8 expenses to factor into your home budget

 

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Your home budget, also known as your household budget, is the money you set aside that will go toward essential living expenses. It’s critical to budget your finances to only spend what you can afford and reach your savings goals. 

You can guess what kind of things go into a home budget: rent or mortgage, groceries, savings, debt repayment, utilities, etc. However, people sometimes forget to factor the following expenses into their budgets, which catches them by surprise and forces them to reallocate their spending. Keep these costs in mind when figuring out how to budget your monthly paycheck and savings:

Transportation & Parking

You know you’ll need to pay for your vehicle each month if you own or lease one, but what about gas? Parking? If you don’t own a car, then how much does public transportation cost in your area?

According to Student Loan Hero, the United States' median household income was $61,937 in 2018. Households that earned this amount spend an average of $763 per month on transportation, including gasoline and car payments. Public transportation is cheaper, but again, it depends on where you live — you still might spend as much as $160 per month if you exclusively use Bay Area Rapid Transit in San Francisco.

Insurance Premiums

Insurance premiums are a significant hit on your wallet, but they’re necessary to have. Health and car insurance go without saying, but you may owe mortgage insurance if you put less than 20% down when purchasing your home. There’s also life insurance, personal insurance, contributions to social security, and more.

It’s difficult to calculate how much the average person in the U.S. spends on insurance because people’s situations vary tremendously. You might be lucky and only spend a few hundred dollars a month if you live in an inexpensive state and only need the basics. If you need more, then you could spend well over a thousand. Other factors affect your insurance premiums, too, such as your age, marital status, job, and education level, so combine all kinds of insurance you need to pay for when calculating your monthly household budget.

Out-of-Pocket Costs and Emergencies

Insurance doesn’t cover everything, though. Medical care is notoriously expensive in the U.S., so you should be prepared to pay out-of-pocket costs that exceed the scope of your health plan.

Disasters strike in other ways, too. Hopefully, it’s small — maybe you spilled coffee on your only nice shirt and need to buy a new one for work — but it might be an outright emergency, such as someone robs you or a natural disaster impacts your home. It’s crucial to have emergency money set aside to cover an irregular or unforeseen circumstance.

Pet Care

You budgeted to feed yourself, but what about your pet? These costs might be low if all you need to buy is food every month and a few toys that last you a year, but vet bills can be expensive if your animal friend has health issues. If you prefer to outsource much of your pet care, you should budget much more to account for sitters, boarding, and walks. Of course, pet care expenses depend on the kind of animal you have, so anticipate how much financial TLC your pet will need.

Subscriptions and Memberships

Subscriptions and membership fees on auto-renewal can sneak up on you. Don’t fall into the trap of thinking you’ve planned your budget for the month perfectly, only to be hit with a $15 Netflix bill you forgot to account for. These costs shouldn’t be out-of-sight, out-of-mind, so keep track of streaming services, subscription boxes, or shopping memberships you pay for.

Fees, Fees, and More Fees

Fees are everywhere. They’re like pests you can’t seem to get rid of, but you forget about them when they’re not in the room. Make a list of all the fees you might need to pay throughout the month, including:

●       Bank account maintenance fees;

●       ATM fees;

●       Overdraft fees;

●       HOA dues;

●       Credit card fees;

●       Late fees;

●       Monthly service fees.

 

And more. There are ways to avoid or reduce many of these, but don’t buy something you don’t need if a fee will hit you later and you’re living paycheck to paycheck.

Home & Vehicle Maintenance

It’s rare for everything to work as it should, especially if you can’t afford high-quality goods that last longer. Expect to pay for vehicle upkeep, appliances that stop functioning, and fixing potential damage. These costs are related to your emergency funds, but paying for regular maintenance will (hopefully) prevent actual emergencies from happening in the first place.

Different Kinds of Savings

Save as much as you can. Don’t forgo leisure entirely — it’s important to your mental health to have fun, and you deserve to — but besides general savings accounts, remember to save to buy a house, pay for college (or someone else’s education), emergencies, retirement, and more. Your monthly contribution to each may vary, but having substantial savings will set you up for major purchases later in life.

Budgeting is an essential skill. You can use a budget finance app if you need assistance, but remember to factor in every possible expense to avoid tight situations.

 

This article originally appeared on Earnin.

 

Please note, the material collected in this blog is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or Services.

How to stay calm when dealing with financial stress

 

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Have your money problems become so dire that you find yourself searching “I need financial help immediately?” We get it. You’re in a tight spot, and you’re panicking. Hearing that you're not alone doesn’t really help, and you aren’t sure what to do while you’re not thinking clearly.

Take a breath. Financial stress can be overwhelming, but you have more resources and options than you know. However, we need to get you in the right mental space first. Let’s go over some ways to keep yourself calm so you can tackle your financial problems with a clear mind.

Identify the Problems and Make a Plan

One of the reasons why money problems can seem so daunting is the mystery of them. Of course, besides the obvious answer that you don’t make enough money to pay your bills, financial difficulty can have other sources. It might be your spending habits, a past mistake, a misunderstanding of the financial system, or something else. Those you can address right away.

Look over your financial statements and try to identify where the problem lies. Are you spending too much on unnecessary items? Does your paycheck come in too late? If the former is the case, then make a budget that ensures you can pay off your debts before spending anything on excess leisure items. If it’s the latter, then you have more control over when you receive your income than you may know: apps like Earnin allow you to access up to $500 of your paycheck per pay period, giving you time to pay your bills before incurring late fees.

Improve Your Financial Literacy

Next, make an effort to educate yourself about financial topics. Books about personal finance are a great place to start, such as Personal Finance for Dummies, along with blogs about related subjects. Take advantage of free or inexpensive financial literacy courses online or from your local community college. The more you know about the financial system, the more prepared you will be, and the less scary your money problems will seem.

Talk to a Professional

Consult with a credit or debt expert for practical advice regarding your situation. A professional can help you perform the steps mentioned above and guide you through the remainder of the process, including making a concrete debt management plan. Having someone in your corner will bring you peace of mind.

Besides a financial expert, another kind of professional you should talk to is a therapist. Regular conversations with this kind of expert will help you navigate the emotional aspects of financial stress. If your habits are partly responsible for your situation, then hopefully, a therapist can help you change those, too. You can find free and low-cost therapy resources here.

Avoid Unhealthy Coping Mechanisms

People struggling with financial difficulty sometimes resort to bad habits to deal with stress. Unhealthy coping mechanisms will only exacerbate your situation in more ways than one. Avoid the temptation to spend even more money (this is not the time for retail therapy), eat excessively, drink alcohol, or abuse other substances. Call SAMHSA’s free national helpline at 1-800-622-HELP (4357) if you feel that you are about to engage in harmful or addictive behavior.

Practice Mindfulness Exercises

Instead, practice mindfulness exercises to cope with stress in a healthier way. You can replace bad habits with good ones or start practicing mindfulness immediately to avoid unhealthy coping mechanisms to begin with.

Breathing exercises, yoga, meditation, and other activities can help you center yourself and stay grounded. They don’t alleviate your money problems, but you can use them to change your perspective and attitude toward your situation. Other stress-relieving activities include going for a walk, spending time in nature, creating artwork, hugging someone, playing with pets, and learning how to talk about yourself in a more positive light. Dwelling on your stress isn’t productive, so put your energy into something wholesome if you are unable to relax.

Keep Track of Your Progress

Keep track of your progress as you take steps toward addressing your financial problems. Not only is doing so necessary for the process itself (you should keep a careful record of the money you spend and the debt you pay off) but celebrating small goals is beneficial for your mental health. Take pride in your little victories. Keeping track of your progress puts your entire financial situation in perspective, motivates you to push forward, and makes your circumstances seem less bleak.

Remember: financial difficulty is not a moral failing. The money system is complicated and underserves the under-educated and a vast majority of people. Take advantage of the resources available to you and believe that you have what it takes to turn your situation around.

This article originally appeared on Earnin.

 

Please note, the material collected in this blog is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or Services.

7 of the most practical ways to save money

 

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Are you trying to be better about saving money? You’ve heard the same advice, time and time again: spend less. But the question now is, how? “Spend less” is vague, and you have expenses to pay that you can’t just eliminate, as much as you’d like to. Here are seven practical ways to save money, and not all of them entail making sacrifices:

Save in Small Increments

Perhaps you struggle with saving money because you always forget or don’t know how much to put aside. When your paycheck comes in, do you immediately put a certain percentage in a different account that you don’t touch regularly, or do you let it all sit in one account, waiting to be spent? 

Start by saving small increments. $2 to $5 will add up over time if you do it frequently enough. Instead of logging into your online banking account every time you want to add a few dollars into your savings, you can use third-party apps that make small transactions easy. For example, you can use Earnin’s Tip Yourself feature to save a small amount of cash, and assign tipping yourself to a positive behavior (such as working out), so you remember to do it often.

Snowball Your Debt

A significant part of your money-saving plan should be paying off debt. Identifying where to start eliminating debt can be just as tricky as figuring out how to save more money, so experts suggest employing the “snowball” technique. As a snowball rolls down a hill, it grows larger as it accumulates snow and momentum. You can apply the same concept to your debt and begin with the smallest amounts.

It sounds counterintuitive, but by paying off your $500 credit card debt before tackling your $5,000 loan, you glean a sense of satisfaction and practice better financial habits. If you pay off $500 of your loan, you still have two debts and two interest rates. Knock one out of the way by starting with the smaller debt and build enough momentum to pay off the other.

Audit Your Expenses — Then Trim Them

Conduct a thorough audit of your expenses to see where your problems lie (besides not earning enough money, of course). What are the payments you cannot avoid, and what are the costs you could do without or somehow reduce? We’re not suggesting you cut out leisure entirely — recreational activities and entertainment are important to everyone’s mental health — but if you’re spending money on something you don’t use or that doesn’t bring you happiness, put that money toward your savings instead.

Cancel Monthly Subscriptions

While subscriptions are convenient because you don’t have to think about paying the bill each month, they can be a sneaky expense that drains your account for no reason. If you watch a Netflix show in June and August, why pay $15 for July? Don’t be afraid to cancel subscriptions, even if you know you’ll resume using the service in the future. 

Be wary of year-long subscriptions, too. Don’t bother paying the fee for Amazon Prime if you’re only going to order something a few times per year.

Forsake Brand-Name Goods

The appeal of brand names is enticing, but it’s often manufactured. Generic goods can be just as high-quality as brand-name varieties. Omitting the price difference from your monthly expenses can result in significant savings. If a designer's shirt costs $100 but is hardly better than another of the same style that costs $20, go with the latter and don’t pay for novelty.

However, some brands do use higher-quality materials and put more effort into their products. It’s good to invest in longevity, so you aren’t buying the same product over and over again, so research what companies you buy from and whether the extra cost is worth it.

Call and Negotiate With Your Providers

It might not have crossed your mind to call your various creditors and providers (such as your credit issuer, mortgage lender, health insurance provider, internet provider, etc.) and ask them if they are willing to reduce your bill or interest rates. Why not? What they charge you isn’t fixed, and it never hurts to ask. The worst thing they can do is say no, so pick up the phone (you may have to call around to find the right person) and negotiate lower interest rates and fees. Hopefully, they want to keep you as a customer enough to grant your request.

Convert Money to Time

Saving more and spending less requires thinking about money differently. When you see an item you want to buy but aren’t sure whether you can afford it or not, try thinking about the price in how long it would take to earn that money back. For example, if you make $17 an hour and want to purchase a new coat that costs $65, that’s almost four hours' worth in wages. Changing your perspective will help you align your spending habits with your budget more effectively.

Your financial health will be in a much better place if you know how to save more money. You may have to make some lifestyle changes, but there are other practical ways to reduce your expenses and pocket what you earn.

 

This article originally appeared on Earnin.

 

Please note, the material collected in this blog is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or Services.

Can You overdraft a credit card, debit card, or savings account?

 

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Overdraft protection is a banking service consumers can opt into to overdraw their chequing accounts for a fee. For instance, if your account only has $10 in it and you forgot about your upcoming $15 Netflix subscription, your payment will still go through because 1) your bank can loan you $5, or 2) you have a backup account linked. Your bank will charge you an overdraft fee either way, and Bankrate reports that the average fee is $33.47.

“Can I overdraft my debit card?” you ask yourself. “What about my credit card? Or my savings?” You know it’s possible to overdraw your account with online payments, and you’ve heard of people doing it with cheques, so it’s understandable to wonder what other kinds of accounts allow you to make transactions without sufficient funds. If we’re going to use the term “overdraft” as a verb, let’s dive into the possibilities.

Can You Overdraft a Debit Card?

Yes, you absolutely can overdraft a debit card.

Let’s say you had $5 in your account this morning, but today is payday, so you should have plenty of money by the afternoon. Unfortunately, your employer’s payroll system takes longer to deposit your paycheck, so you won’t have the funds you expect some time until the next business day. You use your debit card to buy a $7 slushie from the convenience store without knowing your real balance. The transaction goes through because you have overdraft protection, but now you owe the bank $35.47 — $2 for what it loaned you and $33.47 for the service.

You can call the bank and try to explain, but you just purchased a really expensive slushie if they decide not to waive the fee. It was such a small difference, too, but overdraft fees are fixed. Your debit card is connected to your chequing account, so debit card overdrafts are a common way to incur such fees.

In addition, banks will often set overdraft limits. Even if you have overdraft protection, this means you cannot borrow more than your bank will allow if you overdraw your account (such as $500 or $1,000).

Can You Overdraft a Credit Card?

No, a credit card overdraft is not a thing — at least, not exactly. Because using your credit card entails borrowing money from your credit issuer, there is technically no finite amount of money in an account to withdraw from.

However, it is possible to reach and exceed your credit limit. Your credit limit is the maximum amount of money your issuer is willing to let you borrow. This number varies between different cards, institutions, and individuals, so it could be as little as $200 (such as putting down a deposit on a secured card) or as much as $500,000. Your card will decline if you attempt to make a purchase that pushes you over your credit limit.

Unless you have over-limit coverage, that is. Similar to overdraft protection, over-limit coverage is a service you must opt into with your credit issuer that enables you to exceed your credit limit in exchange for a fee. Your bank cannot charge you fees for reaching your limit, only if you agree to surpass it.

Keep in mind, though, that using too much of your available credit could negatively impact your credit score. Experts suggest using approximately 30% of your credit limit. For instance, if you have $15,000 in available credit, then making more than $4,500 worth in purchases or expenses could make you seem like a risky borrower.

Can You Overdraft a Savings Account?

Fortunately, a savings account can only be emptied, not overdrafted. That said, different rules influence your ability to withdraw from your savings.

US law dictates that you cannot make more than six convenient withdrawals from your savings account per month (“convenient” includes transfers made via phone, online, cheque, etc.). Your bank may charge you a fee if you exceed this number of withdrawals or refuse the transaction. However, it’s possible to exceed the six-withdrawal limit if you use “inconvenient” methods, such as visiting a bank branch in person, taking out cash from an ATM, or requesting a cheque.

How Can You Avoid Overdraft Fees?

Though you cannot overdraft savings accounts or credit cards, it’s beneficial to be careful with your checking account, so you avoid overdraft fees. A few ways you can elude overdraft fees include:

●       Opting out of overdraft protection;

●       Enabling low-balance alerts, so you know when you are at risk of overdrawing your account;

●       Linking your checking account to your savings as a backup.

 

You can also use financial apps to manage your various accounts and keep a watchful eye on your financial situation. If you have a low balance with no choice but to pay a necessary expense, then Earnin allows you to access up to $100 per day from your paycheck before the typically scheduled date without taking out a loan. Likewise, Mint is helpful for budgeting, and Peak can help you visualize your financial goals.

You’re not alone if you’re worried about overdrafting, but rest assured, you cannot overdraft a credit card or savings account.

 

This article originally appeared on Earnin.

 

Please note, the material collected in this blog is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or Services.

What is a Returned Item Fee and why was I charged?

 

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You’re not alone if you’ve fallen out of the habit of balancing your checkbook because you trust your online banking statement to indicate how much money is in your account. Why do the math when the number is so accessible? This amount is not always accurate, though, because it might not reflect recent purchases or pending transactions.

As such, you might have tried to write a rent cheque with less money in your account than you believed. Your landlord attempted to deposit the cheque, but it bounced. Now you’re late on rent, and there’s a charge on your bank account that reads “NSF Fee - Item Returned.” You didn’t mail any packages that came back to you, so what does this fee mean, and why were you charged?

What are Returned Item Fees?

Your account's charge is called a returned item fee, also known as a nonsufficient funds fee (abbreviated as NSF). It means you didn’t have enough funds in your chequing account to cover your attempted transaction, and you don’t have overdraft protection.

WalletHub notes that NSF fees are fixed and vary between states, but they are usually between $27 and $35. Because they are set, you can incur a $30 fee for overdrawing your account with $700 in it if you try to write a check or make an ACH payment for $800. Likewise, your bank can charge you the same $30 if you try to buy groceries at the grocery store using a debit card for $50 with only $2 in your checking account.

Why do these fees exist? You’re not wrong to notice that they perpetuate the cycle of debt and poverty. The answer is in the name “returned item fee” — your bank is making you pay for the trouble of sending your money back to you. Your bounced cheque will be re-deposited into your account, but your bank won’t do it for free.

Can You Waive a Returned Item Fee?

It’s possible, but not common. It never hurts to call your bank’s customer service center and ask. The worst thing they can do is say no, and they may feel more inclined to help you out if you explain your situation or have never overdrawn your account before. The bank may not erase the charge entirely, but it’s always worth a shot.

How are NSF Returned Item Fees Different Than Overdraft Fees?

You might be confused about the difference between an NSF returned item fee and an overdraft fee. Overdraft protection is a service you can opt into that allows you to overdraw your account when you have nonsufficient funds. If you had overdraft protection in our previous example, your bank would loan you the difference or pull from your savings account, your rent cheque would still go through, and your landlord would be none the wiser. Your bank would then charge you a comparable overdraft fee for using this service.

How to Avoid Returned Item Fees

How can you avoid having an “NSF Fee - Item Returned” charge in the future? Check out the following tips:

Access Your Money On Time

Maybe one reason you had less money in your account than you thought you did is because your paycheck was delayed. You depend on punctual deposits to pay your bills on time (or your bills are due before payday), but you’re afraid to ask your employer for an advance too often. In this case, you can use an app like Earnin to access your pay when you want it and make payments. You’ll avoid a returned item fee, and you pay the app back without mandatory fees when your paycheck arrives.

Use a Backup Source

Link your chequing account to a backup source of money, such as a savings account. You will likely have to pay an overdraft fee to pull from it, but this will hopefully be smaller than an overdraft fee for borrowing money or an NSF fee.

Take Advantage of Overdraft Protection

Overdraft protection can spare you from NSF returned item fees. However, be aware that there are caveats to this service. Your bank could report you to a debit bureau like ChexSystems if you rely on it too frequently, which could negatively impact your ability to open a new checking account in the future.

Turn on Low-Balance Alerts

Link your account to an app with low-balance alerts or use your bank’s native feature. If your funds drop too low, an alert will notify you that you either need to replenish your account or avoid spending until further notice. Mint is an example of an app that enables low-balance alerts.

Budget Carefully

Besides making a significant amount of money, your next-best option to avoid returned item fees is to budget carefully. Make sure you balance your accounts and checkbook, so you know how much money you have at any given time. Your online banking statement and third-party apps can help, but it’s always good to be sure before you trust the number they display too quickly. Apps like GoodBudget and Cleo can help you manage your money wisely.

It’s not fun to see a returned item fee on your statement, but you can avoid them by keeping an eye on your financial status and using resources available to you.

This article originally appeared on Earnin.

Please note, the material collected in this blog is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or Services.

EPF declared 5.2% (conventional) / 4.9% (shariah) dividend for 2020

After a long time waiting, the Employees Provident Fund (EPF, a.k.a. KWSP) has finally declared the dividend rate for financial year 2020.

For year 2020, the dividend declared for conventional account is 5.2% while for Shariah account is 4.9%. The dividend has already credited into members' account, and you can check for it by login into your EPF i-Account.

Year 2020 was the 4th year of dividend declaration for Shariah account, while dividend for conventional account has been declared annually since 1952. The dividend for Shariah account in all the years from 2017 to 2020 were lower than the dividend for conventional account of the same year.

The 5.20% dividend for EPF conventional account in 2020 is 4.59% lower than the 5.45%  dividend declared for 2019 (last year).

Calculation: (5.20-5.45)/5.45 = -0.25/5.45 = -4.59%

It is 6.12% higher than the 4.90% Shariah dividend declared for the same year.

Calculation: (5.20-4.90)/4.90 = 0.30/4.90 = 6.12%

The table below shows the historical EPF dividend payout rate since 2000, for you to judge yourself whether the dividend payout rate in 2020 is satisfactory or not.

PTPTN announced 2020 dividend for SSPN-i and SSPN-i Plus

The Malaysia National Higher Education Fund (Perbadanan Tabung Pendidikan Tinggi Nasional, PTPTN) has just announced dividend for year 2020 for the education savings schemes SSPN (Skim Simpanan Pendidikan Nasional, consists of SSPN-i and SSPN-i Plus) on 23 February 2021.

The 2020 SSPN dividend payout rate is 4%, amounting to RM201.3 million. This rate is the same as previous payout for 2015-2019.

This 4% dividend has already been credited into our SSPN accounts respectively on 24 February 2021.

In 2020, the amount of deposits in  SSPN was RM1.99 billion, with 436,101 new accounts opened by depositors.

According to PTPTN, the number of SSPN accounts opened to date is 4.82 million.

Historical SSPN-i dividend payout rate is as below:

·   2020: 4.00%

·   2019: 4.00%

·   2018: 4.00%

·   2017: 4.00%

·   2016: 4.00%

·   2015: 4.00%

·   2014: 4.25%

·   2013: 4.25%

·   2012: 4.25%

·   2011: 3.75%

·   2010: 3.25%

·   2009: 2.50%

·   2008: 4.00%

·   2007: 4.00%

·   2006: 4.00%

·   2005: 4.00%

·   2004: 3.00%

You can proceed to the Online SSPN-i Statement of Account website to check the transactions and amount of savings in your kid's SSPN account.

You are also highly encouraged to read about Online paying PTPTN / SSPN-i with credit card through Boost.