Snow day? Money day!(w/ Printables)

It’s the most wonderful time of the year: Snow Day Season!

In the winter, students all over the country wear their pajamas inside out and flush ice cubes down the toilet, hoping they’ll wake up to several inches of snow and no school.

And every so often, it works! (Not really, but it’s fun to imagine it might.)

Building snowmen and going sledding are both super fun, but after several snow days, you might find yourself looking for other things to do.

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Sure, you could binge the newest Netflix shows, play a video game, finally learn how to knit, or *gasp* finish all of your homework, but I’m going to make a radical suggestion: make a money plan.

Many money experts and companies encourage adults to set aside one weekday per quarter (every three months) to look through their money situation and change or update anything that needs attention.

Teens and college students may not have much money to manage, but it’s always good to know where you stand and have a plan in mind for the future.

So this year, I invite you to set aside at least an hour or two during a snow day (or teacher work day, or whatever) to take note of what you have, what you want, and how you’re going to get there.

To help, I’ve created a few printables that you can use (for free!) to help you get and stay organized with your money, even if all you have is a piggy bank.

Let me know if you use them and if you have any suggestions for edits or for other printables!

 

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A simple sheet with 12 steps to reaching your savings goals.

 

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For a quick round-up of your cash and accounts.

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If you just want to sketch out some of those awesome dreams and goals!

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The classic envelope system of putting aside money.

 

How to build credit as a teen

Credit is an amazing word. It gets used for all sorts of things, like crediting a source in a research paper or giving your brother credit for not stealing all your Cheetos even though they were RIGHT THERE waiting to be stolen.

In the money world, credit is a big deal. Without credit cards, online shopping would be much harder, and without lines of credit like mortgages and car loans, a whole lot of people wouldn’t be able to afford houses or cars.

The word credit actually comes from a Latin word meaning belief or trust, which makes sense because when someone loans you money, he or she is trusting that you will pay it back. Credit scores were invented to represent how likely it is that you’ll do that.

Trouble is, credit scores are based on a lot of factors, all of which reflect your history using credit. Without a credit score, you won’t get money from most lenders. So, how do you get credit if you don’t already have it?

How do I get credit?

Creating a credit profile can seem like a Catch-22 because many credit-building sources require a credit score!

I remember thinking that this was confusing and unfair when I was first looking to build credit, too. Luckily, there are a couple of side doors into the world of credit that can help get you started at any age.

If you’re a minor…

If you’re under 18 in the US, you cannot qualify to borrow money or open a credit card of your own. However, there are still ways to start building a healthy credit record with the help of your parents or legal guardians.

Become a registered user on an adult’s card.

Registered users get access to the perks of the credit card, but are not responsible for paying for charges made on the card. Living the dream.

Of course, this option requires a lot of trust on the part of the person allowing you onto his or her account, so if you want to remain on good terms with this person, don’t go hog-wild with the credit card.

My dad did this for me when I was first starting out, and it was understood that the card was for emergency use only. Otherwise, I used my debit card. I’m so thankful now that I got the benefit of his years of credit background and good money management. It made getting my first apartment much easier. Thanks, Dad! 🙂

If you’re 18 and over…

Becoming a registered user is also an option for non-minors, but once you’re legally an adult, a lot of other options open up, too.

Have an adult co-sign on your first loan or credit card.

Co-signers are basically there to reassure the credit-givers that SOMEONE will pay them back, even if you flake out. This means they are on the hook for any money you borrow or charge if you don’t pay it back, so, again, don’t abuse this privilege if you want to keep your relationship with your co-signer healthy.

Get a secured credit card.

This one you can do all on your own! Secured credit cards are designed to help people build enough credit to get a real, big-person card.

To get a secured card, you’ll usually have to pay a deposit equal to what the card’s credit limit is. It then works just like a real card, including interest rates on unpaid balances. When you are ready to graduate to an unsecured card, pay off any balance on the unsecured card and you’ll get your deposit back.

If you’re interested, WalletHub has a nice list of 10+ Best Secured Credit Cards for 2017.

Report your rent payments.

If you’re living off-campus at college or just living on your own, using a service that reports your rent payments to the credit bureaus can help you build credit without needing a credit card or loan. You’re going to be paying rent anyway, so why not benefit from it?

These services typically charge you a fee for each payment they report or each month you use them, and some charge a set-up fee. However, in the long run, a higher credit score could save you much more money in the future, so a rent payment reporting service might be worth it if you can afford it.

You might need to get your landlord or apartment office on board, and not all rent-reporting services report to all three credit bureaus, so make sure you read all the fine print before shelling out any money.

Popular services include RentReporters, Rent Kharma, Rent Track, PayYourRent, and ClearNow. I have not personally used any of these services, so I can’t endorse any one of them over any other.

Take out a credit-builder loan.

Some banks and credit unions will loan small amounts of money to people with bad or no credit with the goal of building those people’s credit score.

There’s a catch, though.

When you get one of these loans, you don’t actually get the money. The bank puts it into an account, where it waits for you to complete the payments on it. THEN you get the money.

This is clearly not a loan for people who actually need the money for something right away. It really is only for building a payment history. However, the amounts are small, sometimes only $100, and the potential bumps to your credit are large, so if you are 100% sure you can pay all the installments, this could be a nice way to add some points to your score.

Be careful

Don’t over-extend yourself trying to do all of these things in a hurry. Pick one or two ways you want to start building credit, and put those into action. If, after a few months, you’re still on track and want to explore other options, feel free.

Remember that no matter what methods of credit creation you use, the best thing you can do to boost your score is to make payments on time. Do that consistently, and your score will rise naturally.

How to pick the right savings account

Just a head’s up, this post is not short. It has a lot of important info though, so if you make it to the end, I promise to have a shot of cuteness waiting for you. 😉

So you’re looking to open a savings account. Yay! Whether you’ve checked out my post explaining what a savings account is or you’ve independently decided to take this step, I’m proud of you.

Now, on to the toughest part: picking a savings account.

It might seem like the most convenient account to open is the best. Many teens and young adults end up opening accounts in the same banks that their parents use. When I went to college, my dad and I opened an account in the bank that was closest to my college campus. Sure, these options may work, but you should consider more than convenience when it comes to your money.

Fees

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Yeah, I know, I feel ya.

Probably the number one feature you should pay attention to when choosing your savings account is the fee structure. Let’s take a look at some of the most common fees that banks will build into their savings accounts.

Opening an account

Most major banks today allow you to bank with them at no up-front cost, but there are still a few that may require you to pay them to open an account. Unless there’s a really good reason for you to use such a bank that makes it worth $20-$30, I’d look elsewhere.

Monthly fees

Most big-name banks tack a monthly fee onto their savings accounts, and that fee might cancel out any benefit of a good interest rate. However, there’s usually a list of ways to minimize this fee or get around it altogether.

For example, as of this writing, TD Bank’s monthly fee for its Simple Savings account is $5. If you opt to receive your statements online only, that fee drops to $4. If you also open a checking account with the bank AND set a recurring transfer between the accounts of at least $25 a month, you get to avoid the fee for twelve months. Even better, if you can keep a balance of at least $300 in the account every day, you won’t get charged a fee at all. This account also has age incentives on it, so people under 18 or over 62 get their fees waived automatically, regardless of how much is in the account.

Whew! That’s a lot to absorb. And that’s just TD’s Simple Savings. That bank has a couple of other options for people with more complex money situations, but the fees and minimum balances of these are much higher.

Minimum Balance Fees

In the TD example above, we saw that a minimum daily balance of $300 would keep any Simple Savings customer from having to pay the monthly fee. This rule is fantastic until you spend a couple extra bucks and dip below that $300 mark. You’ll then be responsible for that fee for the month in which you slipped up. If you’re going to rely on a minimum balance to keep you from paying fees, you’ll need to keep careful track of the the money flowing out of that account. Keep an eye out for a bank with a low minimum balance.

Withdrawal penalties

Many banks have rules that cap the number of withdrawals you can make from your savings account. If you pull money out of the account more often, you might be slapped with a penalty fee up to around $10. Before you sign up for an account, know how often you’ll be allowed to withdraw money.

Early closing fees

Certain banks will charge a fee if you close your account before a certain date. Usually, this date is about 3-6 months from the day the account is opened, but the fee can be hefty — usually around $25. You should be sure that you can leave at least the minimum in an account until any waiting period is over.

Dormant/Inactivity Fees

Don’t let your money sit too long! Some banks will charge a fee of something like $5 if your savings or checking account has no deposits or withdrawals for a certain amount of time, often a year. This shouldn’t be a problem for a primary account, but if you switch banks, don’t forget to move your accounts within a year to avoid these fees.

Interest Rates

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Math. Can you do it?

High to low

Some banks will offer a fantastic, way-above-average interest rate to new customers. You might think you’ve lucked out, only to discover that the rate plunges after the first six months or year of your owning the account. This may or may not matter to you, but if you’re choosing a savings account based mostly on how much interest you expect to earn, make sure you read the fine print about how the interest rate will change over time.

Online vs Traditional

When we talk about banks, many people jump to the big names: Bank of America, Wells Fargo, SunTrust, etc. These banks follow the traditional model of having brick-and-mortar locations you can visit to do business, but they all offer online banking, too. The thing is, although these banks might seem like the best places for your money, they often offer some of the worst interest rates out there. They expect you to get excited if they give out 0.5% on a savings account.

So what’s the alternative? Fully online banks. Banks with no physical locations can offer interest rates double or more of the traditional banks’. The one major drawback to these accounts is that you must allow 3 or more business days for any money transfers out of them. Also, don’t go throwing your money into any online bank that flashes a pretty interest rate at you. These banks and their accounts still need to be analyzed based on the criteria above, but if you don’t care about having a big-name bank you can walk into, an online bank might be a good choice for you.

Bonuses

Banks are increasingly offering bonuses for opening accounts with them. Usually, these are chunks of money the bank gives you for opening an account and meeting some requirement(s), such as setting up direct deposit or depositing a certain amount of money. A nice bonus can make up for a lower interest rate, especially for smaller accounts.

Sources

The website MagnifyMoney.com allows you to compare accounts based on where you live and how much money you are looking to start the account with.  It also grades the banks based on how easy it is to understand their fine print, so you don’t get stuck signing a bunch of forms you don’t understand. It’s a quick, free way to see what’s out there. I recommend checking it out, and I’m not even getting paid to say that.

Nerdwallet.com regularly posts articles highlighting some of the best accounts out there. It’s also a wealth of information about all things financial. The folks there are also not paying me to talk them up, but they do good work.

Final thoughts

Clearly, there’s a lot to consider when choosing a savings account, but don’t let it overwhelm you. It’s better to have your money somewhere than nowhere, and if you decide you’d like to switch banks in the future, you can. Find a bank and account that fits your life right now, and get to saving!

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Ta da! I told you there’d be cuteness!

The 4 Types of Savers

There are a number of articles out there on “money personalities”. They usually break people into groups such as “savers” and “spenders”, but I would argue that they shouldn’t be mutually exclusive. Honestly, being able to say “I’m just such a spender,” simply provides an excuse for people to mismanage their money.

So, instead of finding your money personality, why don’t we look at saving personalities?

Natural Savers:

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These are the people for whom saving comes as easily as breathing. They never have to convince themselves that saving is worth it or force themselves to stick to a budget because they never overspend in the first place. They tend to be naturally frugal but don’t see it as a big accomplishment. It’s just how they are. Their savings accounts are usually well-stocked and they rarely run into money trouble. Natural savers get a thrill from saving money. They can be a little afraid of taking risks, though.

Goal-driven Savers:

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These savers may not find it as easy to save money as the natural savers do, but they get it done anyway by setting themselves a goal. Maybe they want to save up enough to quit their jobs and travel the world for a year, or maybe they just want to purchase a new game console or car. The point is, they need a goal to motivate them to put away money. These savers get their thrills from spending the money they’ve worked so hard to save and would probably be called spenders in normal money personality lists. However, they are still savers, and with the right motivation, can be just as successful at putting away money as natural savers. 

Fearful Savers:

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People who save because they expect the apocalypse any day now are fearful savers. These savers get excited about being prepared when the worst happens. They’re a little like goal-driven savers, but instead of saving to get something they want in the future, they save to avoid something they fear. For these people, the idea that they could lose their jobs or get sick is enough to make them sock away money. They may not love saving, but they know that if the worst does happen, they’ll be able to deal with it without the added stress of being broke. 

Reluctant Savers:

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People who save money only because they know they have to are reluctant savers. They tend to live in the moment, so neither positive nor negative consequences in the future will motivate them and they get no real thrill from saving. Of the types of savers, they are the most prone to being affected by peer pressure, which can be bad if people around them overspend all the time.  However, if they hang out with people who are part of the other saver types, this quality can work in their favor. Even without awesome saver friends, reluctant savers can be successful by setting up systems that save for them so they don’t have to think about it. Apps like Digit and Acorns are made for reluctant savers.

Notice that “Non-savers” is not on that list. That’s because not saving is not an option, folks. Everyone can and must save at least some money to have a healthy financial future.

What’s your saving style? Do you have any tricks you use to help you stash those pennies?

What is a savings account?

Ah, the good old savings account. This is often the only account most of us have or have even heard of before high school. A savings account is an account you can open with a bank. You put money into it, and it sits there, safely, waiting for you to need it. But what’s the big deal? Why is a savings account any better than stashing money in a piggy bank or under a mattress?

Two words: interest and insurance.

Interest

Unlike the money that sits in your piggy bank, money in a savings account earns interest. This means that the bank is loaning your money to people and paying you something as a thank you. Don’t worry, your money is still there and you can access it whenever you want. It’s just being used as part of the big pool of money the bank has to lend.

Sounds awesome, right?

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Free money!!

Well, this is a great arrangement for the banks, too, because they make the people to whom they loan money pay interest back to them, and that interest is a lot higher than what they pay you! Still, it’s fun to think of your money growing without you doing a thing except putting it in a bank.

You might have heard complaints about “low interest rates” in savings accounts over the last few years. It is true that the interest you earn on savings accounts is pretty tiny right now, but you’ll likely see interest rates rise and fall several times over your lifetime. Even a tiny interest rate is better than no interest, which is what you’d get from a piggy bank. Right now, the highest interest rates on savings accounts are around 1%. You definitely won’t get rich from your savings account, but, hey, it’s something.

Insurance

The second benefit of storing your money in a savings account is the insurance the bank offers on your money. Any money you put in a savings account (up to $100,000) is insured by the bank and stored in a fireproof safe. This means that if the bank goes out of business or burns down, you can still get your money back. If something happens to your piggy bank, though, that money is gone. Vanished. Kaput.

Something else money in a savings account is protected from? You!

If you are a spender, a savings account is your friend. Once money is in the savings account, the only ways to get it out are to physically go to the bank or ATM to get the cash or have it electronically transferred to another account, like a checking account. Most transfers take about three days to go through, which makes impulse spending difficult. It’s not foolproof, but by making spending your saved pennies difficult, savings accounts can help you break habits that keep you broke.

Know before you save

Ready to get a savings account of your own? Wait! There are a few things you need to know before you sign on the dotted line. Not all savings accounts are created equal. Learn about how to pick the right savings account for you and set yourself up for success in your saving journey.

If you want to know about other types of accounts, check out other articles in my “What Is…” series.

Why does L$G exist?

Learn, Save, Grow is the result of almost eight years of talking to American high school students and realizing that most of them have very little understanding of how money works.

Those of us who emerged from college into the Great Recession learned the hard way that money is not a guarantee, and what you do with the money you have is crucial to your success further down the line. Teens and young adults may not usually have buckets of money lying around, but they have the most valuable asset in the world: time. With time, even a small amount of money could make a big difference down the line.

In fact, starting to put away money earlier means you can actually put away less and end up with more money than someone who starts to save ten years later, but saves more. Crazy, right?

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Maybe not bags of coins, though…


In today’s digital world, there is so much information available about money, it’s easy to suffer from info overload and decide it’s not worth trying to understand it all. Learn, Save, Grow is designed to be a hub where the most important ideas are simplified and explained so you can feel more in control. Want just the basics? We’ve got them. Feel like digging a little deeper? We’ll do that for you. We’ll also get into apps and sites that might help navigate the world of money, but we’ll never endorse something we haven’t tried and loved ourselves.

If L$G can help even one person  find the motivation and confidence to save for the future, it’ll be a win. Let’s get started!