Financial Wellness

If you struggle to make ends meet, you’re not alone. More than half of Americans — 58% — live paycheck-to-paycheck, according to data from CNBC. If you’re among them, don’t despair. There are a number of ways you can spend smartly and create some breathing room in your budget so you can end that paycheck-to-paycheck cycle once and for all. Here are a few of our favorites.

Examine Your Expenses

Spending smartly starts with knowing where your money is going. Things like autopay (not to mention Venmo and Zelle) have made it incredibly easy to lose track of our monthly expenses. This often happens with recurring subscriptions to things like streaming services or other types of memberships you no longer use. To find where your hidden charges may be lurking, start by examining your credit card and bank statements to see exactly where your money is going. (If you’re a frequent user of a Venmo-like app, check that, too.) “Even this simple step could be eye-opening since you may not have realized just how much your cable plan has jumped, or that you're still paying for a subscription you thought you canceled,” says money-saving expert Andrea Woroch.

But don’t stop at checking on monthly charges — keep an eye on your year-end statements too, as some charges may only occur on an annual basis, making them easy to overlook. “Cancel unused subscriptions, and turn off auto deliveries if you're finding that you're getting items too often,” Woroch adds. “This is causing you to spend more each month on items you just don't need.”

Don’t Be Afraid To Negotiate

You know that internet plan that you have? Someone is probably getting it cheaper, and there’s no reason you can’t strike a bargain, too. To start, look to see if any service bills that you have (like your cell phone, cable or internet) have increased in price this year. If they have, pick up the phone, call customer service and start negotiating. Even if you’ve never negotiated before, it’s not difficult — just politely ask for a better rate and you may be pleasantly surprised when you get it!

“Ask about new promos and if you can get a discount for setting up e-billing or autopay,” advises Woroch. You’ll also want to compare prices with competitors. If you find one offering a similar service for less money, let your current provider know. “If you're really ready to switch, your current provider may magically present a discount without changing your current service,” she says.

Make A Habit Of Meal Planning

According to the United States Environmental Protection Agency, the average family of four spends $1,500 per year on food that doesn’t get eaten. In other words, we’re throwing $1,500 right in the trash. One of the best ways to stop wasting food and to spend smartly is to meal plan. With a meal plan, you’ll know exactly what you’re cooking and exactly what ingredients you need to buy. A quick check of your pantry before you shop will help you avoid spending too much. (Plus, having a list can help you avoid impulse buys, which is a shopping essential!) As you plan, Woroch advises limiting how much fresh food you buy in bulk since it will spoil the quickest (and because, let’s be honest, we don’t always get around to eating that second head of lettuce.) That said, if you do have fresh fruit or vegetables on hand that are about to go bad — like bell peppers or blueberries, for example, don’t be afraid to freeze them.

“If you like to have fruits and veggies on hand for last-minute meals, stock your freezer with frozen produce, which is great for a smoothie, stir fry or omelet without worrying about these pricey foods going bad,” she adds. Pantry tracking apps, like Pantry Check, can also help you keep track of what you have at home, and avoid buying items you already have in your cupboards.

Steer Clear Of Social Media Temptations

When was the last time you got “influenced”? If you spend time on TikTok or Instagram, you know that it’s all too easy to “add to cart” when someone you follow is advertising something great. Some 48% of social media users say they’ve made an impulse purchase of something they saw online, 68% of those individuals say they regret one of those buys later, according to data from Bankrate.

While we can’t disconnect completely from all ads on social media, we can “unfollow” accounts that regularly tempt us to part with our hard-earned cash. We can also put up some roadblocks to immediate spending. For example, delete any credit card payment info that may be automatically stored in your favorite apps, allowing you to make a purchase with just a few taps, suggests Trae Bodge, Smart Shopping Expert at Truetrae.com. “In the time it takes to enter your info, you’ve had an opportunity to think about whether this is a purchase you truly need to make.”

Also, keep an eye out for other tech triggers that may push you to spend. Namely, push notifications that are sent directly to your phone or email whenever a good deal is on-offer. Simply opt-out or unsubscribe to get away from these temptations.

Use Apps To Your Advantage

Just as tech can push us to spend, it can also help us to save. There are a number of apps that can work to our advantage as we look to spend smartly. For example, Flipp is an app that allows users to browse store circulars, all in one place. “You can even make a shopping list right in the app, and they will alert you if a particular store releases a coupon or new deal so you know where to shop for the lowest price,” notes Woroch. She also recommends Fetch, which has users take pictures of their receipts from popular stores and restaurants (Target, Sephora and Starbucks, to name a few). Doing so will earn you reward points that can be used toward gift cards.

For people who regularly shop online, browser plugins can help with tracking down coupons and finding the lowest prices. For example, the plugin Sidekick from CouponCabin applies coupons or cash back to your cart automatically as you shop. “Just yesterday, Sidekick found me a coupon for 10% off sale items at Athleta and I earned 3% cash back on my order,” says Woroch. “So far, just this month, I've earned $68 using the tool.”

Match Your Credit Card To Your Spending Style

Take a look at your year-end statement for your credit card. In which category did you spend the most? Was it food, gas, travel, or something else? Once you have that answer, then shop for a credit card that provides you with the most cash back (or most impressive rewards) for that category. Of course there’s one important caveat here: “Make sure you're paying off your balances in full at the end of the month, because paying interest on a balance will cost much more than the rewards you receive,” Woroch cautions.

Know Exactly What You’re Saving For

Finally, one of the easiest things you can do for your finances is to build a budget and keep your long-term goals in mind. Doing so will help you spend smartly whenever you’re making a purchase. “I think people often spend money they don’t have, which is where the problem lies,” says Bodge. “When I have extra money, I prioritize my saving goals first. For me, it’s college for my daughter, and retirement, and then I can treat myself if there is money left over.”

Ever feel like you’ve been on an online spending spree but don’t know how to stop? What about those in-store impulse buys that always seem to catch your attention at the check-out? These days, it’s all too easy for us to spend WAY too much, whether we mindlessly “add to cart” on our phones, or tap to pay before we think about our purchase. It’s no wonder that consumer spending in 2023 outpaced expectations, as Americans continue to buy, buy, buy… But our spending wasn’t the only thing reaching new heights — credit card debt topped $1 billion (yes, billion) for the first time in history.

In other words, our spending habits are proving to be incredibly costly, possibly even dangerous to the point that they could derail our financial futures. That’s why it’s time we break our bad shopping habits once and for all. Thankfully, there are ways we can all slow down and spend less and shop smarter. Here’s a look at 7 of our favorite methods.

Watch Stress Spending

Instead of spending when you feel stressed (ahem, “retail therapy” isn’t always a good thing!) walk away and find something else that makes you feel good. This could be a walk around the neighborhood, a bath, a good book, a yoga class, or even a phone call with a friend. Find whatever works for you and put it in place whenever you feel your stress levels rise. The truth is that while “stress shopping” may make you feel better for a short time, in the long run, it can cause you even more stress if your purchases put you over budget.

Give Yourself An Allowance

We all need the occasional treat. After all, we work hard for our money, and it’s nice to reward ourselves every now and then. But problems arise when we reward ourselves without having a budget in place — if we’re going to splurge with a new piece of clothing, a dinner out, or even a short vacation, we need to know exactly how much leeway we have to spend without busting our budget.

Having a spending allowance in place “helps people from a psychological perspective to make smarter decisions,” explains Trae Bodge, smart shopping expert at TrueTrae.com.

Pro Tip: Set a weekly or a monthly spending budget, depending on your financial situation. Just remember that the goal shouldn’t be to spend it all — rather, you’ll know how much you can spend should something amazing pop-up. If you don’t spend your splurge fund, just keep saving that money until something you really want comes along.

Establish Set Shopping Times

How often have you found yourself killing time on your phone, mindlessly scrolling Instagram or TikTok, when your feed displayed something you just had to have? This could just as easily happen at 8am on a Monday as 2am on a Saturday night, which is why you need to put guardrails up to make sure you aren’t purchasing something new and shiny every time it catches your eye. Establishing set shopping times during the week as the only times that you’ll make purchases can help you cut down on impulse spending. The goal is that you pick a time that feels good for you… If you do this, there’s a good chance that those impulse buys that once grabbed your attention won’t even be remembered. (Which means you just saved a ton!)

Make The Switch To Cash Or Debit

Spending money that you see leave your wallet or bank account immediately — via cash or debit — can be a game-changer. We know that when we spend money in a more tangible way, we spend less than when we use a credit card, which can seem like “magic” money. The truth is that humans just don’t feel as much of a connection to our money with in-app spending, which may be one reason why mobile spending hit an all-time record of $171 billion in 2023.

“Psychologically, the apps don’t show us the total of what we’re losing,” says Sherrie Campbell, a clinical psychologist. “We push a button, and bam — our Uber shows up. You don’t even ‘pay’ for Starbucks anymore, you can just bring your phone in. We’re not feeling the loss of money, only the gain.” Essentially, using digital payment methods like apps and credit cards can cloud our judgment on exactly how our spending is adding up. Cash and debit make things more real.

Every Time You Buy Something New, Sell Or Donate Something

Do you just need that pair of new shoes? What about that great new shirt, or sporty new backpack? First, ask yourself: Can I afford it? Then, ask yourself: What else in my life am I willing to part with? When you sell or donate your old items, not only do you clear up closet space, you also stand to earn some extra cash. Setting a “one in, one out” rule for yourself can really make you stop and think before snapping up new things. A few of the best places to sell your unwanted stuff online include eBay, Poshmark, and Mercari. It’s a win-win: not only do you declutter, you also stand to bring in a little extra money for the month.

Walk Away, And Revisit Later On

If you want to add something to your cart, or “wish list” (as many of us often do on Amazon!) go for it — just don’t purchase until you’ve taken at least a 24-hour pause, or until your weekly shopping moment rolls around, explains personal finance expert and CEO of HerMoney Media, Jean Chatzky. These digital lists can function as a handy repository for things you want to come back to. “The trick is that you come back the next day and re-assess. If you find you’ve been thinking about the item often, then it may be time to pull the trigger. But if you’ve found you’ve lost interest, then move on without it,” Chatzky says.

Pro Tip: Many retailers will tempt you with “limited time deals,” that they say are expiring ASAP. Many websites even have a time clock counting down the minutes left to snag the sale. But don't be fooled by these tactics — rarely is a bargain a once-in-a-lifetime opportunity.

When you embark on the search for a new home, you may think you know the steps to take: Read the listings, visit some open houses, sign on with a Realtor, make an offer. In fact, there’s a biggie missing from that list — a step as important financially as the house you decide to buy itself: Get a mortgage.

It’s widely understood that most houses and apartments are purchased using mortgage loans, which the Consumer Financial Protection Bureau defines as “an agreement between you and a lender that gives the lender the right to take your property if you fail to repay the money you’ve borrowed plus interest.” Sounds serious — and it is. Mortgages come with a wide variety of lengths (called the term), repayment provisions and interest rates. Locking in the one that’s best for you means getting something of an education. Especially if you’re a first-time homebuyer, it pays to learn the ins-and-outs of mortgage financing so you’ll know what to expect.

Mortgage 101

Before you even start to look for a mortgage, you’ll want to understand how they work. The most common type of mortgage is what’s called a 30-year fixed rate loan. As it sounds, you have three decades to pay the money back with the rate of interest that you lock in initially fixed for the entire time. You’ll also see 15-year and sometimes 10-year fixed rate loans. These require you to pay off the home in a shorter period of time, but because the bank is lending the money for a shorter term, the risk that you won’t repay the money is lower. That’s the reason interest rates on shorter-term loans are lower than those on longer-term ones.

The other primary type of home loan is an adjustable rate mortgage or ARM. Here, the initial monthly payment is lower than prevailing interest rates (which allow buyers to qualify to borrow more money), but over time the rate adjusts in sync with current interest rates or another financial index. If rates rise, your monthly payment will rise (there’s typically a cap that limits how far up it’s allowed to go). If rates fall, your monthly payment may fall as well. Hybrid ARMS, which you may see represented as 5-1 or 7-1 ARMs, are fixed for the first 5 or 7 years of the loan, then begin adjusting. If you believe you will only live in a home for 5 or 7 years before moving, for example, this can be a way to lower your monthly payments without taking on too much risk.

Qualify For The Best Rate On A Mortgage

Getting the best rate on a mortgage involves two things: shopping around (there are often significant interest rate differences among lenders) and your own credit. Before you begin shopping for a house, do your own homework to determine your creditworthiness and prepare for a conversation with a lender, says Bob Collins, a mortgage broker at Signal Hill Mortgage in California.

First, gather tax returns, pay stubs and other paperwork that documents your income for the past two years. You’ll also need documentation of liquid assets, cash on hand, as well as credit history and your current income. That may include credit union, bank and investment account statements. If you’re not familiar with your credit rating, request a free copy of your credit reports from the three major credit bureaus, Equifax, Experian and TransUnion and pull a free copy of your credit score. You may be able to do this through your credit union. If you find an error on your credit report, file an error report with the bureau in question on the bureau’s website. They typically have a month or two to correct it.

What Lenders Are Looking For

As you gather information, keep in mind what lenders are looking for. Harrine Freeman, a credit expert and owner of H.E. Freeman Enterprises says these things will help you get the loan you’re looking for.

• A credit score of at least 660. (Some lenders accept scores as low as 620.)
• An explanation of any late payments in the past two years.
• Credit card balances at or less than 30 percent of the credit limit.
• A solid work history and income.
• A history with financial institutions such as credit unions, and collateral such as checking and savings accounts, investment accounts, retirement accounts, life insurance policies and automobiles.
• A total debt-to-income ratio of 36 percent or less.
• A down payment of at least 5 percent.

Better yet, sit down with a loan consultant at your credit union and talk through your specific situation. They may or may not be the lender you go with in the end, but it’s a terrific first step toward getting an education (and credit unions are often very competitive when it comes to interest rates.)

Don’t Fall For Gimmicks

Getting that education will help you when it comes to shopping around. Many lenders advertise deals, but it’s unlikely you’ll save a lot with such marketing efforts, says Casey Fleming, author of “The Loan Guide: How to Get the Best Possible Mortgage.” “Lenders get calls by advertising, ‘We never charge points!’ or ‘We pay your closing costs!’” Fleming says. “But they build their profit into your interest rate.”

If you plan to hold the property for a short period of time, such a deal might work in your favor, Fleming says. But over a longer period, paying the closing costs yourself in order to get a lower interest rate may be less expensive. Fleming recommends calling any “no cost” lender and asking what the interest rate would be if you paid costs, too.

Similarly, some mortgage companies advertise that they’ll pay your mortgage insurance — but that guarantee usually comes with a higher interest rate. “The higher interest rate lasts forever, whereas the mortgage insurance may only last for two years,” Fleming says. “Call the lender, and ask them to compare a no-mortgage-insurance plan with one with a lower interest rate where you pay for the insurance. Have them calculate the total cost of the options over a set period of time, such as seven years.”

Get Pre-qualified (Then Pre-approved) For A Mortgage

When you’ve found a lender with whom you feel comfortable, it’s a good idea to get prequalified before you start shopping. Pre-qualification involves discussing the various loan program requirements and determining whether you will have the minimum down payment, employment and income history, credit history and payment reserves.

A lender shouldn’t have to check your credit to pre-qualify you for a loan. In most cases, an underwriter (the loan professional who determines whether you qualify for a certain loan) will review the file and issue a conditional loan approval. The formal pre-approval process is the next step, where your loan application and credit report are submitted for review, along with income and asset documentation.

Understand The Real Costs

Once you’ve made an offer for a home and it’s been accepted, you can move on to scheduling a closing date. Just keep in mind there are costs there as well. By law, all lenders must provide a good faith estimate of closing costs, but that list doesn’t include all the charges you’ll face. For instance, the title company, which researches the title or deed to the home to ensure that no one else has rights to it, will determine its own fees (for “title insurance”) as will the home inspector, and a homeowners’ association if applicable.

Don’t Make Big Changes Before Closing

If you’ve gone through a loan pre-approval process, don’t make any big changes – like switching jobs – until after your loan is closed. If you do, all the employment and salary data that your loan was based on is no longer accurate and you may no longer be approved.

And finally, if you don’t qualify for a home loan right away, don’t panic. There are things you can do to move the needle on your credit score. It won’t happen overnight, but with hard work and diligence in paying your bills on time, every time, it can happen. If this sounds like something you’d like a little help with, check out the Finance Fixx small group coaching program, where a dedicated coach and a team of accountability partners will walk you through it, step-by-step.

Aside from buying a home or perhaps paying for a college education, buying a car will most likely be your most expensive purchase as an adult. The average monthly new car payment at the end of 2023 was $726; the used car average was $533, according to Experian. In other words, your car payment can be an enormous part of your monthly budget, which is why it’s so important to secure the best possible deal on an auto loan and ensure you aren’t paying more than necessary in interest.

What’s the best way to do that? And what’s the truth behind those “0% financing” deals you’ve seen? Here’s a rundown on how to find the best deal on an auto loan so you can drive off into the sunset with confidence.

The Financing Is Just As Key As The Car

Sometimes car shoppers get laser focused on just that — shopping for a car. But while negotiating the price of your vehicle is important (especially in this market), financing rates can vary widely and make a huge difference in your monthly outlay. Here’s an example: If you put $6,000 down on a $30,000 car purchase, with an interest rate of 9% and a loan term (length of the loan) of 60 months, you’ll spend $498 every month over the course of five years. But if you can lock in an interest rate that’s two percentage points lower at 7%, your monthly expenses drop to $475 per month, for a savings of $1,380 over the life of the loan. And at 5%? It’ll be $453 a month, for a total savings of $2,700.

What’s In A Loan Rate?

There are a number of factors that play a role in the interest rate you’ll pay — chief among them your credit score. Today, a great credit score (781-850) would net you an average rate of about 5.2% on a new car, 6.8% on a used car. A good store (661-780) meant an average 6.4% on a new car, 8.8% on a used one. A fair score (601-660) merited an average 8.9% on a new car, 13.3% on a used one. And a score under 600 meant you’d pay an average 11.5% on a new car, 18.6% on a used one. (In general, used car loans cost more because the car is more likely to fail, and the borrower may then be less likely to pay back the loan if they’re suddenly without a car to get to work.)

Clearly, that’s reason enough to keep your score as high as possible. But credit score isn’t the only factor in the mix. Your rate can also adjust based on your down payment (according to automotive advice site Edmunds, car buyers should look to put at least 20% down for the best rate.) The length of your loan (the term) makes a difference — shorter translates into a lower rate because the risk to the lender is less when you have the money for a fewer number of years. Finally, there’s the price of the car, which can change with negotiations at the dealership, explains Scotty Reiss, founder and CEO of A Girls Guide to Cars, a website that’s empowering women to be smarter, happier car buyers (and owners) by arming them with car information.

“It's good to have a car loan calculator handy so you can plug in those variables and see what your payment will be,” Reiss says. It allows you to plug in all your information and tinker with the details to see how your payments will change.

You Better Shop Around

In terms of where to find the best interest rate, comparison shopping is key. It’s important to understand that not only are you not locked into financing from your dealer (more on that in a second), you’ll have an edge if you come in to shop with financing from another source. One of the best places to start your rate-shopping journey is at your local credit union. Credit unions across the country have some of the best auto loan rates — for used cars as well as new. After chatting with your credit union, you can search for the best rates across the country using rate comparison tools offered from sites like Bankrate and LendingTree — these sites will often include the minimum required credit score you’ll need to secure each offer. Once you’ve done your homework, you’ll have several rates in hand and can compare them all to make sure you’re getting the best deal.

“If you don’t shop around to get preapproved for a car loan before you walk into the dealership, you’re probably costing yourself money. It’s as simple as that,” says Matt Schulz, chief credit analyst at LendingTree.

What About Dealer Financing?

As for that dealer financing — the one time it does make sense is if you can get a deal. We’ve all seen advertisements offering 0% financing on a new vehicle. But how do they work, exactly? “Auto dealers love these offers because they get people in the door,” Schulz says. “Consumers love them because, come on, who wouldn’t love paying no interest when you’re financing a car? But upon closer inspection, these deals aren’t always as amazing as they seem.”

For starters, the repayment period for that 0% financing deal may be shorter than what you’re comfortable with. A 0% offer might require that you pay off the loan in 48 months rather than 60 or 72 months — and this may drive your monthly payments higher than what you can reasonably fit into your budget.

Also, 0% offers do not apply to used cars, and sometimes the offer won’t apply to all the new cars on the lot — possibly just the ones that the dealer is most eager to move, Schulz says.

Additionally, taking a 0% offer may eliminate the possibility of cash-back rebates or price reductions that might be available, Schulz cautions — it may even make the dealer less likely to negotiate on the sticker price. If you’re considering a 0% financing offer, you’ll need to put pen to paper and figure out how much you stand to save by negotiating vs. how much you stand to save on interest with a 0% financing deal.

“It’s really easy to get lured in by 0% offers on car loans,” Schulz says. “They can be really great deals, depending on your situation. Just make sure that you do your homework before you apply, because what you don’t know can cost you.”

Also, 0% offers are often built into the price of the car, Reiss says. “Shop with your own pre-approved financing in place, and compare the cost of the loan plus a negotiated price on the car with what you'll pay for the car with a no-interest loan. It's always a good idea to separate negotiating on the car with negotiating on financing (and, negotiating on your trade in), and only combine them when each is your best option,” she says.