What Should Your Teen Do With Their Summer Earnings

Source: iStock

According to a 2017 survey released by the National Financial Educators Council, 54% of respondents (all 18 years and older) said a course in money management in high school would benefit their lives. Another survey — the most recent from the Program for International Student Assessment — reports that only about 10% of U.S. 15-year-olds are proficient in personal finance matters, falling in the middle among the 15 countries studied. The message is clear: Young Americans need to learn more about money and managing it wisely. One way to start them off is giving them hands-on experience with their own money. Enter the summer job.

Having a summer job can be a good introduction to adulthood for many reasons: The discipline, submission to management, team work, and a regular paycheck are just a few of the things a teenager will get used to with their first summer job.

It’s also a good way to introduce kids to the real world of money. Though the money your teen earns is technically theirs, as a parent, you should use summer job earnings as an opportunity to help your kids form good habits with money. There’s no better time to show them the value of money than in the crucial years before they’ll be saddled with obligations like student loans, car notes, and mortgages.

Here are a few ways to make sure your teen will get the most out of their money-making experience that will keep them money savvy for years to come.

Pay their fair share

Once your teen begins making money, you’ll to want consider how they can begin to cover certain expenses. You’ll be tempted, no doubt, to let your teen keep their hard-earned money for themselves. Trust this process. If the goal is to raise money-smart kids who become even savvier adults, there will have to be simulations of the real world that include actually paying for things

If your teen uses the car, consider having them cover a portion or all of their car insurance bill. Another option is to have them contribute to their cellphone bill or even some of the Wi-Fi they use.

Having expenses is a real part of life, so it’s better to help them understand that now rather than later when ignorance isn’t so blissful.

If the thought of making your child pay for expenses bothers you, consider a different approach: Teach them about the costs of everyday life by asking them to cover their portion of a bill, but take that money and put it away for them. You can save up all that money and, as a nice gesture, give it to them when they need it most, like when they go away to college or finally leave the nest to launch out into the real world.

Open bank accounts

Source: iStock

While many families do not have access to or elect not to participate in the traditional banking system — it’s estimated that 27% of U.S. households are unbanked or underbanked — you’d ideally want to get your teen familiar with banks and how they work. Though check use has been on the decline since the mid-1990s, it’s still important for teens to learn how to write a check, along with keeping a checkbook register. Sure, this practice probably won’t last long, as electronic payments and money management apps continue to grow, but this approach gives your kids the gist of how to keep track of their cash flow.

While your teen has a bank account, you’ll also get them used to understanding how a debit card works. They’ll get familiar with how easy it is to swipe for things they want, yet how difficult it can be to replenish their account with the money they’re making at their job.

Finally, you’ll want to make sure that your teen opens a savings account. In most states, a person can open a bank account when they become 18. For younger teens, many banks have special teen or kid accounts that a child can share with their parents. Co-owned checking accounts can be opened as young as 13, while custodial savings accounts can be opened at any age.

Developing good habits around saving and managing money takes time and some getting used to. So using their summer earnings would be a perfect opportunity to get into the groove of budgeting for expenses and managing money through a bank account.

Set money goals

Once money starts to flow into your kid’s hands, seize the moment and get them to see the bigger picture. Summer money is great, but paying for life will take much more than what your teen earns from a few hours of work in a bike shop. Begin to show them the cost of things like college, cars, homes, and luxuries like vacations or hobbies.

Once you compare the costs with their summer job earnings, it should help them come to conclusions about how money works: The more you have, the more you can do. The idea is to inspire them to increase their earning potential with tools like education or savings to invest in income-producing assets.

Another result of these conversations could be your teen realizing they’ll want to start saving up for life sooner than later. They may decide to put away money for the purpose of paying for school or their first condo.

Ron Lieber, New York Times financial columnist and author of the book The Opposite of Spoiled, says parents should prompt their kids with an immediate goal like having a college fund. “The best thing to do is to use any earnings to begin a conversation with parents about college, if your teen plans on going,” Lieber says.

Lieber suggests questions to guide the conversation:

  • How much of your college expenses will be covered by parents versus the child?
  • How much have the parents saved for the child’s college expenses?
  • How much are kids/parents willing to borrow or spend out of their current income?

According to Lieber, “The answers to these questions may cause a teen to save everything, if they think it will help them avoid debt in their effort to attend their dream college.”

No matter how temporary their summer job is, you’d do well to use it as a springboard for more conversations about money. Whatever their long-term money goals are, it’s never a bad idea to start working toward them early on.

Learn compound interest

While your teen is making all of those big money goals, you could drive the point home with a lesson in compound interest. Using a compound interest calculator, you can show your teenager many scenarios where interest can either work for or against them.

Run scenarios around savings for big-ticket items versus financing them. The math will speak volumes:

*Example APRs are used. APR will vary on factors like individual credit score, loan amount, and bank requirements.

In the above scenario, you’d end up paying a total of $226,815 in interest. That same amount ($226,815) invested for 30 years with a moderate 3.5% return yields over $636,000!

Seeing these numbers in action should motivate your teen to start a savings habit that they will maintain throughout adulthood.

If they are really excited about the prospects of compound interest working on their behalf, encourage them to open their own IRA to begin investing themselves. This way, they’ll not only understand the theory of investing but also get hands-on experience with it. After all, the time value of money works even better when you’ve got more time. Investing as a teen could set the stage for copious returns later on in life.

Create a budget

Making money can be the fun, somewhat easy part of a summer job. Figuring out how to spend it can be difficult. Make your teen prioritize needs and wants by learning to create a budget. A good practice would be to have your teen make a list of things they’ll spend money on versus how much money they will bring in. You could also introduce them to a money-management app — here are some of the best ones.

This will help them understand the finite nature of money and how their current cash flow stacks up against their current earnings.

Have fun

According to Brian Hanks, a certified financial planner in Salt Lake City, “Don’t be concerned if your teen ‘blows’ a portion of their earnings on things you consider to be worthless.” Hanks goes on to say that it’s better to make money mistakes as a youngster: “Everyone needs to learn tough money lessons in life, and learning them as a teen when the consequences are relatively small can save bigger heartache down the road.”

A summer job should be fun and low-stress, but it can also be used as a learning experience that prepares your teen for the real world. If your teen turns out to be a terrible budgeter or extreme spendthrift, give them more than a summer to learn better ways. Remember, they’ll have the rest of their lives to continue grasping and mastering money concepts.

The post What Should Your Teen Do With Their Summer Earnings appeared first on MagnifyMoney.

15+ Apps That Help You Make Money

Need extra money? Your mobile device could actually unlock a world of additional income for you. There are many ways to earn money online, and they are now conveniently available on smartphones and tablet devices. Add an internet connection, and you’re set. Pursuing a side hustle can be time consuming, but if you’ve got a financial goal like getting out of debt or saving up for a down payment on a home, these apps could be a good start to boosting to your income. All the apps here are free to use via web browser and/or mobile device.

Surveys

Swagbucks

Devices: Android, iOS

The Swagbucks iOS app. Source: iTunes.

Swagbucks is a popular survey website with a couple of app counterparts (discussed below), including Swagbucks Local and SB Answers. By taking surveys, you accumulate points called Swagbucks, not actual money. These surveys usually ask about your demographics, preferences, and behaviors on topics like cereal you eat, places you shop, TV shows you watch, and other lifestyle choices. Plan to spend 15-30 minutes on each survey, though there are occasionally seven- to 10-minute surveys.

In terms of how the conversions work, one Swagbuck is about 1 cent, and you can redeem them for gift cards to places like Amazon, Starbucks, and popular retailers like Walmart and Target. You even have the option to donate your Swagbucks to more than 10 charities featured on the site.

So, how good are the payouts? A three-minute survey could offer you five Swagbucks or approximately 5 cents. A 20-minute survey pays out 80 cents on average. However, many people earn much more with the Swagbucks referral program: 500 Swagbucks (worth $5) per person once the referral is active. Plus, you’ll get 10% of your referrals’ point earnings over the lifetime of their account.

You have a few options to earn Swagbucks on your mobile device:

Surveys On The Go

Devices: Android, iOS

The Surveys On The Go iOS app. Source: iTunes

Surveys On The Go allows users to take various surveys with pretty decent payouts: You’ll get surveys for between 25 cents and $1. However, be prepared to spend time on these surveys. You can spend 15-20 minutes completing them (or more).

There also aren’t always a lot of surveys available. I’ve logged in a few times and found there were no surveys for me. The survey availability will depend on your demographic and even location. Sometimes, there are high-paying surveys ($15-$20), but it’s hard to tell when and where that will happen.

There’s no way to know how often there will be surveys available, but you can choose to receive app notifications when there is a new survey you qualify for.

Unlike Swagbucks, these surveys offer you actual money. You’ll need to earn $10 before you get a payment via PayPal. A nice thing about this app is that you get a consolation compensation of 10 cents if you start a survey and are not qualified to complete it.

InboxDollars

Devices: Android, iOS

InboxDollars iOS app. Source: iTunes

Much like Surveys On The Go, InboxDollars offers cash rewards. The app also offers “sweep” points, which allow you enter sweepstakes for more sweeps, money, or other prizes.

This app usually has plenty of surveys to take, though they are not all optimized for mobile viewing. At times, the interface can be a little wonky and a tad clunky to navigate.

You should also know that you can get deep into a survey (say, 5-15 minutes) only to be disqualified because of your answers. Your hourly “wage” comes out to be pretty low considering you make anywhere from 20-25 cents per 20-30 minutes spent answering questions. You cannot request a payout from the app until you’ve reached the $30 minimum. A $3 processing fee applies to every payment request. Your payment options include a check, gift card from Target or Kohl’s, or a prepaid Visa card (the latter two options available to Gold members only.)

Other survey apps to explore include Panel App, QuickThoughts, and SurveyMini. Overall, if you are looking to make a living wage from taking surveys, you likely won’t come close. With payouts that amount to just a few cents an hour, you’re better off with other ways to produce extra income (unless there’s absolutely nothing else you can do to earn).

Fitness

What’s better than losing unwanted inches? Getting paid for it. There are a few apps that allow you to convert your fitness activity into financial benefits. As always, you’ll want to consult your physician before starting any fitness program.

DietBet

Devices: Android, iOS

DietBet iOS app. Source: iTunes

DietBet allows you to turn your fitness goals into money. In order to enter a bet, you have to put money up front in a game that pools the money of other people with weight-loss goals. Those who make their goals win the bet and split up the pot (minus DietBet’s 10%-25% fee) that is paid out by those who don’t make their goals. WayBetter, the company behind DietBet, also has a StepBet app that offers similar games where you put down money when you set activity goals and win the bet if you meet them.

On DietBet, you can participate in a short, four-week challenge called a Kickstarter or a six-month game called a Transformer. You can be in multiple bets at a time to maximize your earnings. The company says Kickstarter winners get back an average of 1.5-two times their bet, while the average Transformer winner takes home $325 for winning all six rounds, or $175 for winning just the final round.

DietBet and StepBet have a No Lose Guarantee, which states that if you win, you will not lose money. They’ll forfeit their cut of the pot to make this happen. Of course, if you don’t win, you don’t get anything, so there’s potential to lose money here. The average Kickstarter bet size is $30, and Transformer costs $25 a month (or $125 up front).

Sweatcoin

Devices: Android, iOS

Sweatcoin iOS app. Source: iTunes

The Sweatcoin app converts your outdoor steps into currency called Sweatcoins (SWCs), which you can redeem for products like watches, fitness apparel, and gift cards. Currently, you’ll earn .95 SWCs for every 1,000 steps you complete. The exact conversion of these coins seems to change depending on the reward: Past promotions include a $12 smoothie gift card for 150 SWCs, a $120 Actofit watch for 1,600 SWCs, and a $88 VICI Life gift card for 250 SWCs.

The items available for purchase with Sweatcoins are limited and change often based on availability and the company’s promotional schedule. This app requires access to your GPS data and location in order to verify that your steps are taken outside.

Shopping

There are many apps that reward you for doing something you’d do anyway — shop. Here’s how most of these apps work: If you purchase a product, the app developer usually gets commissions on purchases you make at their suggestion, which they split with you. In this way, they can provide you with rewards that literally pay you for shopping.

Ibotta

Devices: Android, iOS

Ibotta iOS app. Source: iTunes

Ibotta offers rebates for buying certain products in nearby stores. Once you let it access your geodata, you’ll find deals on items at retailers like Walmart, Whole Foods, Costco, and more.

Sometimes the deals are super product-specific, and other times you can see generic items like milk or eggs offered with a chance to get 25 cents back. In order to get your rewards, you’ll have to scan the item’s barcode with your phone’s camera and snap a picture of the receipt. You’ll then submit these through the app.

This can be somewhat time consuming. For example, the receipt can be long, requiring a few pictures, or you could accidentally throw away the packaging (which I’ve done on a few occasions).

This is another app with a generous referral bonus: You get $5, while your referral gets $10. You accrue referral bonuses and rebates in your Ibotta account and can request payouts via PayPal, Venmo, or a featured gift card once you meet the $20 threshold.

Ebates

Devices: Android, iOS

Ebates iOS app. Source: iTunes

Similar to Ibotta, Ebates gives you rewards for shopping through their portal and purchasing featured items, but Ebates also offers discounts. There are popular stores like Loft, Tom’s, JCPenney, Macy’s, and more. You’ll get your earnings via PayPal every three months (unless you’ve accrued less than $5.01.)

Ebates also has a great referral program. The payouts change from time to time, so you’ll need to check their referral program page for current payouts. At the moment, when you refer one friend who makes a minimum $25 purchase, you’ll get a $5 bonus, while your friend gets $10 added to their account balance after their first purchase.

Shopkick

Devices: Android, iOS

Shopkick iOS app. Source: iTunes

Shopkick pays its users points called Kicks for a variety of shopping activities.

When you open the app, it detects your location and shows you a list of nearby retailers and products that can help you earn Kicks. If you allow the app to access your GPS data, you’ll hear a cha-ching sound when you get close to a participating retailer.

Shopkick is set up to show you the best deals and popular products from retailers like Best Buy, American Eagle, Yankee Candle, and many more.

Kicks can be redeemed for gift cards to places like Best Buy, Starbucks, and Target. The referral program offers 250 Kicks for each friend who signs up and completes their first in-store action.

In terms of the conversion rate, 250 Kicks equals $1 for most rewards. You’ll need to check the rewards section of the app for conversions on specific items.

Gig economy

If you’ve got time and a certain skill set, you can make money helping someone nearby. The apps below are variations of the Uber-like work arrangement we are all getting more familiar with. Given the higher earning potential these opportunities offer, they also require more commitment: Before you can start earning money through these kinds of apps, you may have to submit an application and agree to a background check.

TaskRabbit

Devices: Android, iOS

TaskRabbit iOS app. Source: iTunes

TaskRabbit allows you to complete small tasks like errands, cleaning, or handyman work for people nearby. As a “tasker” you can choose the types of tasks you’ll complete, your rates, and your own schedule. There’s no minimum to the amount of work you can do; however, the site explains that you cannot invoice for jobs that are under one hour. TaskRabbit takes 30% of your earnings and is available in 39 U.S. metro areas.

The application process is straightforward but stringent. In addition to your general demographics, you’ll need to verify your account with official identification like a driver’s license. You will also need to complete a background check. The TaskRabbit website explains that the company receives a large amount of registrations and cannot give you a timeline on when you’ll be approved.

Fortunately, once you get going, it’s pretty easy to see tasks available, accept them, and even invoice your clients. Although earnings for individual taskers vary due to a number of factors, a report by Priceonomics puts the average monthly earnings are around $380.

GoShare

Devices: Android, iOS

GoShare iOS app. Source: iTunes

GoShare is an app for people who need moving and delivery help. You can earn money with this app if you have a vehicle for large deliveries and can lift heavy items. However, GoShare is only available in nine cities among three states: California, Georgia, and New Jersey.

GoShare users can also work with large retailers to help unload shipments and deliver items to customers. For example, someone who ordered a refrigerator from Home Depot could request a GoShare driver to deliver it.

If you live in one of the areas GoShare serves, you can apply to be a driver. Potential earnings vary by vehicle type: The website says someone who drives a small pickup truck could earn up to $47.52 an hour, while someone with a cargo van can earn up to $61.92 an hour.

Uber/Lyft

Devices: Android, iOS

Left: Uber iOS app. Right: Lyft iOs app. Source: iTunes

Probably the most popular of the bunch, Uber and Lyft offer people the opportunity to use their own car to drive people around and get paid for it. Rates are typically set by the company and depend on your location, time of day, type of car you have, whether or not a passenger will share a ride with other passengers, and a few other factors. Uber is in more than 630 cities around the world, and Lyft is in more than 550 U.S. cities.

Chime

Devices: iOS

Chime iOS app. Source: iTunes

Chime is a division of the popular child care site, Sittercity. Chime is a mobile app designed for people who need quick connections for child care. Again, the premise is: I’m available, you need help, let’s connect with this app. Chime is available in Boston, Chicago, New York City, New Jersey, and Washington, D.C.

According to Chime, all sitters are thoroughly vetted and have completed a background check as well as undergone ID verification. The hourly rate is set according to your local market starting from around $15-$18 per hour.

Rover

Devices: Android, iOS

Rover iOS app. Source: iTunes

The Rover app is like Chime but allows users to look for and offer house-sitting and pet care services. Once you apply to be a sitter, your profile, if accepted, takes about five days to be approve. (Note: You can opt to complete a background check through a third party, but it’s not necessary.) You should also know that you get to set your own rates for services.

Once you agree upon a price with your client and complete a job, your client pays through the Rover app. Those funds are released to you within 48 hours, less the 15% transaction fee Rover deducts. Your payments stay in your Rover account until you withdraw them.

A community forum thread on the Rover website puts part-time earnings at $500-$1,000 per month.

GreenPal

Devices: Android, iOS

GreenPal iOS app. Source: iTunes

There are a few Uber-like apps for lawn care, and GreenPal is just one of them. The only issue is that some of these apps don’t have enough users to make it worthwhile for either service seekers or gig workers (GreenPal currently serves 12 U.S. cities).

As a vendor, you’ll apply through the company’s website. Part of the vetting process is passing a criminal background check, providing client references, and confirming that you have proper lawn care equipment.

Once you are approved as a lawn care provider, you’ll get notifications of nearby jobs. You are able to upload photos of your finished work (kind of like a lawn care portfolio), and then your client will rate you.

Depending on your location and market, expect to bid anywhere from $25-$45 per job. GreenPal takes a 3% transaction fee when your client pays you.

If you have a financial goal in mind and need more earning options, apps like these can certainly help. Just remember to weigh the value of your time against the potential of earning more money before you commit to chasing income this way.

The post 15+ Apps That Help You Make Money appeared first on MagnifyMoney.

5 Ways to Get Your Finances in Shape Before the Year Ends

Everyone has those New Year’s resolutions that, even with the best intentions, seem to fall by the wayside. While it might be too late for some, there’s still plenty of time left in 2017 to fulfill your financial goals.

Courtney Lindwall, 24, an editor in New York City, says she set out at the beginning of this year to spend less money eating out. While she’s been better lately, she says she didn’t start working toward the goal right away.

“Around March, I was finally like, ‘Enough,’ and have been a little stricter about it,” she says.

In fact, mid-year is the perfect time to re-evaluate your financial situation and find new motivation for saving, says Catalina Franco-Cicero, director of financial wellness and a financial coach at Fiscal Fitness Clubs of America.

“We could all say that we get really excited at the beginning of the year,” Franco-Cicero says. “Then come summertime, we think, ‘Holy cow, I didn’t do anything. I really want to get remotivated.’”

Bruce McClary, vice president of communications for the National Foundation for Credit Counseling, says he also recommends reassessing financial goals mid-year. Making financial resolutions at the new year almost seems to “curse” them, he says, and there are many events to plan for financially in the second half of the year, such as back-to-school season and the holidays.

Here are five areas to evaluate to help you become more fiscally fit in the last half of 2017.

1. Put together a status report

You need to understand your financial situation in order to set goals for improving it. Finding the money to save or pay off debt can seem doubly daunting if you don’t know how you’re spending your money each day.

Evaluate the last six months’ worth of your expenses and income so you can plan for the rest of the year. McClary suggests reviewing the following things:

  • Your budget: Determine how much you’re spending each month on your home, car, food, and other living expenses.
  • Your debts: Make a list of all your debts, how much you owe on each one, the interest rates, and any pay schedules.
  • Your savings: Take stock of your savings accounts, including retirement accounts and emergency fund. Also think of things you would like to save for.
  • Your credit score. (If you’re not sure how, you can check out our guide to getting your free credit score.)

“Really give yourself a full picture of your financial situation so you can then go in and identify your best ways to save,” McClary says.

2. Dig into your spending habits

Once you have a high-level view of your finances, take a closer look at how you’re spending your money.

Franco-Cicero says she uses Mint, a money management tool, with her clients to help them categorize their transactions — a process people can easily turn into a habit.

Then, evaluate your discretionary spending to see what’s not necessary or where you can cut back. For example, consider reducing the amount you spend on subscription services or dining out and use the savings to pay off debt or to boost a savings account.

One thing to remember is seasonal expenses, like heating and cooling, McClary says.

“You want to make sure you’re making adjustments to your budget, while at the same time, being mindful of the expense categories that can change on a seasonal basis,” he says.

3. Reassess your credit card situation

A key step in reassessing your debt is taking a look at how much of a balance you carry on credit cards each month, how much you’re paying off each month, and how long it will take you to become debt free at that rate. You can figure this out with a credit card payoff calculator.

“Say [to yourself], ‘Hey, if I continue at the rate that I am going, will I ever be debt free?’” Franco-Cicero says.

Then create a plan to pay off your debt. McClary says the most important thing is to craft it around what motivates you the most. For example, if paying off the credit card with the highest interest rate motivates you, focus on that. If paying off the card with the lowest balance motivates you more, check that off first.

And even if it seems impossible to pay it off, he says there are benefits to chipping away at your credit card balance: Your minimum payments could go down, and using less of your credit line can help your credit score.

4. Start saving for something

We all know that we should be saving, whether it is for an emergency, retirement, or vacation. However, 23% of Americans don’t save any of their income, and only 38% report making good progress toward their savings needs, according to a 2017 survey from the Consumer Federation of America.

One of the best ways to become fiscally fit is to start saving for something that motivates you. You’re more likely to stick with saving toward a goal that you set for yourself, Franco-Cicero says.

If you don’t know where to start, she recommends a so-called “curveball” account.

“Curveball” accounts are similar to emergency funds in that they can help you cover unexpected expenses. The difference is that your “curveball” account would be used for things like replacing the worn-out tires on your car versus using your emergency fund to repair a blown transmission.

Now is also a good time to focus on saving for a house, McClary says, because you’ll have six to eight months to save before the next home-buying season. You can plan how much you need to save by looking at your existing savings, the cost of buying in your desired neighborhood, your debt-to-income ratio, and your credit standing.

No matter what you’re saving toward, McClary says an ambitious goal would be to save 20% of your monthly income between now and December.

If you make $2,000 a month after taxes, that means you would put about $400 toward savings each month. If you start in August, you could save $2,000 toward your goal by the end of the year.

5. Stick to your plan

Establishing where you are and where you want to be is only half of the battle when it comes to being fiscally fit by the end of 2017. Sticking with your action plan, as with all resolutions, can be the toughest part.

To be successful, Franco-Cicero suggests automating everything you can, from paying your bills each month to putting money into your savings account. This way, you don’t have to think about making sure a portion of your paycheck goes toward savings — your bank account will do it for you.

Franco-Cicero also says you should find a “money buddy” who knows your goals and can help you stay on track. Be sure to find someone who also has a financial goal and who will stick to a schedule so you can check in with each other. It’s a good idea to pick someone with whom you feel comfortable talking about money, not someone who you feel passes judgment on your purchases.

“We can be very lenient with ourselves, so you’ve got to find somebody who will hold you accountable,” she says.

Lindwall has had success following a similar approach. She says cooking more at home with her boyfriend has helped her stay on track toward her goal of eating out less.

“The biggest thing is getting someone else on board to do less expensive things with you,” she says.

The post 5 Ways to Get Your Finances in Shape Before the Year Ends appeared first on MagnifyMoney.

Why Banks Are Still Being Stingy With Savings and CD Rates

Mike Stuckey is a classic “rate chaser,” moving money around every few months to earn better interest on his savings. Lately, that has meant parking cash in three-month CDs at a rather meager of 1% or so, then rolling them over, hoping rates sneak up a little more each time.

“It’s at least something on large balances and keeps you poised to catch the rising tide,” says the 60-year-old Seattle-area resident.

Rate chasers like Stuckey still don’t have much to chase, however. The Federal Reserve has raised its benchmark interest rates four times since December 2015, and banks have correspondingly increased the rates they charge some customers to borrow, but many still aren’t passing along the increases to savers.

Why? There’s an unlikely answer: Banking consumers are simply saving too much money. Banks are “flush” in cash, hidden away in savings accounts by risk-averse consumers, says Ken Tumin, co-founder of DepositAccounts.com. Bank of America announced in its latest quarterly earnings report its average deposits are up 9% in the past year, for example – despite the bank’s dismal rates.

“In that situation, there’s less of a need to raise deposit rates,” Tumin says. “In the last couple of years, we are seeing deposits grow faster than loans.”

Banks don’t give away something for nothing, of course. They only raise rates when they need to attract more cash so they can lend more cash.

As a result, savings rates remain stubbornly slow to rise. How slow? Average rates “jumped” from 0.184% in June to 0.185% in July, according to DepositAccounts.com. (Disclosure: DepositAccounts.com is a subsidiary of LendingTree Inc., which is also the parent company of MagnifyMoney.com.)

And while the average yield on CD rates is the highest it’s been in five years, no one is getting rich off of them. Average one-year CD rates have “soared” from 0.482% in April 2016 to 0.567% in July. Locking up money long term doesn’t help much either – five-year CD rates are up from 1.392% to 1.504%.

There’s another reason savings and CD rates remain low, something economists call asynchronous price adjustment. That’s a fancy way of saying that companies are more price-sensitive than consumers.

It’s why gas stations are quicker to raise prices than lower prices as the price of oil goes up or down. Same for airline tickets. Consumers eventually catch on, but it takes them longer. So for now, banks are enjoying a little extra profit as they raise the cost of lending but keep their cost of cash relatively flat.

Holding Out for 2%

There have been some breakouts, however, most notably among internet-only banks. They have traditionally offered higher rates than classic brick-and-mortar banks, and now, they are more sensitive to rate changes, Tumin says. Goldman Sachs Bank USA, the Wall Street firm’s push into retail banking, announced in June it would offer 1.2% interest to savings depositors. The bank is working hard to attract new customers. Soon after, Ally Bank announced higher rates at 1.15%.

“Internet banks are always more sensitive to changes in the economy and at the Fed. Also, internet bank account holders tend to be more rate sensitive,” Tumin says.

“I remember in 2005-2006 we were seeing a 25 or 50 basis point upward movement,” says Tumin. Now we are looking at a 5 or 10 basis point improvement.” He expects that trend – stingy rate increases – to continue for the foreseeable future.

When will more consumers sit up and notice higher savings rates – and perhaps start pulling cash out of big banks, putting pressure on them to join the party?

“I think 2% will be a big milestone,” Tumin says. “That will be a big change we haven’t seen in five years.”

If you’re really frustrated by low rates from traditional savings accounts and CDs, Tumin recommends considering high-yield checking accounts, a relatively new creation. These accounts can earn consumers up to 4%-5% on a limited balance – perhaps on the first $25,000 deposited. The accounts come with strings attached, however, such as a minimum number of debit card transactions each month.

“If you don’t mind a little extra work … you are rewarded nicely,” Tumin says.

Time to Ditch Your Savings Account?

For that kind of change, is rate chasing worth it?

For perspective, a 0.1% interest rate increase (10 basis points) on $10,000 is worth only about $10 annually.

It’s, of course, up to consumers whether or not the promise of a little more cash in their savings accounts is worth the effort of closing one account and opening another.

Stuckey says rate chasing doesn’t have to be hard.

“I don’t really find it anything to manage at all,” he says. “(My CDs) are in a Schwab IRA, so I have access to hundreds of choices. They mature at various times, and Schwab always sends a notice, so I just buy another one.”

The low-rate environment has impacted Stuckey’s retirement planning, but he’s philosophical about it.

“I have mixed feelings. In 2008, as I planned to retire, I was getting 5.5% and more in money market accounts. High-quality bonds paid 6 and 7%. So lower rates have had an effect on my finances,” Stuckey says. “But … it has been nice to see young people able to afford nice homes because of the low rates. My first mortgage started at 10.5%.”

The post Why Banks Are Still Being Stingy With Savings and CD Rates appeared first on MagnifyMoney.

7 Ways to Manage Money Better than Your Parents Did

Don't let your parents' bad habits become yours. Here's how to do money the right way.

Every generation has their own habits when it comes to money. Whether it was our parents stashing cash in paint cans or their bedroom mattresses, or our great grandparents balking at investing after the Great Depression, generational events help mold how we manage our lives.

Sometimes it’s a good thing. Learning to be frugal after living through hard times can leave you better off, for example. Then again, some financial habits from decades ago have absolutely left people worse off.

If your goal is avoiding many of the financial pitfalls your parents (or their parents) fell into, you should strive to learn positive money habits while unlearning any lessons that stifle wealth.

I spoke to several financial planners to hear their thoughts on how the younger generation can do better than their parents. (Full Disclosure: I am also a certified financial planner.) Here’s what they said.

1. Avoid Placing Blind Trust in Financial Advisors

Your parents and their parents likely met with a financial planner during their lives. They didn’t have as much information at their disposal as we do today, so they hired professional help.

Unfortunately, many placed too much trust in the financial professionals they hired. Without much oversight, old school financial advisors were able to line their own pockets at their client’s expense, usually by selling them high-cost investments with low returns they didn’t understand.

To avoid falling victim to bad advice, you should learn as much about investing as you can, says Colorado financial advisor Matthew Jackson of Solid Wealth Advisors.

“Dedicate yourself to learn about investing so you can make educated decisions about your retirement rather than risk being led down a wrong and costly path,” Jackson said.

“In the age of technology, educating yourself about finances can be free and done in the comfort of your own home,” he continued.

You should still consider hiring a financial advisor, however. Just don’t trust them blindly. Brian Hanks, a financial advisor and author of How to Buy a Dental Practice said  your best step is to find an independent, helpful, fee-only advisor who is paid a flat fee to offer comprehensive advice.

By avoiding advisors who are paid commissions for the investments they sell, you can ensure you’re getting unbiased advice meant to benefit you.

2. Diversify Your Investments

Many people from the older generation have a narrow view of what it means to invest. Unfortunately, they tend to believe their way is the best way – even if it’s not the best way for their kids.

“If the parents are risk averse, they tell their kids to save their money in bank CDs, pay down debt, and avoid things like equities,” said financial advisor Joseph A. Azzopardi of The Well Planned Retirement. “If the family’s wealth was primarily made in private business, they encourage their children to focus their capital on business ownership.”

While many of these strategies can be successful when it comes to building wealth, there is no single best strategy. That’s why Azzopardi and many other advisors suggest their clients diversify instead of putting all their eggs in one basket.

“Diversifying a family’s balance sheet is a valuable way to lower overall risk and create multiple sources of income,” he said.

3. Switch Employers When it Benefits You

Our parent’s generation was strikingly loyal to a single employer, often to their detriment. Even when they had the opportunity to make more money, they often eschewed that option based on a misguided sense of duty.

“Many people just put their heads down and went to work every day, never thinking that there might be a better opportunity across the street,” says financial planner for business owners, Grant Bledsoe.

While loyalty is admirable, the advice to stick with a single employer for life is rather outdated today.

“You can be loyal to your employer of course, but need to be more strategic about your career advancement,” says Bledsoe. “You can really boost your earnings by continuing to improve your skill set and taking calculated risks along the way.”

4. Plan for a Lengthy Retirement

These days, people are living significantly longer. For the younger generation, that means we need to save up more cash to retire.

“As life expectancy continues to grow, present and future retirees will need to plan for a retirement that could span the course of several decades,” said Seattle Financial Advisor Josh Brein.

Whether you sit down with a financial advisor or plan your investments yourself, make sure you’re planning for a lengthy and expensive retirement. According to the Social Security Administration, men and women who reach the age of 65 can expect to live until ages 84.3 and 86.6, respectively.

5. Put Your Own Financial Health First

Our parents placed a lot of faith in higher education, so much so that many worked hard to pay for their children’s college education while neglecting their own retirement needs. This is a mistake, said financial advisor Joe Carbone of Focus Planning Group.

No matter what, you should remember you can’t borrow money for retirement. And, once you reach retirement age and find you’re short on cash, it’s too late.

6. Learn Basic Financial Education Early

In many families, the topic of money has always been taboo. You don’t speak of it because it’s “rude,” or because it’s an adult topic that shouldn’t be discussed with the kids.

But, not talking about money can be devastating for young people who reach adulthood without basic financial knowledge. Because of this, most financial advisors agree today’s parents should teach their kids money basics like budgeting and how to manage credit scores.

“Let’s face it, it almost completely falls on the parents to be the money professor since it’s rarely touched upon in our education system,” said Kansas City Financial Planner Clint Haynes.

If you don’t teach your kids about money, you can expect them to learn their lessons the hard way.

7. Build a Lifestyle That Doesn’t Require Debt

Today’s climate of cheap and easy credit started decades ago. Unfortunately, many of our parents embraced the idea of borrowing money to buy things they couldn’t afford.

This has led to the acceptance of ideas like the “perpetual car payment” and huge mortgages.

Albuquerque financial planner Jose Sanchez said his dad fell into the trap of financing an expensive car long ago when car loans first came into play. After getting his first job, he went out and bought a new 1968 Camaro, mostly because he thought “he deserved it.” But, after having kids and settling into working life, he realized the purchase was more of a financial burden than he thought.

Today’s workers would be wise to reject the easy credit atmosphere that is so prevalent today. The less money you owe, the more options you have.

And when it comes to building a life you truly love, the more options you have, the better off you’ll be.

Image: Zinkevych

The post 7 Ways to Manage Money Better than Your Parents Did appeared first on Credit.com.

6 Things You Need to Know About Amazon Prime Day

Online shoppers are gearing up for Amazon’s third annual Prime Day — a period of deep discounts on many Amazon items in mid-July. Since the company began Prime Day three years ago, it’s become the summertime answer to Black Friday.

But what’s all the fuss really about? In years past, there have been complaints that the site’s sale items aren’t all that exciting, with the hottest items selling out too quickly for many to take advantage of the deals.

Amazon hasn’t said much about what 2017’s Prime Day will look like, but to help you prepare, here are some things you need to know.

Q: When is Amazon Prime Day?

A: July 10-11

Prime Day kicks off at 9 p.m. EST on July 10, when the best deals will be posted online, and run for the next 30 hours.

New deals will be offered every five minutes, according to Amazon.

Q: Where can I find the best deals on Amazon Prime Day?

Electronics

Benjamin Glaser, features editor at DealNews, says that last year, Amazon Prime shoppers saved about 30% to 40% on electronics. Globally, people bought over 90,000 TVs, and in the U.S., people bought over 200,000 headphones during the 2016 Prime Day, according to an Amazon press release. However, Glaser cautions that TV deals tend to sell out fast.

It’s a safe bet that the best deals will be on Amazon-branded electronics, such as the Echo, Kindle, Fire tablets, and Fire TV products.

Glaser is anticipating seeing $15 off of the Fire TV Stick, which is currently at $39.99. The Echo, priced at $179.99, dropped to $129.99 on Monday June 26 for the day — the best deal on it this year.

It’s also likely that there will be deals on electronics that tie into the Amazon Alexa ecosystem, such as Philips Hue smart lights products — the starter kit is priced at $173.99 — and smart thermostats such as Nest, which is currently $246.85 (at the time of this writing).

Toys and more

Also, considering that 2 million toys and 1 million pairs of shoes were bought globally last Prime Day, it’s also likely there will be deals in those departments.

For example, among the best deals last year was $699 for the Segway miniPRO Smart Self Balancing Personal Transporter, which at the time was the lowest price for it on Amazon by $300, according to DealNews. The game Exploding Kittens: A Card Game was also on sale for $15, the lowest price on Amazon by $9 at the time.

Expect some products to have record low prices for Amazon.

“We have confirmed over the last two years that a lot of the prices rival the best prices we see on the site all year,” Glaser says.

Q: How long will deals last on Amazon Prime Day?

A: Amazon promises new deals every 5 minutes starting at 9 p.m. EST on July 10.

Some deals will expire in mere minutes, while others will last several hours, and some will last for the duration of the sale event. Each deal will have a timer that shows how long it is available.

Q: How do I know when an item goes on sale?

A: The Amazon App specifically includes a feature called “Watch a Deal” that will let you know when a deal you’re interested in is about to go live.

You also can join a waitlist (by selecting that button on the page) for deals that are 100% claimed.

Q: Do I need to be an Amazon Prime member?

A: You must be an Amazon Prime member to access the Prime Day deals. A Prime membership costs $99 a year or $10.99 per month and includes a number of other perks. Recently, Amazon announced a reduced price for Prime membership for low-income households.

“So, if that [$10.99] is less than what you think you’ll save on the stuff you want to buy [on Prime Day], then it’s a worthwhile investment,” Glaser says.

Amazon also offers a 30-day free trial, so if you haven’t had Prime before, you can use that to participate in Prime Day.

“This might be a good month to give Prime a test drive and see if you get good value out of it,” Glaser says.

Q: How will I know when they announce deals?

A: Glaser says Amazon will likely soon start releasing ads for some of the deals, so keep an eye out for them. Look particularly at Amazon products, electronics, small kitchen appliances, and shoes. Plan what you want to buy and set a shopping budget.

Since some deals will only be available for a certain time, you might want to set alerts for items. If you don’t already have an app that you use to track prices on Amazon, Glaser recommends the free apps CamelCamelCamel or If This Then That.

With all of the deals, it will be easy to buy things you weren’t planning on and don’t need. Glaser cautions against getting swept up in these deals and recommends sticking to your budget on Prime Day.

“If you see something that’s 95% off, you might spring to buy it and not really think about how much money you’re still spending, and whether it’s something you actually want,” Glaser says.

The post 6 Things You Need to Know About Amazon Prime Day appeared first on MagnifyMoney.

The Best Investment for Your Lump Sum

Whether your lump sum arrived as a tax return, a bonus, an inheritance or a larger-than-expected gift, here are some suggestions for what to do with it.

Money doesn’t usually come out of nowhere, but when it does, it’s nice to have some idea of how to use it. Whether your lump sum arrived as a tax return, a bonus, an inheritance or a larger-than-expected gift from a family member, Shelly-Ann Eweka, a Denver-based financial adviser with TIAA, has suggestions on what to do with it, depending on the amount and how much money you’ve already saved.

Her suggestions apply to two different scenarios: One, if you haven’t maxed out your savings potential and are carrying around some debt and two, if you’re debt-free and have managed to shore up adequate savings. Experts suggest tucking away enough to cover three to six months of expenses in case of emergency, as well as approximately 10% to 15% of your income in retirement savings. So if you’re behind, now’s the time to get started.

If You’re Trying to Save & Have Debt

Here’s how Eweka suggested investing various dollar amounts if you’re behind on your savings and carry debt:

$100

If you have no savings at all, Eweka said to either open an account using the lump sum or split it between a savings account and your favorite charity. Even $50 in an account will start you down the road to saving — sometimes all you need is a push. Be sure the charity is a 501(c)(3) for potential tax benefits, she said.

$500

To grow that $500, Eweka suggested opening an IRA. “Talk to a financial adviser about the benefits and whether your qualify for a Roth and traditional IRA,” she said. “An IRA can offer a great way to help build additional savings for retirement.” If you don’t have a financial adviser, you can learn more about IRAs here.

$1,000

This amount can go a long way when it comes to debt, so Eweka said to focus on that. “Allocate any extra cash directly toward paying down debt, whether from credit cards or student loans,” she said. “Paying down debt as quickly as possible, while also saving for retirement, is critical to avoid high interest.” (Paying down debt can also improve your credit standing. You can see how by viewing two of your scores for free on Credit.com.)

$10,000

If you have no savings, plunking the full $10,000 into an account will make a great start. “To be safe, you should have enough money in your emergency fund to cover all your necessary expenses for [at least] three months,” Eweka said. “That amount will vary from person to person, but you should have enough saved up to cover your necessities in case of a financial catastrophe.”

If You Already Have Savings 

If you’ve maxed out your savings and retirement options, you have more flexibility. Eweka suggested putting the money toward things that will advance your career.

$100

Consider having your resume professionally written and critiqued. Getting ahead in your career is a way to jump-start your personal wealth, and creating the best resume possible can help you climb the corporate ladder.

$500

Use your $500 to have a professional photograph taken, especially if you have a professional website, use social media or need to submit your bio and photo for business purposes, .

$1,000

Most people could stand to make updates to their wardrobe. If you’ve received a $1,000 lump sum, go through your closet and donate anything that no longer fits, is outdated or you haven’t worn in more than a year. Throw out things that are beyond repair or stained. Then use your lump sum to restock with clothing and accessories for a more polished and professional look.

$10,000

Enroll in research classes or certificate programs to enhance your career options. These will help you keep up with your skill set and look fantastic on your resume.

Image: StockRocket

The post The Best Investment for Your Lump Sum appeared first on Credit.com.

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.

11 Sephora Savings Hacks Everyone Needs to Know

If you can name your top 5 favorite beauty vloggers on YouTube, you’ve probably heard of a little makeup wonderland called Sephora. Bonus points if you’ve ever walked into the makeup emporium to touch up your brows with a free sample and left half an hour later and $100 poorer.

The LVMH-owned beauty store has been fairly successful since it first opened in 1969. It currently boasts 2,000 retail stores worldwide and around 15,000 of your favorite products. All of that revenue doesn’t have to come at the expense of your wallet.

We’ve done some digging to find 12 ways you can save money the next time the smell of perfume whisks you into your local Sephora retailer’s checkout counter with your credit card in hand.

  1. Loyalty Pays

Sephora is good to those who are loyal to the brand. Save on products and services when you sign up for the retailer’s loyalty program, Sephora Beauty Insider.

When you sign up, you’ll get points for each dollar spent in-store and online. The program has three tiers: Beauty Insider, VIB, and VIB Rouge, depending on how much money you spend with the leading makeup retailer.

Beauty Insiders — aka Sephora shoppers who spend less than $350 a year — get a free birthday gift and free classes, plus the option to pay $10 a year for unlimited free shipping privileges. VIBs, or Very Important Beauty Insiders, get all of the above plus additional exclusive savings and one free custom makeover for an annual $350 spent on merchandise.

Spend $1,000 a year in merchandise purchases, and you’re rewarded with the VIB Rouge level. Rouge offers all of the aforementioned perks, but you won’t need to pay the additional $10 a year for unlimited free shipping. You’ll also get other exclusive perks like unlimited custom makeovers.

  1. Get freebies by scanning the Beauty Deals page

Sephora has an entire page of its website dedicated to savvy shoppers like yourself. It’s appropriately titled Beauty Deals. It’s a little tricky to find the deals page as there isn’t a direct link to the page on Sephora’s home page, so make sure to bookmark www.sephora.com/beauty-deals.

It’s where you’re sure to find all of Sephora’s promotional codes for additional discounts and samples. You’re allowed a maximum of three free samples at checkout.

  1. Buy gift sets to save on individual products

If you’re going to purchase one or two items from a product line, you might be better off just buying a gift set. For example, the Yves Saint Laurent Black Opium Beauty Gift Set will run you $100 and comes with the Black Opium Eau de Parfum ($91), Rouge Pur Couture lipstick ($37), and Mascara Volume Effet Faux Cils ($32).

$91 + $37 + $32 = $160 value.

By getting the set, you’d save $60.

  1. Size up and save

If you buy something regularly, purchase the value size rather than smaller sizes. You’ll almost always spend less per ounce that way. For example, the regular 4.2-oz. bottle of Clinique’s Dramatically Different Gel will run you about $6.24 per ounce, whereas the smaller, half-ounce travel size option costs about $10 per ounce.

  1. Stock up on free samples in store

If you want to try out a product that’s way, way, out of your normal price range, get a free sample in-store to try before you buy. That way you won’t waste the full-size perfume you bought because of the brand more than the scent.

You are allowed up to three free samples per department in-store, and can get even more freebies online with beauty deals. Make sure to take home a sample of that expensive foundation to see if you can apply it as smoothly in your bathroom as the artist did in the store’s lighting.

Samples can also come handy when you’re traveling. So stop by Sephora and stock up on samples instead of travel-size bottles for short vacations.

  1. You can and should return products you don’t like

If you didn’t follow amazing aforementioned advice to try before you buy, it’s OK, I don’t listen to my mom either. What’s great is that at Sephora, you CAN make returns, even on makeup. Learn the return policy: you can return opened goods within 60 days in gently used condition.

  1. Shop out to in, bottom to top

Like at grocery stores, products are arranged at Sephora so that you see what costs the most, first. Check out items on the outer edges and on the bottom shelves first. They are typically cheaper than the ones you’ll see displayed at eye level according to Real Simple.

  1. Shop semi-annual sales

Sephora holds major semi-annual sales twice a year. This is another instance where your loyalty pays. Only Beauty Insiders get access to the major sale, when products are up to 20% off. The semi-annual sales typically happen in the spring and fall, usually mid-April or mid-November, and the sales normally last a few days.

  1. Use discounted gift cards

Purchase a gift card someone else is getting rid of at a discount before you shop. You can buy discounted gift cards for Sephora or department stores like Macy’s or JC Penney’s with in-store Sephora counters.

To find discounted gift cards, use sites like Gift Card Granny, which aggregates discounted gift card offers from around the web for you. Other great resources are Raise, WalletWhiz, and Cardpool.

Right now, we found Sephora gift cards available for up to 9% off through Gift Card Granny.

  1. Download a rebates app

You can get even more of the money you spent at Sephora when you shop using rebate smartphone apps like Ibotta or Checkout 51. For example, when you take a picture of your receipt after spending at least $50 at Sephora, you get $5 back on Ibotta.

With Checkout 51, you’ll browse local offers at stores, then take a picture of your receipt, and your savings will be credited to your account. When your account hits $20, you can cash out.

  1. Learn to DIY

You can save a lot of time and money on makeovers at Sephora by learning a few of the artist’s tricks yourself. Learn how to sculpt the perfect brow or apply flawless foundation at one of the retailer’s free 2-hour beauty classes.

Check online or ask the manager at your local Sephora for find out when and how to sign up for classes. If you have about 15 minutes and want a more personal experience, you can have a professional explain their process to you during a mini-makeover any day.

  1. Like, follow, subscribe

Following Sephora on its social media channels is the most obvious and easiest way to save on goods and snag freebies. Look out for posts on Sephora’s Facebook and Pinterest accounts to hear first about current sales and free samples.

 

 

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