By Anis Qizilbash Selling is stressful, especially when you’re doing it for your own business and even more so if you hate it. When you’re stressed, you act from a place of fear, and in this fearful state, your brain is forced into primal fight-or-flight mode. During client interactions, this fear manifests as pushiness, desperation, and […]
The post How to Sell Mindfully and Without Being Pushy appeared first on The Work at Home Woman.
It’s time for dads to have their day.
Father’s Day is just around corner, and children, grandchildren, spouses and others are getting ready to spend.
American consumers are expected to spend a total of $15.5 billion this Father’s Day, setting a record high, according to the National Retail Federation.
This year, the average shopper will spend $134.75 on Father’s Day gifts. That’s up from last year’s average of $125.92.
So what exactly will they be buying to impress Dad?
It seems like a great bulk of spending this year will be on food, clothes and letting Dad pick out exactly what he wants, according to the National Retail Federation’s data.
Here’s the breakdown:
Though greeting cards is the category that draws in the least amount of spending, it is the most popular gift idea, with 64.3% of those surveyed saying they’d be buying one — or more.
Though these DIY card ideas were technically for Mother’s Day, if you want to use these ideas for your dad, we won’t tell.
Figuring out what to buy the dad in your life may be a challenge, but have you also thought about where you’ll buy it? According to the National Retail Federation:
Now there are still plenty of ways to show your love to dear ol’ dad without breaking the bank — or feeling obligated to spend $134.75.
Here are over a dozen Father’s Day gift ideas under $45. Grilling tools and beer seem like they would make many dads happy.
And according to the National Retail Federation, one out of four fathers surveyed said they would like a “gift of experience” rather than a material present.
So if your budget just isn’t having it, check out these 19 free ways to show appreciation to the dad in your life. They make not cost a dime, but they’re sure to bring a smile to Dad’s face.
Nicole Dow is a staff writer at The Penny Hoarder.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
It might be time to check in on grandma’s finances.
The CFPB’s monthly complaint report highlighted the most common problems reported by people ages 62 and older. This report breaks down the nearly 28,000 reports people in this age group filed in March to find trends.
Commonly reported financial problems included difficulties understanding changes to mortgage management, paying off credit card debt and accruing new debt, navigating banking services and recovering from scams.
The CFPB used information from people who voluntarily included their age when they filed their complaints. About 54% of those who file complaints include their age, the report said.
The greatest problem — accounting for nearly 9,000 of the 27,980 complaints filed in March — is debt collection.
According to the CFPB report, many people ages 62 and up said they rely on credit cards to cover unexpected expenses, like medical bills, that they can’t pay for with their fixed incomes.
The problem is often made worse when senior citizens don’t understand the terms and conditions of their new credit cards. The most detrimental misunderstanding is the difference between deferred interest and zero-interest cards.
“Months after charging these expenses, these consumers described being confused by the balances of their accounts,” the report found.
Adding to the financial stress, seniors tend to have more trouble keeping up with their finances when banks make changes to policies. For example, when banks no longer offer free paper statements or checks and encourage online banking, the change in banking routines can cause confusion.
Mortgage management is also a sore spot for many of the people ages 62 and up who reached out to the CFPB for help.
Those who are still paying off mortgages after retirement often struggle to pay off the last of the debt.
Many reported they didn’t understand changes after their mortgages were transferred to new lenders; others signed up for a reverse mortgage to cash in on the equity in their home without fully understanding the terms of the loan.
Those living on fixed incomes tend to be impacted most by the problems identified by the CFPB.
These financial problems only get worse if they go unchecked and in many cases only get noticed when someone else checks their finances.
Exacerbating the problems, a new study shows that Social Security benefits are not rising to keep up with the cost of expenses like health care premiums, prescription drugs and housing costs.
The Social Security study was conducted by the Senior Citizens League, a nonpartisan organization that works to protect the benefits and rights of senior citizens.
It found that the average Social Security benefit is about $1,320 per month, while recipients need $1,518 on average to afford basic expenses and maintain the buying power they had in 2000.
This is your cue to stop what you’re doing and call your grandmother. She will probably be happy to hear from you, and so will her bank account.
Desiree Stennett (@desi_stennett) is a staff writer at The Penny Hoarder.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
A few days ago, I was reviewing my credit card bill and I noticed some expenses that surprised me. Two of them were annual renewals for services that I rarely use and honestly hadn’t really thought about in weeks, or even in months. Some of the other ones were for silly little things that I honestly didn’t even remember doing because that spending had been so automatic and thoughtless.
Those little expenses added up to well over $100, and that really troubled me. That money essentially vanished into thin air because I had been utterly thoughtless in my spending. It wasn’t being used for anything really meaningful or valuable in my life. Perhaps at one time those things had been meaningful or valuable, but they really weren’t at this point.
The truth is that all of those expenses had become “stale spending.”
“Stale spending” is a term I like to use to describe any and all expenses that are no longer meaningful and have become routine and thoughtless. If I’m spending money on something (beyond a core, highly essential item) without any real thought, then that spending has become “stale” and deserves to be reconsidered. Quite often, your life is better off without that stale spending, because at that point it’s become purely a money leak, causing dollars to drain out of your life without returning any real value to you.
Of course, there are times when “stale spending” is something that you want to keep in your life, but in the simple process of carefully considering that spending, you’re refreshing it and making it new again.
So, how do you find “stale spending” and how do you root it out of your life? Here are several strategies that work well.
This is a wonderful strategy that I’ve started using in the past several months and it’s helped me to identify and eliminate some subscriptions that weren’t providing any real value to me before those subscriptions renewed.
It’s really simple. Just start a note for yourself somewhere where it’s easy to retrieve (I use Evernote for this, for these reasons) and in that note, list all of the subscriptions you have, what they cost, and the date when it will renew (or need to be manually renewed).
So, for example, let’s say you’ve signed up for an annual subscription to Evernote Premium and it renews on Nov. 2. You’d simply list “Evernote Premium” followed by the dollar amount of the subscription and the date, Nov. 2, as one entry on the list. All other entries would follow the same pattern.
Once a month or so – I actually have this as a monthly recurring to-do on my to-do list – go through that list of subscriptions and ask yourself whether that subscription is really giving you value. Focus in particular on anything that’s recurring in the next month or two. Ask yourself seriously whether that subscription is really giving you any value in your life at this point and, if it isn’t, immediately go and cancel the subscription.
If you’re not sure whether it’s giving you value or not, ask yourself whether or not that subscription has actually been used by you in any memorable or significant way recently. Are you actually reading that magazine, or are you just a fan in concept and the issues are piling up on your end table? Are you actually going to the gym, or have you convinced yourself that just having the option to sometimes maybe go to the gym is worth a huge dollar amount each month or year?
As you switch to this simple system, you’ll probably have a subscription or two that slips through the cracks – Netflix, maybe, or a magazine subscription or something. Don’t sweat it or beat yourself up over it – just add that subscription to your list as you discover it from a credit card statement. Eventually, this list will contain all of your subscriptions and it will be a very valuable review tool.
Similarly, when you decide to start a new subscription of some kind, add it to this subscription review list immediately so that you can evaluate it later when the subscription is about to renew.
A subscription review list can be an incredibly useful tool for keeping routine and automated spending in check, eliminating the things that don’t bring you value and keeping the things that do. (In fact, if I had those two subscriptions I mentioned at the beginning in my subscription list, I wouldn’t have been dinged automatically for their renewal…)
This is such a simple core financial step that everyone should be taking. You should be walking through your financial statements each month when you receive them and evaluating each and every item that’s on there. It’s an invaluable tool, not only for your overall financial awareness, but because it is so useful for dredging out stale spending.
It’s really simple. Just go through your bill and highlight any and all items on there that you don’t immediately recognize and see as something useful and worthwhile. If you don’t recognize it, highlight it. If you can somewhat guess what it is but it’s not bringing up any specific memories, highlight it.
Once you’ve highlighted those items, start walking through them one by one. For each item, do your best to figure out exactly what the purchase represented. Then, ask yourself whether or not that specific purchase brought any real value into your life, or whether it was something you did almost automatically without thinking about it.
For example, whenever I see a charge from a gas station that isn’t around the usual amount that I spend fueling up (I usually pay at the pump and only go inside to use the restroom if needed), I immediately highlight it and evaluate it. What did I buy there? Why did I buy it? Was it something bought completely without thought or completely due to a routine? Did I get any real value out of that purchase? What could I have done differently?
This exercise is meant to point out specific things that you’re doing where you’re spending money without really thinking about whether or not that expense adds value to your life. Reflecting on that choice now, when you’re sitting outside of the actual spending situation and you’re looking at the money you spent, gives you the chance to really decide if that purchase was worth it or not.
If you find that it wasn’t worth it, then ask yourself what you can do to cut out that stale purchase going forward. What exactly can I do to avoid buying a salty treat at a gas station? When I’m on a road trip, I tend to crave salty things and I’ll often end up buying a bottle of water and some salty snack without thinking about it. How can I avoid that? One way is to simply make sure that I’ve packed a salty snack to take with me on that trip, along with plenty of water. That way, I can still have that salty snack and water that I crave without paying the crazy high impromptu gas station prices. In fact, I’ve even started keeping a couple such snacks in the glove compartment in case I forget and I leave an empty water bottle in the car, too.
Another thing to look for as you’re moving through your bank statement or credit card statement is frequently recurring expenses. Obviously, there are some expenses that recur out of necessity; you’ll probably find several grocery store visits on your list. At the same time, you may find yourself identifying some recurring purchases that aren’t quite as essential and actually represent fairly frivolous purchases. Things like coffee shop visits, hobby shop visits, after-work stops at a fast-food joint for a quick snack, routine expensive lunches, and so on are all things that can crop up in the midst of such a review.
Whenever you see such a recurring expense, you’ll probably find yourself remembering some of them and not others, and that’s fine. The question isn’t a black or white question of whether you should completely eliminate this expense from your life, but whether it might make sense to eliminate the “stale” instances of this routine. For example, you might really get some personal value out of a coffee shop visit or a lunch with coworkers once or twice a week, but the rest of the time, it’s kind of done out of a routine and you don’t really think about it.
Try putting a sensible cap on that spending. Restrict yourself to a smaller number of those expenses in the coming month, striving to eliminate just the stale and thoughtless expenses and keeping the ones that really add value.
This requires some regular focus on what you’re doing, so what I like to do when I’m constantly evaluating my own choices during a period of time is to add a reminder to my to-do list that simply says, “Think about whether you should be doing X today,” and changing X to whatever habit I want to be mindful of. I leave that on my to-do list as an urgent thing all day, so I see it several times, and it keeps that concept front and central in my brain. At the end of the day, it’s an easy thing to cross off my to-do list. I call this a “mindfulness to-do”; it’s just a reminder that I want to be mindful of something specific during the day.
Whenever you go grocery shopping, grab that receipt and toss it in your pocket. Then, a day or two later, sit down with that receipt and go through it item by item.
Don’t worry about the items that came off of your grocery list – those were carefully considered already. Don’t worry about the items that you actually thought about for a while in the store – those were considered, too.
Instead, look for items that were impromptu buys, items that wound up in your cart without you really thinking about whether those purchases made sense. Look for items you snagged in the checkout aisle or out of a cooler without thinking about it at all, just as a matter of routine. Think of snack items that looked tasty and bounced straight into your cart without thinking about it.
That’s pure stale spending, right there. Those items were bought reflexively, without any real thought, and aren’t all that meaningful or valuable. It’s just another typical snack item or just another beverage to drink on the way home, nothing special, nothing memorable. It’s just money that goes away without leaving a trace in your life.
Total up the cost of all purchases like that, then ask yourself what you could have done with that money instead, things that are actually meaningful for you. Even if you spent that money on other non-essential items, at least those items would have been worthwhile and impactful instead of nearly forgotten as soon as the money was spent.
Then, the next time you go to the store, remind yourself of the mistakes you made during your last shopping trip. Remind yourself of the $20 or $30 or $50 that just evaporated the last time you went to the store. When you consider tossing something in your cart, ask yourself if it’s really adding anything to your life. If you like to eat a snack on the way home from the store and really value that treat, take one with you before you go and leave it in the car while you’re inside – a Thermos with homemade coffee in it is way cheaper than a Frappuccino from the cooler, for example. If you really value having a salty or sweet snack on hand in the cupboard or the freezer, think about it before you leave and put it on your list. Make sure the things you buy are actually meaningful and have a real positive impact on you.
One of the real challenges when it comes to stale spending is figuring out whether a nonessential purchase that you actually enjoy is actually stale or not. For me, a purchase is stale when I’ve stopped considering what value I actually get out of the purchase and just accept that I’m getting something positive when I spend that money.
A great example of this, for me, comes from bookstore visits. When I go into a bookstore, I enter a wonderland of temptation. I know this and am aware of it, so I usually enter a bookstore only when I’m looking for a particular book or have a gift card or something akin to that. Of course, given that I’m so easily tempted in there, I often find myself picking up more books and talking myself into buying them.
The thing I should be asking myself, though, is whether I merely want to read that book, not to buy it. The value in that book from a reading standpoint is the content between the covers; the value in owning it is solely as a collectible or as a reference. What that means is that if I merely want to read a book I’m unfamiliar with, I’m better off getting it from the library. Even if I suspect I may end up wanting it as a reference volume, I should still wait until I can visit the library first, take the book home from there, evaluate it, and then decide if I want to permanently own it for reference.
In other words, I ask myself what additional value I am guaranteed to get from owning this book rather than just borrowing it first and then deciding to own it later. Unless the price is absurdly low, I usually can’t come up with anything at all. I get virtually all of the value out of a “first reading” of a book by checking it out from the library. I can then buy it later if I decide the book has enough value that I want to have it around for reference.
Take that same philosophy and apply it to almost every non-consumable purchase that you make – books, Blurays, tools, equipment, and so on. Can I get the value I need out of this by just borrowing it? Simply asking the question keeps the purchase from being a stale reflex purchase, where you’re just buying something because you perceive a need or want in your life in the most shallow way possible. Ask yourself a bit more, figure out what that need or want actually is, and then ask yourself if you can just borrow something to fulfill that need instead of buying it.
You can actually engage yourself in a very similar thinking process with almost everything consumable that you buy, too. In that case, it’s difficult to strictly borrow the item – you can’t really return something that you consume – but you can often find a much less expensive way of getting that item in your hands or into your belly.
I like to use the example of coffee here. I like drinking a cup of coffee in the early afternoon. It helps me extend my ability to focus well into the latter part of the day, especially when I pair it up with a cup of green tea shortly afterwards (I get the focus benefit of a highly caffeinated drink, but the tea takes away the jittery side effects).
Now, there’s a splendid little coffee shop about three blocks from my house that I often walk by when walking our family dog or getting some exercise and it is really tempting to just jump in there for a cup of coffee. However, when I think about it a little more, I realize that most of those visits only produce the value of one cup of coffee for a $5 or $6 price tag. I can go home, open up a container from the fridge, pour myself a big cup of coffee, warm it up in the microwave if I want it hot (I usually don’t), and enjoy it at home for about 10% of that price. (I just make sure to make a regular batch of cold brew coffee every few days.)
The same thing is true for my wife in the mornings. She could certainly stop at a coffee shop on her way to work to get a pick-me-up, but most mornings she just makes herself a small pot of coffee and fills up a to-go cup and a thermos with that coffee with just the sweeteners and additives she likes for a tiny fraction of the cost of what a coffee shop stop would set her back, and it’s just as fast because she’s not waiting in a drive-thru.
We both value that cup of coffee sometimes. However, we know we can get that value way cheaper at home.
So, do I ever go to a coffee shop? Sure, but when I do, I go there for the experience. I’ll buy a cup, but then I’ll spread out on a table with my laptop and some materials and get some work done in a different environment, which often spurs creativity. To me, that’s the additional value I get from buying it at a coffee shop. If I’m just grabbing a cup from a coffee shop without thinking, it’s a stale purchase because I’m not getting any value that I couldn’t easily get at home. It’s just a thoughtless, stale reflex.
Apply that philosophy to your own purchases. Are you going out to eat out of habit? Why not just prepare something similar at home for a fraction of the cost? If you do it smartly and build some cooking skill, it doesn’t take long and it doesn’t require much cleanup for most simple dishes. Are you going to the movies out of habit? Why not watch one of a million movies in your collection or on Netflix at home? You can just wait a month or two and that movie you’re thinking about will be available for rent or streaming, so you’re really just paying a big premium for a few months of impatience.
Stale spending happens when you get so used to making a purchase that you check out of the process mentally and just trust the rhythm of routine and instinct. When that happens, you open the door to lots of spending mistakes, where you’re spending money on things that aren’t really delivering a good value to you.
It’s well worth your time to step back and look for stale spending in your life. By all means, don’t cut away at spending that isn’t stale, but ask yourself that question about the ways in which you spend your money and you might find that you can trim your spending really easily without cutting out anything meaningful.
Good luck!
Related Articles:
The post Six Strategies for Deleting Stale Spending from Your Life appeared first on The Simple Dollar.
After spending spring in political limbo, the so-called fiduciary rule is finally going into effect Friday, June 9.
This long-awaited retirement investment adviser scout pledge formalizes the duty of financial advisers act in the best interest of their clients.
Previously, investment professionals were held to the less stringent “suitability standard,” which only required that financial advice meet your needs based on your investment profile.
Under the suitability standard, your broker could recommend an investment plan that’s OK, but puts you at greater risk than you’re comfortable with. Or, you could get backed into an investment that’s not a great fit just so that your adviser can get a commission.
At first glance, it might seem like there’s not much for you to do in response to the new rule. But now is an ideal time to check on your investments — and make sure you have investments you’re satisfied with.
Mike Chadwick, president of Connecticut-based Chadwick Financial Advisors, said that investors whose accounts were managed by fee-based firms are likely in better shape than those who, until now, worked on a commission basis.
He’s gotten calls from people who managed their modest IRAs and other retirement accounts through big, national commission-based firms. Instead of converting small accounts to fee-based ones, those clients are being asked in some cases to close their accounts entirely.
“They can’t offer a solution at a [balance] threshold that low,” Chadwick said.
You may be able to stay on if your commission-based account is eligible for a Best Interest Contract Exemption (BICE).
Chadwick said it’s a good time to review your investment accounts and make sure your financial adviser meets your needs.
“Make sure you know what you’re buying inside of what you own,” he said.
Don’t just look at your financial firm’s policies – do a review of how your money is being invested, as well.
The Obama administration’s long-term project with the Department of Labor was set to begin in April, but President Donald Trump signed an executive order in February to delay the fiduciary rule.
Trump feared it would reduce options for investors and stifle investment professionals. His executive order directed the Department of Labor to review and potentially revise the rule.
Many financial firms had already prepared for the change by adjusting their own commission policies or adjusting from fee-based programs to flat-fee setups. While June 9 is remarkable on paper, the past few months of preparation may have had a greater impact on many financial advisers.
Meanwhile, brokers and insurance agents don’t have to comply with parts of the rule until Jan. 1, 2018.
The Securities and Exchange Commission is soliciting feedback to guide its own potential rule proposal for retail investments, which may include stricter conflict-of-interest guidelines.
Lisa Rowan is a writer and producer at The Penny Hoarder.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
As the weather warms in spring, you might give your home an annual deep clean to clear out the remnants of winter. But I believe the phrase and practice of spring cleaning shouldn’t be limited to your home. If it’s been a while since you checked up on your credit reports, you may find that they’re in need of some attention.
In all seriousness, your credit reports and scores have a huge influence over your financial life. Just sitting back and assuming your credit is in decent shape is a dangerous approach. I strongly suggest you follow these five steps, none of which will cost you anything more than a few minutes of your time, to give your credit a thorough cleanup.
Step one is to check a copy of all three of your credit reports. It is practically impossible to build an effective plan to improve your credit without first understanding the current condition of your credit reports. Thankfully, it’s easier than ever to get copies of your credit reports.
You have a lot of options when it comes to where you can access your credit reports and scores. First, you can claim a free, no-strings-attached copy of all three of your credit reports once every 12 months at AnnualCreditReport.com. There are also many free and fee-based credit monitoring services which will offer you access to some or all three of your credit reports and scores. I’m a firm believer that if you’re entitled to free credit reports, you should claim them all.
After you’ve secured copies of your three credit reports, it’s important to see if there are any errors. In other words, you should check every line of your credit reports for mistakes. If you discover inaccurate information on any of your credit reports, then you have the right to dispute the validity of those items with the credit reporting agencies (CRAs), at no cost.
Once you’ve initiated a dispute with a CRA, they will have to investigate your claim. The disputed item must either be validated by the data furnisher (the company that reported the information to the CRA in the first place) or deleted from your credit reports, generally within 30 days or less.
One of the most actionable ways to polish up your credit is to work on paying down your credit card balances. FICO and VantageScore, the two most commonly used credit scoring models, focus on your credit card accounts and how much of your credit limits are utilized in the form of a balance.
The higher your balance to credit limit ratio climbs, the lower your scores will fall. Paying down – or, better yet, paying off – your credit card balances will not only save you money in interest fees, but can also give your credit scores a nice potential boost as well.
In addition to information about your account management habits, your credit reports also contain a lot of personal information as well. For example, your name, date of birth, Social Security number, past and present addresses, and your employer all might be found on your credit reports.
The personal information section of your credit reports will not impact your scores in any way. However, if you have addresses that do not belong to you, or an incorrect date of birth, name, or Social Security number, it could possibly be a sign of a problem such as attempted identity theft.
Disputing incorrect personal information with the CRAs is a good idea to clean up any mistakes in this area of your credit reports. Point being, getting your personal information correct should be easy.
Like cleaning your house, checking your credit reports really shouldn’t be limited to just once a year. That’s like checking your bank statements or credit card bill once a year. Even twice a year is not enough. With so many websites offering you free or inexpensive access to your credit reports and scores, there’s really no reason you can’t make a plan to easily track your credit reports at least on a quarterly basis, if not monthly.
I’m a firm believer that you should check your reports monthly. Here’s why: Every 30 days, your credit reports go through a series of updates from all of your active creditors. As such, every month your credit reports are going to look different than they did the month prior. I’d want to see those changes every month, just to make sure they’re all correct.
Related Articles:
John Ulzheimer is an expert on credit reporting, credit scoring, and identity theft. He has written four books on the topic and has been interviewed and quoted thousands of times over the past 10 years. With time spent at Equifax and FICO, Ulzheimer is the only credit expert who actually comes from the credit industry. He has been an expert witness in over 230 credit related lawsuits and has been qualified to testify in both federal and state courts on the topic of consumer credit.
The post Spring Cleaning for Your Credit appeared first on The Simple Dollar.
Maybe you’re looking for a lucrative place to invest your money.
Or maybe you’re looking for a loan to help you pay down high-interest credit cards, start your own business, or dig a swimming pool in your backyard.
Either way, it’s high time for you to check out the world of peer-to-peer lending, a financial phenomenon that’s been spreading like wildfire.
Peer-to-peer lending platforms like Lending Club and Prosper allow people to apply for credit from the general public.
Borrowers can access small or large amounts of money ($1,000 to $40,000) from groups of people who each invest a little bit — as little as $25 — into their loan. (This is also known as “social lending.”)
These rapidly growing companies offer investors another way to diversify their portfolios and earn monthly interest, while helping borrowers get better interest rates than they’d get from a traditional financial institution.
Lending Club and Prosper pretty much dominate this market. As of this writing in mid-2017, the companies have loaned out $26 billion and $9 billion, respectively.
Here’s our rundown of how each company works for borrowers and for investors.
Before we delve into the details, let’s talk a bit more about social lending.
By directly connecting individual lenders and borrowers through online marketplaces, peer-to-peer lending (P2P) effectively cuts out the middleman of the traditional lending process. Of course, the “traditional” way is for financial institutions take a hefty cut as they manage the transfer of money from lenders to borrowers.
The P2P process is more streamlined and efficient, eliminating the need to maintain hundreds of physical buildings like your local First National Federal Trust Capital CitiBank of America does. For borrowers and investors, P2P can be a win-win because it reduces costs and hassle for both parties.
Prosper and Lending Club are pioneers in this field, having been founded in 2006 and 2007, respectively.
“Think of them as eBays for money,” says Consumer Reports. “Just as eBay brings buyers and sellers together, peer-to-peer platforms bring borrowers in need of loans … together with investors who want to earn better returns than those offered by banks.”
What kind of loans do they offer? According to the Federal Reserve, more than half of all P2P loans are debt consolidation loans, followed by credit card payoffs (17%), home improvement (8%), and small business loans (3.5%).
If you’re looking for a P2P loan, which company should you choose?
For starters, I suggest checking your interest rate at both Lending Club and Prosper to see which offers you the lowest rate. That’s a good starting point, but you shouldn’t stop there.
No matter which way you go, know that these two websites are a lot alike in important ways.
Applying: You’ll fill out an online loan application, answering the usual questions about your age, employment, income, etc. Each will check your credit score, but this won’t affect your credit rating the way it does when you apply for a typical loan. (This credit check is a “soft inquiry.”)
The basics: Both sites offer 3- to 5-year loans, both have similar loan amounts. Lending Club has loans from $1,000 to $40,000, while Prosper has loans from $2,000 to $35,000.
Interest rates: Like any lender, your chosen P2P platform will assign you an interest rate based on your credit score, income and payment history. Lending Club’s rates range from 5.99% to 35.89%, while Prosper’s rates range from 5.99% to 36%, pretty much identical.
The process: Your loan will get posted on the company’s website. Individual investors browsing through lists of loans will be able to choose your loan for their portfolios. They’ll decide how much of it they’d like to fund, starting with as little as $25. This fraction is called a “note.”
Are P2P loans safe for borrowers? Once your loan attracts enough investors and is fully funded (this happens quickly), Lending Club or Prosper transfer the total to your bank account. As you make payments each month, that money gets funneled back into your investors’ accounts.
Fees: Both companies charge you a fee for taking out a loan. Lending Club’s fees range from 1% to 6%, while Prosper’s fees ranges from 1% to 5%. Once again, they’re pretty comparable.
For most loans, the fee will be 5% of the loan amount. Borrowers with great credit pay lower fees.
Now that we’ve laid the groundwork, let’s help you make your decision.
The first thing you need to know: What’s your credit score? One way to get that number is to sign up with a free service like Credit Sesame.
This might make your decision for you: Lending Club’s minimum credit score for a loan is 660. However, Prosper will make loans to people with scores as low as 640.
If you’re still trying to choose between the two, get out your calculator and a scratch pad. Here’s the complicated part. It involves math.
Lending Club may have lower rates for you. A number of reviewers comparing the two websites have found that Lending Club offered them a better interest rate than Prosper.
(I’d tell you what rates I was offered, but to be honest my credit is currently too lousy to qualify for a loan from either site.)
However, your results might be different. The YMMV rule applies here: Your Mileage May Vary. Just keep in mind that a difference of only 1% or 2% could cost you a tidy sum over a 3- or 5-year loan.
Prosper may have lower fees for you. If you have really excellent, awesome credit — unlike me — Prosper might offer to charge you a fee of just 0.5% instead of its usual 1% to 5%. For a big loan, that could save you hundreds of dollars.
Lending Club and Prosper each are regulated by the feds — specifically, by those super fun kids at the SEC, the Securities and Exchange Commission. But it’s still up to individual states to decide whether to let them operate in each state.
In most states, you’re good to go.
However, you can’t borrow from Lending Club if you live in Idaho, Iowa, Maine, Nebraska or North Dakota. You can’t borrow from Prosper if you live in Iowa, Maine, North Dakota or Pennsylvania.
You can’t invest in Lending Club if you live in Alaska, Maryland, New Mexico, North Carolina, North Dakota, Ohio or Pennsylvania. You can’t invest in Prosper if you live in Iowa, Maine, North Dakota, Pennsylvania or Vermont.
Man, North Dakota is tough.
Hey, did you just hear that noise? Kind of a cranking sound?
That’s the sound of this story suddenly shifting into a higher income bracket.
Fair warning: You need a pile of money to read this part.
To qualify to invest with Lending Club, you must earn at least $70,000 in annual gross income and have a net worth of at least $70,000 (not counting your house or car). Or you must have a net worth of at least $250,000. Prosper has the exact same requirements.
Despite those requirements, Lending Club and Prosper keep attracting growing numbers of investors. That’s because they typically offer better returns than, say, investing in a CD.
Lending Club boasts historical returns of 5% to 7%. Prosper boasts average returns of 8%. Each has a detailed prospectus online, and the entire loan history for each is available for download. This independent analysis found annual returns of 4.9% to 9.9%.
Kyle Taylor, founder and CEO of The Penny Hoarder, invested in P2P lending and found it rewarding. He initially deposited $5,000 in a Roth IRA with Lending Club, and found himself “earning a crazy good 14% interest rate on my deposit.”
While Lending Club or Prosper shouldn’t be your only investment, either or both can be a solid, diversifying addition to your portfolio.
As with most investments, you should enter into the P2P lending sphere with a long-term wealth building mindset. If you employ a day-trader-type strategy — buying and selling stocks frequently — then a service like Lending Club or Prosper might not be for you.
Worried about borrowers defaulting on their loans? Each company evaluates borrowers’ credit scores and assigns them a grade. To avoid defaults, only choose the highest-graded, lowest-risk loans — as long as you understand that you’ll be earning less interest on those.
Diversify, diversify, diversify. Both companies make it easy to diversify your investments. By loaning, say, $25 to 50 different borrowers instead of funneling that same $1,250 to just one borrower, you spread out the risk of loan defaults.
Automated Investing: On either website, investors who want a piece of a wide cross-section of loans can spread around their nest egg with just a few clicks.
Simon Cunningham is the founder of LendingMemo, a financial advice website that focuses on the P2P lending industry. He’s been watching this industry for years.
Here’s his advice: “Let me say from the outset: Most new investors will probably want to open their first account with Lending Club. However, there are some honest reasons someone might choose Prosper instead.”
For investors, here are the biggest differences between the two companies:
Their websites. Both websites have evolved over the years, but some beginners still say they find Lending Club’s website simpler to navigate.
Lending Club has more loans. It generally has far more loans to choose from than Prosper does. At Lending Club, investors say they typically find it easier and faster to spread around their money by investing in dozens of loans at a time.
Prosper has a greater percentage of high-risk loans. Prosper has more risky, high-interest loans because it loans to borrowers with credit scores as low as 640, while Lending Club cuts it off at 660. For investors willing to assume some risk, those loans can be a lucrative investment.
Prosper offers better returns. Larry Ludwig, founder of the financial advice website Investor Junkie, analyzed both companies’ investment returns from 2009 to 2014. He found that Prosper’s annual returns ranged from 6.6% to 9.9%, while Lending Club ranged from 4.9% to 8.8%.
“Prosper edged out Lending Club for five of six years and tied with it the other year,” Ludwig says.
Minimum Investment Flexibility: Both sites will let you invest in any particular loan starting with a minimum of $25.
Here’s the difference: With Lending Club, you have to invest in multiples of $25 — like $50, $75, $100, and so on. But Prosper allows you to invest any sum of at least $25 or more. You could invest $26 or $30 or $40 in a loan if you wanted to.
Cunningham offers the following advice:
“Because of their easier website and longer list of available loans, most investors will probably want to open their first account with Lending Club. Elements of their site, such as their simple and powerful automated investing tool, successfully make peer-to-peer lending an easy and rewarding experience for almost anybody who wants it.”
“In contrast, Prosper will appeal to people who want precisely filtered loans … or those who want higher potential returns/risk.”
No matter which way you go, many market analysts say you’ll be in good shape.
Marc Prosser, founder of financial news website Learn Bonds, wrote this on Forbes.com: “I believe the business fundamentals of Lending Club, Prosper, and other peer-to-peer lenders are strong.”
However, Ludwig won’t make a recommendation between Lending Club or Prosper.
Instead, his advice is simple: “I encourage every peer-to-peer investor to research each company, take a look at their platforms, and get a feel for which one you prefer.”
Disclosure: This post contains affiliate links. May we all be a bit richer today.
Disclaimer: This article contains general information and explains options you may have, but it is not intended to be investment advice or a personal recommendation. We can’t personalize articles for our readers, so your situation may vary from the one discussed here. Please seek a licensed professional for tax advice, legal advice, financial planning advice or investment advice.
Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He’s working on improving his credit rating.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
For years, UK equity income funds have been bestsellers, and many have chugged along steadily producing annual yields of around 3% to 5%. However, there are strong arguments for income-seekers to diversify globally, particularly at this juncture.
High-yielding stocks in the UK stand at inflated prices, and analysts are warning they may be forced to slash payouts to cut costs. Moreover, the prospect of a strengthened Conservative government after the general election has sent sterling higher, reducing the attractions of large domestic exporters, many of whom are big dividend payers.
Over recent periods the global equity income sector has consistently outperformed its UK counterpart in terms of total returns, returning 23.5% over one year and 36.1% over three years to 2 May, compared with 16.5 and 23.4% respectively for the UK equity income sector.
Several consistently outstanding global equity income funds offer plenty of options for investors. Your choice will depend on how you wish to diversify geographically and which sectors you favour.
Yields from the US S&P 500 index are lower than those from the major European markets, which tend to average around 3.5%.
Yields on Asian stocks are around 2.5% a year, but they offer greater opportunity for capital gain because they are on lower valuations. Furthermore, Asian companies are not suffering supply cost inflation and should continue to generate the free cash to pay dividends.
But care needs to be taken when running the rule over the Investment Association’s global equity income fund sector. Some funds are heavily slanted to the US, which carries a 47% weighting in MSCI’s World High Dividend Yield index; six of the top 10 global equity income fund performers over the past three years to 2 May have a weighting of 40% plus to the US. While there is nothing wrong in having a meaty position in the US, it is widely viewed as expensive; moreover, investors may prefer a manager that sticks less rigidly to a global index.
For those who wish to buy more than one global equity income fund, there is also the risk of putting all their eggs in the same basket. Investors should therefore look under the bonnet to ensure they are getting an adequate amount of diversification on a geographic level.
Global funds that hold less in the US
To that end, it’s worth looking out for funds that make a point of holding less in the US, including Artemis Global Income, which is a member of the Moneywise First 50 Funds.
Artemis Global Income fund, managed by Jacob de Tusch-Lec, continues to favour Europe, where valuations are much cheaper than the US. As well as being light on US exposure, Mr de Tusch-Lec keeps the fund’s UK content relatively low. For income investors seeking diversification, therefore, it will complement existing UK equity income holdings.
Baillie Gifford Global Income Growth is another fund that makes a point of holding less in the US. The fund’s manager James Dow argues that the US does not have a culture of big dividend payments, so the fund has just 30-35 per cent in the region; but it is overweight Australia and Brazil, where the dividend culture is more entrenched.
Mr Dow also likes UK companies such as WPP and Experian, which have global exposure but are quoted in London, where boards are committed to a progressive policy on dividends through good times and bad. “The basis of what we’re doing is trying to find companies that can continue to grow on a five-year-plus horizon,” he says. “Oil companies in particular need to put billions back into the ground just to stand still. BP and Shell are so capital-intensive that they have to borrow.”
This is an edited version of a story that first appeared on our sister website, Money Observer.
By Holly Reisem Hanna The other day I was at the grocery store and I noticed a woman scanning items with her smartphone. As a user of moneymaking smartphone apps, I decided to ask her which one she was using. She told me that she was shopping for Shipt which is a smartphone app/platform that […]
The post 17 Flexible Ways to Make Money With Your Car appeared first on The Work at Home Woman.
Teens in America aren’t working like they used to — but there’s a reason for that.
Teens (16- to 19-year-olds) are no longer participating in the age-old tradition of busting their butts for minimum wage in a greasy burger shack all summer long, according to an article recently published by Bloomberg.
Instead, the article states that according to the Bureau of Labor Statistics, the U.S. Labor Force Participation Rate for 16- to 19-year-olds has dropped from about 55% in the year 1977 to a much lower 35% in 2017. By 2024, that number is expected to drop below 27%.
But before you go on a fist-shaking, spittle-flying, “young-people-these-days” rant, let’s take a look at why teens are less interested in working during the summer months.
The article proposes a few theories as to why the teen work force participation is dropping so steadily:
All valid reasons, and all probably play a small part in the bigger issue, but the article offered one final theory.
Apparently, teens aren’t working these days because they’re doing something else instead. (Graffitiing overpasses? Hanging out in malls with their parents’ credit cards? Laying in bed all day playing around on those *gasp* blasted smartphones?!)
No, no and no.
Teens are spending their summers studying and going to school.
High school-aged teens are taking more (and tougher) classes than teens in the 1980s did, and college-aged teens are doing multiple internships (the new standards of competition say they should complete upwards of three) and are often required to take summer courses in order to graduate.
But, as Bloomberg points out, a summer job is more than just a way to make a buck. It’s also a way to expand a teenager’s world view and teach them the basics of money management and how to function in a work environment.
The issue, then, is finding a job that works with a busy student’s schedule (and one that pays more than minimum wage couldn’t hurt either, what with the laughably painful cost of college these days).
Luckily, we here at The Penny Hoarder care quite a bit about two things: jobs that don’t make you want to tear your hair out and making money.
If you’re looking for a flexible summer job, start with this list of 100 summer jobs for teens. With everything from plant sitting to performing at birthday parties, there’s probably a job or two here that you could fit in around your hectic class schedule.
If you’re spending the summer on campus, try one of these 13 online jobs for college students that you can do from the comfort of your dorm room (or, sign up to become a Campus Sherpa)!
If you’re looking for a side hustle that you can use to earn extra cash on your own time, check out these 25 simple ways to make money in college — without dropping any classes.
And if you still need a little help with tuition so that you don’t end up drowning in student loan debt, here are 100 awesome scholarships that can help you pay for college.
Grace Schweizer is a junior writer at The Penny Hoarder.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
If you’re counting on student loans to pay for college in the fall, you’ve probably already navigated the FAFSA. We hope you’ve also started to think about your repayment options.
After the FAFSA, you’ll receive an offer letter letting you know how much you’re eligible to receive. You’ll have to choose how much money to actually accept.
Have you considered what you’ll do if you get more money than you need?
Bet you haven’t — because that hardly sounds like a problem.
It could be, though. Any money you borrow needs to be paid back, probably with interest.
My financial status going into college meant I was eligible for a lot more aid than I needed to cover tuition. I took it all, and now I’m $58,000 in debt.
Here are two important warnings I wish I’d known back then to avoid racking up so much debt:
You can receive some of your financial aid without accepting all of it.
It’s tempting to take everything if you’re awarded more than you need — it feels like free money!
Putting yourself in debt, though, is sooo not free.
Unless you need the relief, don’t consider this an excuse to avoid working.
If you can cover living expenses by working while you’re a student or over the summer, you’ll avoid a lot of hassle and cost in loans.
Decide how much help you reasonably need to cover your tuition and expenses each semester and how much you’ll be able to contribute from savings or wages.
Then accept financial aid awards in this order:
If you accept the money, only to realize when a refund check arrives you don’t need it… you still don’t have to spend it.
Would it be nice to fund your friends’ spring break trip or go on a shopping spree? Of course. But you’ll pay for that extravagance exponentially down the line, and it may not seem worth it in retrospect.
(Or, maybe it will. Your call. But I’m telling you this now, so you can make an informed decision instead of one you’ll regret later.)
Learn from our mistakes — here are the irresponsible things Penny Hoarders did with their student loan refunds.
You’re about to embark on an exciting leg of your journey. Some even call college the best years of our lives.
Just… please make smart financial choices now so these years don’t live to haunt you forever.
Leave that job to the tattoo you get around your ankle sophomore year.
Dana Sitar (@danasitar) is a senior writer at The Penny Hoarder. She’s written for Huffington Post, Entrepreneur.com, Writer’s Digest and more, attempting humor wherever it’s allowed (and sometimes where it’s not).
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
Car dealerships are notorious for making the car buying process overly difficult.
Try figuring out how much a car actually costs and you’ll see exactly what I mean.
First, there’s the sticker price a car dealership advertises. From there, you can find the manufacturer’s suggested retail price (MSRP) to compare to. If you negotiate well, you may even work your way down to the dealer’s bottom line – or, the lowest price they’ll accept for a specific car on their lot.
Unfortunately, the path from the sticker price to bottom dollar pricing is often shrouded in mystery. And if you’re not careful, you can wind up paying more than a car is truly worth – or paying more than you can afford.
But, pricing isn’t the only way car dealerships can screw up your finances. Not only do they make negotiating price a weird and stressful experience, but they’re awesome at convincing you their new cars are worth outrageous sums of money.
Keep in mind that, as of the first quarter of the year, the average new car loan came in at well over $30,000. And the average new car payment was $499 per month – for 68 months!
When you consider the fact that the median household income was only was only $56,516 in 2015, those numbers are absurd.
Related: The One Monthly Payment KILLING Your Wealth
Like it or not, it’s up to you to figure out how much you can truly afford to spend on a car. No matter what, don’t leave it up to your sales guy to decide how much you can borrow. Why? Because, according to their facts and figures, your credit and income may qualify you to buy just about anything on the lot.
True “affordability” is never dictated by lenders or big banks. At the end of the day, only you know how much you can afford to spend on transportation and your other bills.
So, how do you determine how much you can afford?
If you’re buying a new car and paying in cash, determining what you can afford is easy. How much cash do you have saved for a car that’s kept separate from your emergency fund? That’s how much you can afford.
When you’re financing a car, on the other hand, you have to determine what you can afford a different way. Since car loans require steady monthly payments, one of the easiest ways to gauge affordability is by nailing down an affordable monthly payment and going from there.
Keep in mind that car payments are determined using more than the purchase price of a new or used vehicle. On top of principal payments toward your loan, you’ll also pay interest. While new cars tend to come with higher prices and lower interest rates, older cars come with lower prices (on average) and higher rates.
The type of car you can buy – and how much you can spend – will depend on the monthly payment you can truly afford. If you’ve already had a car payment in the past or have one now, you may be aware of how much you can afford to pay on a monthly basis. But, if you’ve never had a car payment, you’ll need to do some math.
Here are four steps that can help you nail down a monthly payment you can afford.
If you’re not using a budget already, you may not know exactly how much you earn each month. Before you can decide on a car payment, however, this step is crucial.
Take out your pay stubs and add up your regular income in an average month. If you get paid the same amount every few weeks, this part is easy. If your income fluctuates, on the other hand, you may have to estimate your average income based on several month’s pay.
Once you have a handle on your income, you have to add up all your monthly expenses, too. How do you normally spend your money? Make sure to add up all your fixed expenses (rent, insurance, television, phone, internet, etc.) and estimate your fluctuating expenses (utility bills, gas, food, etc.).
Lastly, you should also plan some savings in your monthly budget. If you’re not saving cash every month, you should be, right?
Once you’re done tallying your monthly expenses and savings goals, compare your income to your expenses. How much money do you have left over every month?
Will the price of insurance and gas go up or down when you buy a newer car? If you anticipate changes, make sure to add them to the simple budget you created in steps 1 and 2.
Here’s a good example:
Let’s say you earn $1,000 every payday for a monthly take home pay of $4,000.
Here’s how your expenses look once you add them up:
In this scenario, you should have around $490 leftover to spend on a car each month. That’s how much you could spend, but not necessarily how much you should spend.
Once you have an idea of how your monthly income and expenses look, you can gain more insight by experimenting with a loan calculator. Enter the price range you plan to shop in along with the interest rate you hope to qualify for. From there, you can see what type of monthly payment you might end up with.
Let’s say you’re looking at an older Toyota Corolla hybrid that’s currently for sale at a local dealership. They’re asking $21,000, but you hope to drive off the lot for $20,000.
By playing around with a loan calculator, you can experiment with different scenarios.
If you borrowed $20,000 at 5 percent APR and paid your car off over 60 months, for example, your monthly payment would be $377.42.
Or, maybe you saved up a $3,000 down payment and wanted to pay your loan off over four years instead of five. If you borrowed $17,000 for four years at the same rate, you would owe $391.50 per month.
While the above guidelines make it possible to find out how much car you can afford, that doesn’t mean that number should be your actual budget. If you want even more freedom in your monthly expenses, you should strive to spend less on a car than you can afford to spend.
Here are some tips that can help:
In addition to the price of your new vehicle, you’ll need to cover license plates, insurance, and any additional taxes levied by your state. You will also need to pay sales tax on your vehicle, although your lender may wrap your taxes into your loan if you ask.
When it comes to plates and insurance, you should also remember that newer cars come with higher expenses in these categories. If you want to save money on plates and insurance, buying an older car (or at least one that isn’t brand new) should help.
If you worked out a monthly budget using the guidelines above, you probably know about how much you can afford to pay for a car each month. Still, don’t forget to leave plenty of wiggle room in your budget.
Life happens and surprise expenses pop up. Roofs and cars need repairs. You might have unexpected medical bills or lose your job. The more “extra cash” you have in your budget, the better off you’ll be.
While you cannot control the price of license plates for your new vehicle, you can shop around to get the best rates on auto insurance. The price of your car insurance policy can vary by hundreds of dollars depending on the agency you buy from. By comparing prices and policies, you can make sure you’re getting the best deal you can.
New cars depreciate up to 9 percent the moment you drive them off the lot according to Edmunds, and they continue depreciating rapidly until they’re worth almost nothing. While the same can be said for used cars, you can at least avoid the initial drop that comes in the first few years.
This final tip may seem obvious, but it’s incredibly important. If you’ve gone through the trouble to set a limit on how much you can spend on a car, make sure you stick to it!
Savvy car salesman will do anything to get you to buy a newer model or spend more money. Why? Because their income depends on it!
By setting limits ahead of time, you can ensure you’re the one in control.
The post How Much Car Can I Afford? appeared first on Good Financial Cents.
Some people work to pay their bills.
I work to afford my travel addiction.
Sometimes I’ll sit at my desk and daydream about sipping a Mai Tai by a sparkling pool, or coming back from a day at the beach to a bed I didn’t have to make.
My dreams look like the Four Seasons, but my budget is more Motel 6.
Ebates’ newest feature understands the plight of the broke post-grad who wants to make her travel dreams a reality.
The site already works with more than 2,000 retailers to offer shoppers up to 40% cash back on purchases, including travel related stuff like airfare, car rentals, and luggage.
But Ebates just upped its savings game with a new feature: Ebates Hotels.
The new vertical allows you to book your hotel directly through Ebates and earn up to 7% cash back on every stay.
That’s major moolah compared to other hotel cash-back deals.
Here’s how its competitors stack up:
Even the long list of individual hotel partnerships on Ebates normal site only range from 1%-4.5% cash back.
For example, let’s say you want to book a room at the Howard Johnson. If you book your stay through Ebates, you’ll normally only get 2.5% cash back.
However, you’ll get 7% back for booking the same hotel through Ebates Hotels (before taxes and fees, of course).
But how do Ebates’ rates compare to other travel sites?
I searched the Howard Johnson Enchanted Land hotel in Kissimmee, Florida (close to Disney), for the same random Saturday night on a few different sites.
Ebates Hotels’ rate is actually $48 as well — but the price is shown along with the predicted cash back taken out of the total.
So you won’t see savings right at booking, but don’t be disappointed: You’ll get your cash back in a Big Fat Check when you cash it out.
Disclosure: You wouldn’t believe how much coffee The Penny Hoarder team goes through. This post contains affiliate links so we can keep the grinds stocked!
Jen Smith is an editorial intern and the blogger behind Saving with Spunk. She writes about saving money and paying off student loans now so you can have more fun with your money later.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
Looks aren’t everything — except, of course, when they are.
Real estate giant Zillow scoured more than 32,000 photos from home listings to see how paint colors impacted average sales prices.
What they found out may surprise you. It turns out homes with walls painted shades of blue or light gray tend to bring in more in resale dollars than those with white walls. In some cases, up to $5,440 more.
“Color can be a powerful tool for attracting buyers to a home, especially in listing photos and videos,” Svenja Gudell, Zillow’s chief economist, said in a press release. “Painting walls in fresh, natural-looking colors, particularly in shades of blue and pale gray not only make a home feel larger, but also are neutral enough to help future buyers envision themselves living in the space.”
Painting a room is a relatively low-cost, low-skill upgrade, but you’ll want to choose the right colors. Zillow’s 2017 Paint Color Analysis can guide you to the hues you should paint your walls if you want the most bang for your buck when selling your home.
So go ahead and put down that can of white, off-white, cream, eggshell, china, cotton, pearl or even unicorn white.
In the kitchen, opt for a light blue to soft gray-blue tone, Zillow recommends. Homes with those colors sold for $1,809 more. Kitchens painted yellow, on the other hand, saw resale value drop by about $820.
Bathrooms painted light powder blue or periwinkle can bring in $5,440 more on average, while off-white or eggshell white bathrooms lowered home sales by about $4,035.
Home sellers may lose about $200 having a pink bedroom but could stand to gain $1,856 with a light cerulean or cadet blue bedroom.
One room where blue doesn’t reign supreme is in the living room. Zillow found a light beige, pale taupe and oatmeal color tends to add $1,809 to home sales, while living rooms painted light blue, periwinkle, pale silver or pastel gray lose out on an average of $820.
Even the color of your front door can make a $1,500 difference. See Zillow’s full report for more.
Nicole Dow is a staff writer at The Penny Hoarder. She has grown used to neutral walls from renting but is looking forward to buying her first home and painting the walls whichever colors she wants.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
