Here are five strategies you can use to build up your finances this holiday season. (iStock)
While Black Friday is known for its big discounts and spending, this year you can focus on saving money and making more with these five tips.
- Move your savings to a high-yield money account
- Enroll in an income-driven repayment plan if you have Federal student loan debt
- Reduce what you spend on insurance
- Look into the growing house hacking trend
- Consider a balance transfer credit card
A recent Santander survey showed that many Americans are missing out on the opportunity to counter inflation by earning more on their savings. Interest rates on savings have reached their highest levels in decades. However, 66% of middle-income Americans have not taken advantage of these rates by moving their money into higher-yielding accounts since 2022. Simply moving your savings to a Certificate of Deposit (CD) could help you earn more with higher interest rates compared to regular savings accounts.
A high-yield savings account, also called a high-interest account, offers higher interest rates on deposits than a traditional account. The interest rate, known as an annual percentage yield (APY), can fluctuate. However, these accounts allow you to make deposits and withdrawals. By law, consumers can withdraw or transfer cash from a high-yield savings account up to six times per statement cycle without paying any fees.
If you’re burdened by high-interest debt, you may consider paying it off with a personal loan at a lower interest rate. Visit Credible to compare your options without affecting your credit score.
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Student loan payments resumed last month after a long break, which could strain your monthly budget if you owe money. The good news is that if you have federal student loans, you may qualify for several income-driven repayment plans that can significantly impact your finances. The new Saving on A Valuable Education (SAVE) income-driven repayment (IDR) plan, for example, can lower monthly payments to zero dollars or help borrowers save at least $1,000 a year. Nearly 5.5 million borrowers have enrolled in the plan, with 2.9 million having $0 payments.
If you have private student loan debt, refinancing could be a good option to reduce costs. By taking out a new student loan with better terms to pay off your current one, you could pay off your loans faster and reduce your monthly payments.
Visit Credible to check your rates and see what you qualify for without affecting your credit score.
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You might have noticed that your car insurance costs have gone up even if you haven’t made a claim. If you take the initiative, you could possibly lower your expenses in this area.
Negotiate with your insurance provider by asking about policy changes that could reduce your premiums. Many insurers offer payment plans and alternative payment date options for customers facing financial stress.
Alternatively, you can shop around for the best price. Compare quotes from at least four to five companies before choosing a policy, and review your policy every six months to ensure it still meets your needs. Price shopping should become an annual habit for price-conscious consumers seeking the best deal.
Comparing car insurance quotes is crucial but can be time-consuming. Credible can simplify the process and save you time in your search.
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Inflation and rising costs have motivated Americans to find additional income sources. One emerging trend is house hacking, where a buyer purchases a home with the intention of renting out rooms long-term or short-term.
Using an extra bedroom in your home for either the short or long term could generate a new revenue stream. Carefully consider the arrangements and the potential risks.
If you’re thinking of becoming a homeowner, it’s helpful to shop around for the best mortgage rate. Visit Credible to compare options from different lenders and choose the best rate for you.
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If high-interest credit card debt is straining your budget, a balance transfer card could help you regain control. This option allows you to transfer an existing credit card balance to a new card with a grace period during which no interest is charged. These introductory 0% APR periods can last up to a year, but must last at least six months, according to a post by the Consumer Financial Protection Bureau (CFPB). This enables you to pay off your credit card balance with interest-free monthly payments.
Keep in mind that credit card companies typically charge balance transfer fees of 3% to 5% of the total transferred amount. Cardholders also need to pay off their balances before the introductory grace period ends, or interest will accumulate on the remaining balance.
If you’re considering a new credit card, you can compare the benefits of different options from multiple lenders through the Credible marketplace and see which cards you qualify for.
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