollar line of credit they can access with a simple text message like “get $100.” Most loans come with a 5% fee and must be paid back in less than a month. While it’s not the same as Dave’s tip-based fee system, that small transfer fee—and the similarly small late fee of $15—is much less than many payday loan companies charge.

According to Float’s website, the app is available only to residents of California and Utah at the moment.

4. Activehours Grants Easy Payday Insights and Advances

Like Dave, Activehours fronts the money for its users and asks only for tips. It links to hourly workers’ accounts and advances pay they’ve already earned but haven’t yet received in a paycheck. Employees from over 25,000 companies are using it, said spokesperson Kate Austin in an email. The app is designed to help cash-poor consumers get access to money they’ve earned more quickly. The only fee is a voluntary “tip.”

“We’re actually not a loan at all,” Austin said. “We believe people should be given access to the money they earn as they earn it. So, we created an app that lets people see how much they have in their bank account as well as what they’ve earned but haven’t yet been paid for,” she said. “Then, if they need access to their earnings, they can use the Activehours app to move it immediately to their checking account.” She stressed that users always have the option to pay nothing for the paycheck advance—certainly a better option than some payday advance products offered by banks and non-bank lenders.

Fighting the Ongoing Cash-Flow Problem

None of these apps solve the fundamental problem facing consumers who might be tempted to use them: not enough income to escape the “just make it to the end of the month” cycle. Any cash-infusion tool is just a stop-gap solution. It might work once or twice a year—and “The Financial Diaries” suggests some consumers could benefit from such occasional cash-crunch help—but payday borrowers often find they can’t repay their loans when payday arrives. Back in 2014, the Consumer Financial Protection Bureau found that four out of five payday borrowers rolled their loans over at least once, and over one-fifth of the loans were renewed six times.

Users of any cash-flow stop-gap solution face the same issue: borrowing money just in time to make this month’s rent isn’t going to solve the problem of next month’s rent.

Consumers intrigued by the balance-monitoring features of apps like Dave might find similar tools offered directly by banks or by services like Mint.com. And while it may not be the long-term solution some may desperately need, anything that provides alternatives to triple-digit payday loans is probably a welcome addition to the marketplace.

Worried about Overdrafts? Do This Right Now

You can take more direct steps to avoid overdraft fees at your bank. Most banks allow you to link savings accounts or credit cards (from the same institution) to your checking account, which provides you with an extra layer of backup in the event of an overdraft. There is usually a fee to use it, but it’s far less than overdraft fees or bounced check fees.

Finally, make sure you opt out of your bank’s overdraft protection, a service that will cover transactions you don’t have the money for—at the cost of a $20+ fee. Even if you think you are opted-out, it’s worth double-checking. This prevents only certain kinds of overdrafts, such as withdrawing more cash at an ATM than is available in your balance. You can still “go negative” if you write a too-large check, for example, but reducing the ways you can accidentally overdraft (and get hit with hefty overdraft charges) is always a good idea.

If you’ve taken all of the above steps and are still having trouble managing income flow, it might be time to consider applying for a credit card. Before you settle on a card, though, it’s wise to check your credit report first—which you can do for free at Credit.com—so you can find a card that matches your credit rating.

Image: Peopleimages

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