College will cost more for students borrowing during the 2023-24 academic year as federal student loan interest rates climb to heights not seen in a decade or longer.
As of July 1, undergraduates who take out new direct federal student loans will see interest rates rise to 5.50%, the Education Department’s Federal Student Aid office said Tuesday — up from 4.99% in the 2022-23 academic year and 3.73% in 2021-22.
Interest rates on graduate direct loans, available to graduate and professional students, will rise to 7.05% from 6.54% the year prior. PLUS loans, which parents and grad students can use to fill in education funding gaps, will jump to 8.05% from 7.54%. Here are the higher 2023-24 rates for each type of federal student loan, compared with the 2022-23 academic year:
2022-23 interest rate
2023-24 interest rate
Undergraduate direct loans
Graduate direct loans
PLUS loans
Undergraduate direct student loan interest rates haven’t been this high since 2013. Interest rates on direct graduate loans and PLUS loans, introduced with fixed rates in 2006, have never been this high.
Rising rates makes college pricier
Higher interest rates mean paying off loans will cost more. Each year, usually in mid- to late May, the government sets fresh federal student loan interest rates for the academic year ahead by adding the U.S. Treasury’s May 10-year note auction yield with an additional “add-on” percentage, which varies depending on loan type. The final rates apply to new loans doled out starting July 1.
Ultimately, charging more interest will make college more expensive for the millions of college students and their families who take out loans. Today, nearly 44 million people collectively owe roughly $1.6 trillion in outstanding federal student loans — and federal loans account for about 93% of the total student debt burden, according to a NerdWallet analysis of Department of Education and Federal Reserve data.
For example, if you start college this fall and borrow a total of $31,000 in unsubsidized federal direct loans (the maximum loan amount for dependent undergraduates) with a 5.50% interest rate, you’ll wind up paying back almost $50,000 under a standard 10-year repayment plan. If you’d started college in 2020-21 and taken out the same $31,000 federal loan with a record-low 2.75% interest rate, you would’ve had to repay around $39,500 including interest over 10 years.
The higher rates will apply to all students who take out new federal loans for college or graduate school in the 2023-24 academic year. It’s important to note that all federal student loans have fixed interest rates, so they won’t change during the repayment period.
Federal vs. private student loan interest rates
In recent years, federal student loans have offered lower interest rates (and fees) than private alternatives, but that may no longer be true for some borrowers. The average private fixed-rate undergrad student loan charges 5.99% to 13.78% in interest, according to a January 2023 NerdWallet analysis. As a result, private loans may start to look more attractive.
However, private student loans have drawbacks. They usually require a student to have a high credit score — or a co-signer with a high credit score — to qualify for the lowest rates. The co-signer, typically a parent, is equally responsible for the loan. Federal student loans don’t allow co-signers, and only federal PLUS loans require a credit check.
Federal loans also offer benefits like payment plans that cap monthly bills at a certain percentage of your income, temporary payment pauses if you lose your job or experience financial hardship, and loan forgiveness programs. Private loans don’t typically offer these protections.
Though federal interest rates still have room to climb, they could soon hit a ceiling. Under the Higher Education Act, rates may not exceed 8.25% for undergrad loans, 9.5% for grad loans and 10.5% for PLUS loans. Private student loan lenders have much higher maximum interest rates.
Submit the FAFSA to minimize borrowing
Minimize your total college debt — and the amount of interest you’ll pay over time — by maximizing funding sources you won’t have to repay, like scholarships, grants, work-study and other financial aid options.
You’ll need to submit the Free Application for Federal Student Aid, or FAFSA, to qualify for most federal, state and school grants. That includes the federal need-based Pell Grant, which, starting in 2023-24, can give students up to $7,395 per year in free money to pay for college. Scholarships also often require applicants to submit the FAFSA, including some offered by private organizations.
The FAFSA is open until June 30, 2024, for the 2023-24 school year, but don’t delay. Fill it out as soon as possible to increase your chances of getting more money. Some types of aid draw from limited pools and can run out.
However, not every SkyMiles redemption is a good deal. Sometimes, you can get a better redemption rate when you redeem other miles for Delta flights.
Let’s look at when booking Delta flights through a partner mileage program makes sense — and how you can easily generate those points.
Book short nonstop Delta flights via Virgin Atlantic Flying Club
For short, nonstop Delta flights, you can often save on Delta award flights by booking through Virgin Atlantic Flying Club.
That’s because Virgin Atlantic uses a set distance-based award chart for most Delta-operated flights:
Distance (in miles)
Main cabin
First class
7,500 points.
17,500 points.
501 – 1,000
8,500 points.
27,500 points.
1,001 – 1,500
11,500 points.
40,000 points.
1,501 – 2,000
12,500 points.
45,000 points.
2,001 – 3,000
15,000 points.
52,500 points.
Economy rates start at 7,500 points for flights under 500 miles and increase to a still-reasonable 15,000 points for flights from 2,001 to 3,000 miles. However, Delta first-class awards are prohibitively expensive.
While 500 miles might not sound far, this covers routes like Salt Lake City to Albuquerque — which would otherwise be a nearly 10-hour drive. The 7,500-point rate through Flying Club prices at about half of the price that Delta is charging for the same award.
Longer awards can also make sense, depending on the route. For example, instead of paying 15,000 SkyMiles to fly from Atlanta to Chicago-O’Hare, you could book the same Delta award flights for 8,500 Virgin points.
Even if you don’t typically fly with Virgin Atlantic, you can stock up on Virgin Atlantic points by transferring points at a 1:1 transfer rate from the following transferable point programs:
If you strike out through Virgin Atlantic Flying Club, or you’re booking a connecting flight, consider the next option: Flying Blue.
Book domestic Delta flights via Flying Blue
Flying Blue is another SkyTeam mileage program that you can use to save on booking domestic Delta award flights. While Flying Blue prices Delta award flights based on the route and date, there are still some gems.
For example, take a nonstop award flight from Atlanta to Salt Lake City on Oct. 18. At the time of writing, Delta is charging 32,500 SkyMiles for economy awards on many flights that day.
However, the same award flights can be booked through Flying Blue for 17,500 miles each way — albeit with slightly higher taxes and fees.
Flying Blue can also be a winner for booking connecting flights to secondary cities. For example, Delta is currently charging 32,500 SkyMiles for a flight from Salt Lake City to Myrtle Beach, South Carolina. But you can book award flights on the same route through Flying Blue for 19,500 miles one way.
Another advantage of booking award flights through Flying Blue is how easy it can be to accumulate miles. You can transfer points to Flying Blue from the following programs:
American Express Membership Rewards (1:1 transfer ratio).
Capital One Miles (1:1 transfer ratio).
Chase Ultimate Rewards® (1:1 transfer ratio).
Citi ThankYou Points (1:1 transfer ratio).
Bilt Rewards (1:1 transfer ratio).
Marriott Bonvoy (3:1 transfer ratio with a 5,000-mile bonus for transferring at least 60,000 Bonvoy points).
Flying Delta One to mainland Europe
Another time when using Virgin Atlantic Flying Club to book Delta miles makes sense is for flights to mainland Europe.
For whatever reason, Virgin Atlantic doesn’t apply its distance-based award chart to these flights. Instead, awards price at 30,000 points in economy or 50,000 points in Delta One business class.
These rates can lead to some extraordinary savings.
For example, this economy award flight from New York-John F. Kennedy to Berlin in November requires 30,000 Virgin points versus 70,000 Delta SkyMiles. And the savings are even more exceptional in business class: 50,000 Virgin points versus 240,000 Delta SkyMiles.
Using Aeromexico for certain domestic flights
Lastly, Aeromexico — Delta’s SkyTeam partner to the south — may also come in handy when booking certain Delta award flights. That’s because Aeromexico seems to have access to more award availability than other SkyTeam partners.
However, award rates are dynamically priced, meaning there can be no rhyme or reason as to when it’s better to book through Aeromexico instead of Delta.
While redemption rates might not seem attractive initially, factor in that these redemption rates are in kilometers instead of miles. That’s why American Express Membership Rewards transfer to Aeromexico at a rate of 1 Membership Rewards point to 1.6 Premier points.
So, divide the Aeromexico cost by 1.6 if you’re considering transferring AmEx points to Delta or Aeromexico.
If you’re looking to save miles on Delta flights
While you won’t always save when redeeming other miles for Delta flights, several of Delta’s SkyTeam partners can offer award flights for much cheaper than through Delta. So, it’s worth spending a few minutes checking partner loyalty programs for more affordable rates.
That’s particularly true if you plan to transfer Membership Rewards points to Delta to complete a booking.
All of the alternatives we covered are also transfer partners of Membership Rewards — as well as several other major transferable point programs.
(Top photo courtesy of Delta Air Lines)
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:
By Contributing Author11 Comments – The content of this website often contains affiliate links and I may be compensated if you buy through those links (at no cost to you!). Learn more about how we make money. Last edited January 5, 2018.
Gold is probably one of the most misunderstood areas of investing and economics. Investors typically are split down into one of two irrational groups — those who always think gold is worthless and in a bubble, and those who always think gold is on a permanent one-way trip to the moon. The truth lies somewhere in the middle.
Let’s look at the facts about gold, without ignoring a basic understanding of economics principles and economic history. Hint: both pop-investors and gold bugs are often wrong.
In this article, we’ll look specifically at how gold behaves in the long-term, and what kind of portfolio adequately has gold without going too far to an extreme.
A Few Basic Pro-Gold Facts
Anyone familiar with gold probably knows that plenty of “experts” look down their noses at gold. Many often see it as a barbaric investment. Even Warren Buffett — famous for using high-leveraged equity plays to build a fortune — mocks buying gold, saying that it’s nuts.
Unfortunately, being really good at making money via stocks often makes people blind to the alternatives — like land, gold, and silver. Here are a few undeniable facts that the pro-gold crowd should be familiar with.
1. Gold is safer than TIPS, bonds, and stocks. There is absolutely no way around this — gold doesn’t go bankrupt, doesn’t ever become completely worthless, and over time will beat inflation. TIPS, bonds, stocks — they can’t say this. While a diversified portfolio will out-earn gold over time, gold mixed with a portfolio makes it more secure, and acts as a type of financial insurance. Any of the investment “experts” who might disagree just needs to brush up on economic history.
Of course, by “safer” I don’t mean “more likely to earn money”, I mean “more likely to not become worthless.”
2. Gold is a fantastic diversification tool. When people lose faith in the system, gold goes up. People claim this is because of “fear”. I think it should be more appropriately seen as a measure of the general uncertainty about the system which is often extremely understandable. Stock crash of the 80s? Made gold go through the room. Stock crash of 2008-2009? Well, that’s also put gold through the roof.
As a diversification tool, gold mixed with stocks can make a portfolio much stronger over time, much less volatile, and even much more lucrative if rebalanced correctly.
3. Gold beats inflation over time, period. This is essentially unavoidable. Even though the price of gold is often manipulated by central banks and large financial institutions, it’s always been worth something — enough to sit up and take notice if you see a gold coin on the ground.
If you had 1000 ounces of gold back when Jesus walked the Earth, then you would have been a rich person. The same is true now — you’d have a million and a half dollars. No publicly traded company, no bond, no Treasury Bill, no [fill in the blank] comes close to such a record. Land is sometimes worthless, companies go under over time, governments collapse, currencies dissolve, silver prices have been essentially worthless before… but gold has always been worth a subtantial amount.
Of course, that gold is such a great inflation hedge is also a strike against it in a sense — if your investment just keeps up with inflation over time, then you can’t exactly claim that it’s a way to generate wealth in and of itself over time — the entire appeal is that it’s charts should look relatively flat over the course of a thousand or so years. The only way to actually get “wealthy” with gold is through speculating through the different gold market cycles.
Because of this, gold is best invested by the average person not as a way to make money, but as a way to hold on to one’s money. A “doomsday” insurance policy, in a sense. Because it often counteracts stock-market drops, it can also be used as a good way to make money via rebalancing over time — as a type of stabalizer of your portfolio in case of bear markets for stocks.
What do you think about gold? Do you own any Gold? Do you think it’s old fashioned? Is our current gold market about to collapse or go higher?
Your broker might not have your best interest in mind when they make recommendations to you.
In fact, brokers can legally put their interests ahead of yours.
Did you catch that?
Translated that means that your broker can get a speeding ticket for going 75 mph on the interstate, but won’t get punished for selling you a crap investment that makes them a bunch of money.
This is because most brokers operate under what’s called the suitability standard, which simply means the securities they recommend must be appropriate for you given your financial profile; however, many of the securities that can be considered suitable may be far from the best investment options available at a particular time.
How do you like them apples?
You may be surprised to learn that brokers working under the suitability standard are not legally obligated to find the best prices or the best investment options available at a particular time. As a result, your broker may offer you securities that provide lower returns and carry more significant risks than other alternatives as this may be more profitable for the broker. The suitability standard can apply to brokers that sell insurance, stocks, annuities, or other investment types.
1. Brokers Make Money Even if You Don’t.
This is because of the commissions-based compensation model presently used by many brokerage firms. Let’s say your broker convinces you to buy into XYZ stock at $50 per share. If the price subsequently increases to $60, than your broker may call you and advise you to buy more of the same security because of the 20% appreciation in price. This transaction would then generate a commission for your broker.
On the other hand, let’s say that the same investment in XYZ stock instead dropped to $40 per share. In this case the same broker might call you and still tell you to buy more of the same security because it is now less expensive than it once was and should therefore be considered a bargain. This transaction would also generate a commission for your broker.
Great for them. Not so much for you.
As you can see your broker’s success can have little relation to your own. This represents a misalignment of interests that may cause your broker to benefit at your expense.
2. High commissions are a good thing right?
Brokers may choose to offer you only those investments which pay the highest commissions. To illustrate this point let’s consider another example. Let’s say that investment 1 is the best investment for you, but it offers no commissions to your broker.
On the other hand investment 2 is a worse investment, which pays 5% commission. Under the suitability standard your broker is not obligated to offer you investment 1 and may instead sell you investment 2 in order to collect the commission on the transaction. This conflict of interest is currently permitted under the suitability standard, which is applicable to many brokerage firms.
Isn’t that special?
3. Looks good on paper.
Your broker may sell you an investments that is illiquid or highly risky. This is due to the fact that brokers are often associated with particular issuers of securities or certain investment companies.
As a result they may be limited to offering only the proprietary products sold by their affiliates even though other more attractive investment options may be available in the market. They may also be restricted to particular list of securities and may be compensated to offer one investment over another at any time.
One of the worst examples that I witnessed this was with a portfolio of a friends mom. Her broker had sold her what he called a “safe investment” which was a limited partnership. While some limited partnerships could be considered good investments, this particular one was Medical Capital Holdings.
What’s the big deal about that? Well, this particular limited partnership ended up being a fraud and most investors lost everything that they invested into it. What makes the story even worse, is that this particular broker thought it was “suitable” to put over 1/3 of her portfolio into it.
4. Their commissions can eat away your returns.
If you’re paying commissions on a per-trade basis, you may be spending more than you might expect.
For example, if you’re charged 2% per trade, then making just three trades per year could result in you paying 6% of your overall portfolio in commissions annually.
5. Alphabet jumbo soup.
Brokers may be using deceptive titles to give you the wrong impression about their compensation model and qualifications. Currently, the shear abundance of professional designations being used within the financial services industry is confusing even to the most experienced investors. However, understanding the differences between these titles could have a dramatic effect on your long-term investment results and overall satisfaction.
As an example, the term financial advisor is one of the most used terms in the industry; however, many of the individuals using this title are sales people looking to meet quotas by selling financial products. They may in some cases sell non-marketable securities, which include long-term commitments, excessive fees, and a high level of risk.
Titles with the word “senior” — Certified Senior Advisor (CSA) and Certified Senior Consultant (CSC), for instance — have come under a great deal of scrutiny. I get offers in the mail all the time to buy designations. Don’t let the alphabet soup impress you. The only one that should in the financial planning profession is the CFP® designation. Other notables are the CFA and CPA designation.
6. I have a sales quota.
I love when I get a statement from a competitor that is sponsored by a mutual fund or insurance company. The broker claims to them that they have their clients best interest at heart and can utilize all types of investment choices, except that they only investments I see are from that companies proprietary products.
Hmmm……now whose best interest is first? I assure you not the client.
7. My records clean….kind of
Your broker is not obligated to tell you if there’s anything on his or her record. And why they should they? It’s reported that 70% of prospective clients do not do a background check on the broker before hiring them.
Want to make sure that your broker doesn’t have a record like Bernie Madoff? Head over to FINRA BrokerCheck to see what’s on your brokers record.
8. It could be better somewhere else.
With a broker you’re dealing with a sales person who may or may not have your best interest in mind. On the other hand, registered investment advisors, also known as RIAs are firms which operate under the fiduciary standard, which means that they are legally obligated to put their client’s interests first at all times.
As an independent registered investment advisor, Alliance Wealth Management, LLC was founded as a welcome alternative to the traditional brokerage model so many investors have become accustom to. We are compensated only by management fees paid directly by our clients.
How do you pay you broker? If you don’t know, maybe it’s time to find out.
A few short weeks are left for Congress — or, perhaps, President Joe Biden — to take action and lift the debt ceiling before tick, tick, tick … boom goes the economy.
The so-called “X-date” — when the federal government can no longer meet its legal obligations — could be as early as June 1, according to a May 1 letter from U.S. Treasury Secretary Janet Yellen to Congress. Yellen reiterated the same sentiments in another letter to Congress on May 15.
“If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests,” Yellen wrote in the most recent letter. She warned of “catastrophe” in a May 11 news conference.
The Congressional Budget Office released its own projections on May 12, which left more wiggle room: somewhere in the first two weeks of June. The report also said the U.S. Treasury’s cash and extraordinary measures would be sufficient to fund the government until June 15.
While negotiations between the parties continue, we all wait to see if the federal government runs out of money to pay its bills and defaults. What comes next isn’t pretty.
A range of problems
If the default lasts for weeks or more, rather than days, it could trigger a fire-and-brimstone, Armageddon-level financial crisis for the U.S. and global economies.
A report from the White House Council of Economic Advisors in October 2021 warned of the possible effects of the U.S. defaulting, which include a worldwide recession, worldwide frozen credit markets, plunging stock markets and mass worldwide layoffs. The real gross domestic product, or GDP, could also fall to levels not seen since the Great Recession.
The U.S. has defaulted only once, in 1979, and it was an unintentional snafu — the result of a technical check-processing glitch that delayed payments to certain U.S. Treasury bondholders. The whole affair affected a few investors and was remedied within weeks.
But the 1979 default was not intentional. And from the point of view of the global markets, there’s a world of difference between a short-lived administrative snag and a full-blown default as a result of Congress failing to raise the debt limit.
A default could happen in two stages. First, payments to Social Security recipients and federal employees might be delayed. Next, the federal government would be unable to service its debt or pay interest to its bondholders. U.S. debt is sold as bonds and securities to private investors, corporations or other governments. Just the threat of default would cause market upheaval: A big drop in demand for U.S. debt as its credit rating is downgraded and sold, followed by a spike in interest rates. The U.S. would need to promise higher interest payments to justify the increased risk of buying and holding its debt.
Here’s what else you can expect if the U.S. defaults on its debt.
A sell-off of U.S. debt
A default could provoke a sell-off in debt issued by the U.S., considered among the safest and most stable securities in the world. Such a sell-off of U.S. Treasurys would have far-reaching repercussions.
Money market funds could see volatility
Money market funds are low-risk, liquid mutual funds that invest in short-term, high-credit quality debt, such as U.S. Treasury bills. Conservative investors use these funds as they typically shield against volatility and are less susceptible to changes in interest rates.
However, in the past, money market funds made up of U.S. Treasurys have seen increased volatility when the U.S. ran up against debt ceiling limits and signaled potential government default. Yields on shorter-term T-bills go up because they are impacted more compared with longer-term bonds, which gives investors more time for markets to calm down.
(Note that money market funds aren’t the same as money market deposit accounts, which are a type of federally insured savings account offered by financial institutions.)
Federal benefits would be suspended
In the event of a default, federal benefits would be delayed or suspended entirely. Those include: Social Security; Medicare and Medicaid; Supplemental Nutrition Assistance Program, or SNAP, benefits; housing assistance; and assistance for veterans.
Although a default wouldn’t affect Medicare and Medicaid recipients directly, delays in payments to providers could make them reluctant to treat Medicare and Medicaid patients.
Stock markets would roil
A default would likely trigger a downgrade of the U.S. credit rating — the S&P downgraded the nation’s credit rating only once before, in 2011, after a last-minute debt ceiling deal was reached. A credit downgrade happens when an international credit rating agency, like Standard & Poor’s, determines the country’s risk of defaulting on sovereign bonds has increased relative to other peer nations or an average, said Andrew Hanson, assistant professor of economics at the University of Tennessee, Knoxville, via email.
A default combined with the downgraded credit rating would in turn cause the markets to tank, the White House’s Council of Economic Advisors said in 2021.
If current debt ceiling talks continue for too long, the markets are likely to become more volatile. When markets are volatile, there is a risk of a run on banks — where deposit customers withdraw money because of fear their bank could collapse — in an already uncertain banking environment. If an institution isn’t able to meet the increased need for withdrawals, it could fail.
Interest rates would increase for loans
As debt ceiling negotiations linger, Americans could see rates increase on established lending products with variable loans, including personal and small-business lines of credit, credit cards and certain student loans. Issuers may also decrease existing credit lines.
Credit lenders may have less capital to lend or may tighten their standards, which would make it more difficult to get new credit.
Depending on the timing of a default and how long the effects are felt, rates could increase on new fixed auto loans, federal or private student loans and personal or small-business loans.
Credit card rates could rise
Americans could see rates increase on credit cards beyond what they’ve seen since the Fed began hiking rates in 2022. Credit cards already have higher interest rates than many other loans, so carrying a balance during these economic times is more expensive. Those with debt who are in a position to pay it off should start making moves to do so.
It’s also not uncommon for lenders to cut credit limits, close accounts or require higher credit scores for approval when the economy is in distress. Lenders took these actions during the Great Recession and early in the COVID-19 pandemic, according to a 2022 report by the Consumer Financial Protection Bureau.
Mortgage rates would likely increase
The real estate website Zillow projects that following the U.S. defaulting on its debts, mortgage rates could rise as much as two percentage points by September before declining. With that, we’d see a massive contraction of the housing market.
A debt ceiling crisis won’t impact those with fixed-rate mortgages or fixed-rate home equity loans. But adjustable-rate mortgage, or ARM, holders may feel these rising rates. Those in the fixed period of their ARM could see rates rise when reaching their first adjustment. Anyone struggling to keep up with payments is encouraged to reach out to their lender early to discuss their options. A HUD-certified housing counselor can help homeowners explore alternatives to delinquency and foreclosure.
If the prime rate (the baseline rate that lenders use to set interest rates for lines of credit) increases, borrowers with variable-rate home equity lines of credit, or HELOCs, will also see their rate climb.
Tax refunds could be delayed
If the debt ceiling isn’t raised, it could take more time for tax filers to receive their refunds — which usually come within 21 days of e-filing. If the government defaults, those who file late run a risk of a delayed refund.
Even the threat of a default can lead to a downgrade of the U.S. credit rating, but it won’t necessarily happen.
“Given the Treasury and FOMC’s commitment to honoring extant Treasuries, the chance of a U.S. credit downgrade has historically been very slim,” Hanson said.
Even if default is avoided, the uncertainty created by brinkmanship on the debt limit has “serious economic costs,” Yellen warned at a press conference in Japan on May 11.
“We could see a rise in interest rates drive up payments on mortgages, auto loans and credit cards,” Yellen said. “We are already seeing spikes in interest rates for debt due around the date that the debt limit may bind.”
Hanson said a default could make it more difficult to finance future spending with debt since fewer people would be willing to hold U.S. Treasuries rather than other sovereign bonds that have a higher credit rating. And also because yields on Treasury bonds would increase in an effort to incentivize investors to buy, at a cost to the Treasury.
NerdWallet writers Kate Ashford, Margarette Burnette, Taylor Getler, Jaime Hanson, Craig Joseph, Melissa Lambarena and Kurt Woock contributed to this article.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
Frugal green living is important for everyone because environmental issues affect all of us, not just the people who can afford to be eco-conscious.
Plus the concept of frugal green means you are saving money! And that is always helpful.
This is why I created this blog, to help people save money, find financial freedom, and have choices in life.
Reducing your carbon footprint is one of the greatest gifts you can give to yourself and the planet.
But how do you save money while also making a difference? It’s possible!
This is why choosing to be frugal green is so important!
These are all frugal ways that I have personally done or heard of other people doing as well. They are tried-and-true methods of living a more frugal life, and I hope that you will find them helpful. Plus help the environment at the same time.
This is a win-win situation.
Have you ever wondered how to be environmentally friendly?
Do you want to save money and the environment at the same time?
This article has 91+ frugal green living tips that will help! Let me know which ones are your favorites!
How to save money and be frugal green?
There are many ways to be frugal green and save money while helping the environment.
Plus in the long run living green costs less.
We will cover ideas for your kitchen, car, shopping and so much more. There are many other ways to be frugal green, so find what works best for you and make a difference!
These are ways to live more sustainably while saving money.
Importance of Sustainability and the Environment
You can save money and help the environment without making any major changes to your lifestyle.
Some easy ways to do this include, but are not limited to, changing your habits at home, buying used instead of new, and being more conscious about how you use energy.
Every day you can make the decision to choose to be a thrifty person.
Top 10 Best Frugal Green Living Tips
In order to save money and be more environmentally friendly, try some of these tips:
1. Reduce your use of plastics. This means bringing your own bags to the grocery store, refusing straws when you order drinks, and not using disposable utensils or plates.
2. Make Recycling a Priority. Recycling is important, and everyone should do their part to make it a part of their everyday routine. It’s not just for plastics and paper- there are many different things that can be recycled. By taking small steps like bringing a reusable coffee mug, we can all make a big difference in the long run.
3. Ride a bike or walk instead of driving. Not only is this better for the environment, but it’s also a great way to get some exercise.
4. Do the “green thing” and buy things secondhand! When you’re considering your lifestyle choices, buying things secondhand is a great way to do the “green thing.” You can save money and help reduce the amount of waste that goes into landfills.
5. Only buy what you need. Many times we buy things out of convenience or wants. Truly evaluate whether the purchase is necessary or if you can save money by buying used.
6. Compost as much as possible. Not only does this help reduce waste, but it also helps create nutrient-rich soil for plants.
7. Consider your carbon footprint. Americans use a tremendous amount of resources and impact the planet in many ways. We consume a lot of energy, materials, and water. Our lifestyles have a big environmental impact. There are many ways to be frugal and environmentally conscious, including recycling and reducing food waste.
8. Cut Out Paper and Plastic Waste. One way to be more frugal and green is to reduce the amount of paper and plastic waste you produce. Technology has greatly improved in many ways to cut down on plastic and paper consumption, so take advantage.
9. Think Before You Throw Away and Buy New. We are way too quick to toss things and replace them without even thinking. Next time before you throw it into the landfill, think about how you can reuse, repurpose, or give away the item.
10. Upcycle. The concept of upcycling has gained popularity in the past years. It is a simple way of taking something ugly and worn down, putting some TLC into it, and making it into something beautiful.
Related Reading: Top 10 Influential Frugal Living Tips with a Big Impact
Being frugal and being environmentally conscious may not always go hand in hand.
In some cases, you may have to make a choice between buying an eco-friendly item that is more expensive or sticking with a cheaper, non-sustainable option.
However, many of the aims of frugal families link to eco-friendly living.
Below are simple sustainable products to consider buying instead of their wasteful counterpart.
Reusable food bags are a great way to reduce your environmental impact while also saving money.
There are a variety of different types of food grade eco-friendly bags on the market today. They are made of safe, eco-friendly materials that will not harm the environment and they are lead-free, chloride-free, and BPA free.
Bamboo straws are a great eco-friendly alternative to plastic straws.
They are compostable, meaning they will never pollute the environment or harm animals. Bamboo straws are odorless and tasteless, so you can use them with any drink. Reusable bamboo straws make a great addition to your everyday kitchen supplies.
These dish cloths are also super absorbent and work better than microfiber cloths and paper towels for cleaning.
They are made from cellulose, which is a soft material that is gentle on your hands. They can be used for a variety of tasks, such as dishwashing, wiping down counters, and polishing furniture. And they are durable enough to be reused multiple times.
A reusable K-cup is a great way to reduce your environmental impact while enjoying your favorite cup of joe.
Works perfectly in our house! Not only do they help you save money in the long run, but they also allow you to customize your coffee experience like never before. Plus, using a reusable k-cup is an easy way to reduce waste and help preserve our planet.
Frugal Green in the Kitchen & Table
There are a number of ways to save money and be frugal green in your kitchen.
Use a Reusable Coffee Mug. So simple and easy to do. Pick your favorite up here.
Skip plastic straws. This is a simple thing to do for the environment. Buy reusable straws. And don’t forget the cleaning brush (hint… the cleaning brush will save you from throwing away your reusable straws.)
Skip the Paper Plates and Plastic Utensils. You will be shocked to see the waste this creates. Invest in quality dishes you like and don’t be afraid to wash them up.
Invest in a Water Filter. If you’re looking for ways to improve your diet and save money, consider investing in a water filter. We upgraded to an under-the-sink mount water filter and it was the BEST choice ever! This is the exact one we bought.
Cook at Home. Making your own meals can save you a lot of money in the long run. You’ll be surprised at how much money you can save by cooking simple meals yourself.
Grow a Kitchen Garden. One way to reduce your food costs is to grow some of your own fruits and vegetables. You can start with a kitchen garden, which is a small plot of land near your house where you can plant fruits, vegetables, and herbs. if you don’t have space, check out these Aerogardens.
Stop Using Plastic Wrap. To reduce your reliance on plastic wrap is to invest in some beeswax food wraps. These work just as well as plastic wrap, but because they’re made of natural materials, you can reuse them over and over again!
Air dry dishes. This is because air-drying dishes use less energy than running a dishwasher and takes up less time.
Stick With Instant Pot. When you’re cooking, try to use a microwave or pressure cooker instead of your oven. Ovens produce a lot of heat and use up a lot of energy, so using these other appliances will help conserve resources. This is the Instant Pot/Air Fryer Combo I love (and use ALL.THE.TIME)!
Frugal Green Cooking & Menu Plan
This may not seem as environmentally conscious as other areas, however, it will help your wallet more.
Buy produce at the local market. Fruits and vegetables tend to be cheaper at the market than they are at the grocery store, so this is a great way to save some cash while also doing your part for the environment. Plus you save on the costs of trucking in the produce and support local.
Join a CSA. These community-supported agricultures have become popular ways for consumers to buy local and seasonal food directly from the farm. You normally have a dollar amount buy-in or a certain number of hours worked for food.
Enjoy Organic Foods. Organic foods may be worth the extra cost – organic food has a higher nutritional value than conventional food, plus it’s better for the environment because it doesn’t require pesticides or chemical fertilizers.
Go Meatless. Americans, on average, eat twice the recommended amount of meat. Meat production is one of the leading causes of greenhouse gas emissions and climate change. Consider your carbon footprint when making dietary decisions.
Shop Grocery Weekly Ads. Start by looking out for food sales at the grocery store. This can help you save money while also being more mindful of the environmental impact your food choices have.
Meal Plan. One great way to save money on groceries is to plan your meals ahead of time. This allows you to be more strategic in your shopping and can help you avoid buying items that you don’t need.
Use Leftovers. When you’re cooking a meal, always cook a little more than you need. This way, you’ll have leftovers that can be used to make another meal or stored in a glass jar for later use.
Pantry Challenge Time! One way to save money on your groceries is to consider doing a pantry cleanse. This means eating all the foods in your pantry that are sitting there. Then, only buy groceries that you know you’ll use. This can help you avoid overspending and wasting food.
Skip Pre-Made or Boxed Mixes. Making your own is a more affordable option, as pre-made or boxed mixes can be expensive. There are many recipes online that are healthy and affordable, and by planning ahead you can save time and money.
Shop the Perimeter of the Grocery Store. A lot of people want to save money and be more environmentally friendly, but don’t know where to start. One way to do both is to try to stick to the perimeter of the grocery store. This means avoiding the center aisles, where most processed foods and extra packaging are found.
Buy Generic Brands. Generic brands are less expensive than their name-brand counterparts. This is because generic brands do not have the same marketing and advertising costs as name-brand products. Many times the quality is the same or better!
Key Frugal Green Ideas While Shopping
These are environmentally friendly ways to improve your shopping habits. Many people may call this frugal minimalism.
Donate First. It’s easy to just dispose of something when it’s no longer needed, but sometimes that thing could be reused or recycled. For example, if you have an old TV that isn’t being used, try selling it or donating it before throwing it away. There are a lot of people who might need your old TV, and you can get some money for it if you sell it.
Buy Refurbished. On the other hand, if you’re in the market for a new TV, think about buying one that is refurbished instead of buying a brand-new one. Refurbished electronics often come with the same warranty as new ones and cost way less than buying a brand-new model.
Try Fixing First. Just because something is broken doesn’t mean you have to throw it away! Many times, things can be fixed very easily and cheaply. If your electronic device is leaking toxic chemicals, however, you should definitely not try to fix it yourself–take it to a professional recycler instead.
Reuse your own grocery bags. This will save both money and the environment, as disposable grocery bags often end up in landfills. Also, many stores are now charging for grocery bags, so save a few bucks at the store.
Do not buy new books. You can borrow books from the library or from friends, or you can buy them used. Buying new books wastes resources, and it’s often cheaper to buy them used.
Use the Library. The library has a wealth of books, movies, and music that you can borrow for free. Plus you can find access to tons of digital resources as well.
Shop Second-Hand Stores for your needs. These are great places to find clothes, furniture, and other household items at a fraction of the price.
Stop buying the paper version of the newspaper. Instead, get the daily news online for free. Not only will you save a few bucks each month, but you’ll also help reduce deforestation.
Shop at Sustainable Businesses. Thankfully, many companies focus on being sustainable businesses by making changes from production, to packing to shipping. As a whole, the industry could do better to create less waste. One sustainable company is the Everyone Store.
Think Twice on Gifts. Really consider what someone would want for a gift. Too many times we opt for quick and cheap gifts that are materialistic in nature and never be used. So, consider some of these money gift ideas instead.
Frugal Green Cleaning Products that Are Eco Friendly
You may not be environmentally aware of the hazards of using most cleaning products. In fact, you should check your normal cleaning products with EWG’s database and their standards.
DIY Baking Soda & Vinegar. Using green cleaning products is usually more expensive than traditional ones. Baking soda and vinegar are easy-to-find, cost-effective alternatives to environmentally unfriendly cleaners.
Use Microfiber Cloths. Personally, this is my favorite way to cut the expansive (and not-good-for-you) cleaning products. These microfiber cloths are just as effective at cleaning and will save you money in the long run.
Skip the Disposable Rags. Use up-cycled rags from old clothes to pick up spills.
Stop Using Air Fresheners. Reduce or eliminate the use of air fresheners, which release harmful chemicals into the air. Plus they are super costly!
Frugal Green & Energy Use in the Laundry Room
Use Detergent Powder. Washing your clothes in a washing powder uses less water than liquid tabs, which come in more plastic packaging. Also, the powder is a much better environmental solution and better for your body. This is the detergent powder we use and love (and those I recommended it to love it as well)!
Sniff Test. Implement the sniff test and only wash clothes when they fail the sniff test. Beware of this recommendation with teenagers!
Line Dry Clothes. Additionally, line drying clothes throughout the year can save a ton on your energy bill! Plus your clothes do not wear as quickly.
Watch Your Hot, Wash in Cold. One easy way to save money on your household bills is to reduce the amount of hot water you use. Heating water takes up a large percentage of the energy used in households, so by washing your clothes in cold water, you can cut down on your energy usage significantly.
Frugal Green in the Bathroom & Morning Routine
Use Less Shampoo or Soap. In order to save money on your grocery bill, you can use less shampoo than is recommended. If everyone did this, it would result in significant monetary and plastic savings.
Turn the water off while brushing your teeth. It is important to turn the tap off while brushing teeth in order to conserve water. Many people forget to do this, and as a result, millions of gallons of water are wasted every year.
If it’s yellow, let it mellow. If the toilet water is yellow, it’s ok to let it mellow. You don’t have to flush to turn it off every time. Thanks to auto-flush toilets in most places this is very common for people to forget to flush at home.
Take Cooler Showers. This may not be everyone’s favorite. But take a cool shower rather than a piping hot shower. Most of the energy used is the hot water heater warming up the water.
Use Every Last Drop! There are a few ways to get the most out of your products and conserve them- one way is to leave bottles upside down for a couple of hours after you’ve used them so that you can get the last bit of product out. You can also roll up toothpaste tubes to get the remaining paste out. Here is a great product to help you squeeze every expensive ounce out.
Related Reading: Billionaire Morning Routine: How To Achieve Success In Life
Green Lot with Frugal Green Landscaping
Xeroscape Your Lawn. Lawns are often seen as a status symbol, but they’re actually quite expensive and environmentally damaging. They require large amounts of water, fertilizer, and pesticides to maintain, which can leach into the groundwater and pollute the environment.
Change Mowing Schedule. Additionally, lawn mowing emits greenhouse gases that contribute to climate change.
Water Less Often. While this sounds great in theory, you may not be able to fully switch to xeriscaping your yard. If you can’t switch, then check out this Rachio to lessen your dependence on water.
Frugal Green Home Ownership
There are many ways to save money and be more environmentally conscious at the same time when owning a home.
Your home is probably one of your biggest expenses, so it’s important to take measures to conserve energy and save money. Plus there are many ways to reduce the amount of energy your home consumes!
Home Improvement Math. When considering whether or not to make an improvement to your home in order to reduce your carbon footprint, always do the math to see if the improvement will actually pay for itself. Sometimes it will and sometimes it won’t so be sure to weigh all of the options before making a decision.
Downsize Your Home. If you live in a large house, consider moving into a smaller one. This will help you save on your energy bill and make your home more efficient.
Install low-flow fixtures. One way is to install low-flow fixtures, such as showerheads and faucets. This will reduce your energy use and, in turn, your monthly bills. You can also save water by taking shorter showers.
Hang UV Blocking Curtains. By stopping the sun from heating up your house with curtains during the day, you can save on cooling costs in the summer. Using UV blocking curtains is something we did and notice a significant difference in the summer and winter.
Run Appliances with Full Loads Only. Wait until you have a full load of dishes or laundry before running the dishwasher or washing machine. You would be surprised at the amount of energy and water it takes to run those appliances.
Be Reasonable with Air Conditioning Temperature. In the summer, don’t crank up the air conditioning to save on your energy bill. You can also set your thermostat a couple of degrees higher in the summer to save money. Also, you may want to start cooling your house earlier in the day to prevent your AC unit from working overtime and consuming more energy.
Program Your Winter Heating Temperature. In the UK, A/C is not as common as it is in other countries. Central heating is used more often and is set to a lower room temperature for the summer and a higher room temperature for the winter. This is because people want to save on their energy bills.
Open Windows to Cool House. When the weather is nice, open your windows to allow for natural cooling. This is a simple and cheap way to cool your house. Especially after a nice cool thunderstorm.
Buy Energy Efficient Appliances. Energy-efficient models might be more expensive in the short term, but they will save you money in the long run and help reduce your environmental impact. However, these products should only be bought when the older model is worn out–don’t replace something just because it’s energy-efficient!
Replace Windows. On the one hand, it’s a great idea to replace your windows with more energy-efficient models if you’re staying in your home for many years. However, if you plan on moving within a few years, it might not be worth the investment. You’ll need to weigh the cost of the windows against how much money you’ll save on your monthly energy bill.
Get a programmable thermostat. Programmable thermostats are a great way to save money on your energy bill. You can set them to turn off or down when you’re not at home, or during times of the day when you don’t need as much heating or cooling.
Look for Energy Leakage. The typical older home has enough energy leakage that it’s the equivalent of leaving your front door open all year long. You can combat this by installing weather stripping and caulking around doors and windows and adding insulation to your attic. Most utility companies offer an energy audit.
Weatherize your Home. Weatherizing your home is a great way to improve energy efficiency and save money on your energy bills. There are many things you can do this and varies on the area of the world you live in.
Sustainable Frugal Green Transportation
Ditch the Car Completely. One of the biggest expenses for many people is their car. Whether you’re paying for car payments, insurance, gas, or maintenance, it can be a lot of money. You can eliminate this expense by ditching the keys and taking public transportation. Not only will you save money on your monthly expenses, but you’ll also help the environment!
Buy Hybrid Cars. Hybrids cars are expensive but they could help you save money on fuel in the long run – hybrids tend to have lower emissions than conventional cars. So, it might be time to say bye to that beater car.
Drive Less and Play Your Route. Driving less is the biggest way to reduce fuel-guzzling trips. Take it a step further with UPS research on their strategic delivery methods and focus on making only right-hand turns.
Carpool Whenever Possible. carpooling is a much more green choice than driving alone.
Look Into Car Sharing. When you only need a car occasionally, or for short trips, it might be more convenient and affordable to use a car-sharing service. Car-sharing services offer the opportunity to have access to wheels when you need them, and they’re flexible and convenient for short trips.
Invest in Electric Scooter. This mode of transportation is the uber-popular. You don’t need cash for gas, money for registration fees, and completely reliable to get around quickly. Check out the best electric scooters on the market.
Ride a Bike. A commuter bike is much cheaper than a car. Plus you get the added benefits of exercise and no carbon waste. Or upgrade to an E-bike.
Telecommute. If you can do your work remotely, then telecommute more often than not. This will save on transportation costs as well as pollution.
Walk More Often. Plan your day around being able to walk places that take under 30 minutes to get there. Then, it is better to walk than drive. Plus you can hit your 10000 steps quicker. It is a triple for the win – health benefits, free exercise, and fresh air!
Don’t Run Your Engine Unnecessarily. Leaving your engine running unnecessarily while stationary can waste fuel and cause environmental damage. Make sure to turn your engine off when you’re not moving to save money and help the planet!
Drive More Efficient. When it comes to saving fuel, one of the best ways is to drive more slowly and efficiently. This will help you save petrol or diesel and reduce your carbon footprint. For example, slowly put your foot on the accelerate to maintain a speed.
Frugal Green Budgeting Per Month
Choose To Save Rather Than Spend. Every tie you actively choose to save your money rather than spend it. You help the environmental impact. We have plenty of popular money saving challenges to help you save more money today.
Pay Bills Online. When you pay bills online, you can save a lot of time, space, and money. You can also save paper by paying your bills online–instead of receiving paper statements in the mail, you can access them online.
Find Free Things to Do. This one is a win-win for frugality environmentalism. Focus on finding activities from this list of things to do with no money. Many of them are already frugal green wins.
Opt for Paperless. And finally, if you pay your bills online, you may automatically receive discounts on some of your monthly bills! Many companies now charge a $2-5 paper statement to be mailed.
Focus on Financial Independence. This may seem like a crazy idea, but it is true. The more you save, the faster you reach financial independence. In fact, this is with the Frugalwoods decided to be frugal in the first place.
Follow Simple Frugal Living Green Ideas – Way to Go Green
Reduce, reuse, recycle. This old mantra is more important than ever in today’s world. By recycling everything you can, you can help conserve resources and keep waste out of landfills.
Your Mindset is Everything. Just like with anything, if you decide to commit yourselves to become environmentally aware, then you are likely to succeed. You don’t have to become extremely frugal overnight. You just have to remember that mindset is everything in this process.
Turn off electronics when not in use. This includes televisions, computers, and other appliances. By turning them off, you’re conserving energy (and saving money). Plus some older appliances might be fire hazards if left plugged in.
Stop Junk Mail. One way to reduce the amount of junk mail you receive is to go through your postal mail and ask to be removed from lists you’re not interested in. This can be done by contacting the Direct Marketing Association (DMA) or specific companies that send you unsolicited mail.
Grab a Sweatershirt or Blanket when Cold. Instead of automatically adjusting the programmable thermostat higher, you can also save by wearing a sweater or using a blanket. Maybe turn on the fireplace before putting the heating on.
Invest in Renewable Energy. In today’s world, it is more important than ever to invest in renewable energy. There are many reasons for this:
First and foremost, using renewable energy helps to reduce our dependence on fossil fuels, which are finite and contribute to climate change.
Renewable energy also creates jobs and supports local businesses.
And finally, investing in renewables reduces our greenhouse gas emissions, helping to fight climate change.
In the long run, renewable energy can save you money and reduce emissions by providing power more reliably, often more cheaply than a traditional power source.
Are You Ready Live Life Frugal Green?
Living a more frugal lifestyle is good for the environment because it costs less.
It doesn’t take much to make small changes in your life that will have a big impact on the planet. For example, consume less and you’ll be doing the most earth-friendly thing you can do.
There are dozens of ways to save money and be more environmentally conscious which we covered in this post.
Being frugal and being green often go hand in hand.
However, most people lose steam after just a couple of weeks. So, do not attempt to do each frugal green living habit.
Pick your top 3 with the biggest impact.
Add one another 1-3 frugal living tips every month or so.
Over time, you will be surprised to see how easy it is to live frugal green, while also helping you to save money while also protecting the environment.
You can be the frugal green girl or gal with a few of these simple habits. Or choose to follow a frugal blog or frugal forum.
Know someone else that needs this, too? Then, please share!!
If you’re in the market for a conventional or Department of Veterans Affairs (VA) home loan and come from a military background, a USAA mortgage can be your best option.
This mortgage lender also offers home loans for first-time homebuyers with low down payment requirements. However, you won’t be able to get approved for a USAA mortgage if you don’t qualify for membership or want an FHA or USDA loan.
USAA overview
United Services Automobile Association (USAA) started in 1922 as an automobile insurance company for military officers. Over the decades, the organization has expanded its product offerings to include mortgages, consumer loans, banking accounts and various types of insurance.
Current members of the U.S. Armed Forces, veterans and their immediate families are eligible for USAA membership. It’s possible to apply for conventional, VA and jumbo loans to buy a house or refinance an existing mortgage.
Your mortgage options include:
Conventional: Fixed-rate purchase, low down payment purchase, rate-and-term refinance and cash-out refinance
Jumbo: Conventional purchase, VA purchase and VA jumbo IRRRL
Currently, Mr. Cooper (formerly Nationstar) services all USAA Bank mortgages, and you can mail a payment to the USAA headquarters by mail or schedule payments online or by phone.
Find the right VA loan: Best VA mortgage lenders
How to qualify for a USAA mortgage
If you’re not a USAA member yet, you’ll need to apply for membership. Membership is open to U.S. military members, veterans, their spouses and children of USAA members.
Some of the initial borrower requirements include:
Credit score of 620 or above for all loans.
Debt-to-income (DTI) ratio of 50% (lower for conventional loans). It’s variable for VA-backed loans.
Two years of tax returns.
Pay stubs for the last 30 days.
W-2 forms for the past two years.
Bank and investment account statements.
You will also need to present your Certificate of Eligibility (COE) if you’re applying for a VA-backed home loan.
The minimum loan amount is $50,000 on all products and up to $3 million with a jumbo loan.
Additional requirements may apply for a specific loan program. For example, you may need to complete a free online course for the low down payment conventional purchase loan.
How to apply for a USAA mortgage
You can apply online anytime or by calling a loan officer during the week. Depending on your circumstances, you may need to call to start the application process.
The first step is getting mortgage preapproval. USAA will do a hard pull of your credit report in order to provide a rate quote. You should also have your desired purchase price and down payment amount in mind to estimate your loan-to-value (LTV) ratio.
After comparing your loan options, you will apply to confirm your eligibility and finalize your interest rate, term and loan APR.
Many loan programs require a property appraisal to complete the application process. The VA IRRRL loans most likely won’t need an appraisal.
The average duration for the underwriting process is from 30 to 45 days on purchase and refinance loans.
Compare the average rates: Current mortgage rates
How to pay your USAA mortgage online
You can schedule one-time payments and enroll in autopay through your USAA account. You can also watch how-to videos on coordinating payments and linking your accounts at USAA’s payment support site.
Pros of a USAA mortgage
Low down payment loan options.
Positive customer service ratings.
Can apply online or by phone.
Specializes in VA home loans.
Cons of a USAA mortgage
No FHA, USDA or home equity loans.
Must contact the lender to estimate rates and fees.
Strict membership requirements.
No phone support on weekends.
USAA perks and special features
Here are some of the best aspects of getting a mortgage through USAA.
Savings and discounts
The lender doesn’t offer interest rate discounts or other incentive programs to reduce your closing costs. Like other banks, you can purchase discount points or potentially roll your lender fees into the loan which may be of benefit. Additionally, all loans have a fixed interest rate.
As many USAA members are eligible for VA loans, they can avoid common mortgage fees including private mortgage insurance (PMI). These loans also have low down payment requirements compared to a conventional loan. The lender usually won’t charge origination fees on VA purchase loans or refinances, but a one-time funding fee and origination fee (up to 1% or a maximum of $1,295) for conventional purchase and refinance loans applies.
As USAA also offers homeowners insurance and auto insurance, you might receive a 10% discount on your home insurance premium by bundling these products. However, you should compare rates and coverage from several insurance providers to find your best option.
First-time homebuyer loan
While you cannot apply for FHA loans through USAA, the lender offers first-time homebuyer loans that require a down payment of 5% or less. You’re eligible for this 30-year conventional loan when you haven’t owned a home in the past three years, but you might be required to complete an online education course to qualify.
You may also consider this loan type if you’re not eligible for a VA home purchase loan.
Easy to apply
Borrowers can apply for a mortgage online or by phone and receive hands-on help. After getting approved, you can continue to work with USAA if you start to struggle with affording your mortgage payment. You can call the mortgage assistance department (1-855-430-8489) to review your repayment options.
How USAA could improve
There are several downsides that may hinder you from getting a USAA mortgage.
Provide additional loan options
While the conventional, VA and jumbo mortgage options will suit many borrowers, not having access to FHA loans, USDA loans or adjustable-rate mortgages (ARM) can make it harder to compare your loan options.
USAA also doesn’t offer home equity loans which are a second mortgage that prevents refinancing your existing mortgage balance. To tap your equity through USAA, you must apply for a conventional or VA cash-out refinance which replaces your existing rate and term along with having higher closing costs as the loan balance is bigger.
Offer weekend phone support
While the USAA mortgage team receives consistently high marks for customer service, you can only call its loan officers on weekdays and there are no physical branches.
Other mortgage lenders might be better if you anticipate completing the application steps over the weekend. However, you can start and monitor the application process online 24/7.
Have less restrictive membership requirements
You must have military experience or be an immediate relative of a USAA member to join and apply for financing.
USAA customer service and reviews
You can speak with a USAA loan officer by phone Monday through Friday from 7 a.m. to 8 p.m. CT. Keep in mind, however, that phone support isn’t available on the weekends.
The lender has 171 mortgage-related complaints in the Consumer Financial Protection Bureau (CFPB) Consumer Complaint Database. This number is relatively low and borrowers primarily mention challenges with scheduling payments. Some also report troubles advancing through the application process without delays.
This institution has negative Better Business Bureau (BBB) and Trustpilot ratings but mainly focus on its banking and insurance products.
USAA mortgage alternatives: USAA vs. Navy Federal vs. Chase
USAA is an excellent lender for VA and conventional loans but doesn’t offer as many specialty programs. As a result, you may consider one of these two alternatives which offer more loan types with low down payment requirements or the ability to borrow from your home equity.
Navy Federal Credit Union has similar membership requirements as USAA Bank and caters to the military community. Borrowers ineligible for VA loans may consider the Homebuyers Choice or Military Choice loan programs that require no down payment or private mortgage insurance. This lender also offers home equity loans and lines of credit (HELOC).
If you don’t come from a military background or want to work with a brick-and-mortar national bank, Chase Bank is an excellent option. Its mortgage options include conventional, FHA, VA and jumbo loans. Home equity products are available too and the lender offers relationship discounts for qualified borrowers.
Frequently asked questions (FAQs)
USAA uses Mr. Cooper (formerly Nationstar) to service its mortgages although you can schedule payments through your USAA member dashboard or by contacting USAA.
No, USAA only offers conventional, VA and jumbo home purchase loans as well as mortgage refinancing.
A minimum 620 credit score is necessary for conventional and VA home loans. Other factors also apply including your DTI ratio, current income, employment history and down payment requirements.
Yes, you can get pre-approved for a USAA mortgage online or by phone after agreeing to a hard credit check and submitting the necessary initial documents such as proof of income, bank statements and recent tax returns.
One popular way people pay off debt is to use the equity in their homes. Home equity loans and home equity lines of credit (HELOCs) let borrowers use their homes as collateral in exchange for financing. Just be sure to factor in the risks if you’re considering this option. The lender can seize your home if you can’t make the payments.
Who this is best for: Borrowers who have built up equity in their homes.
Who this is not good for: Those unsure of their ability to maintain the monthly payments.
Home equity loan versus debt consolidation loan: Home equity loans and HELOCs may offer lower rates than debt consolidation loans, though they come with more risks, since your home is used as collateral.
Debt relief services
Debt relief services, including debt settlement companies, offer another way to deal with your debt if you can’t qualify for a consolidation loan. These companies reach out to creditors and debt collectors on your behalf and try to settle the debt for a lesser amount.
If you decide to pursue debt relief services (perhaps as an alternative to bankruptcy), be aware that the fees these companies charge can be steep. Take your time to fully research fees, reviews and other details before applying. It’s also wise to compare multiple debt relief companies before you commit.
Who this is best for: Borrowers who are experiencing financial hardship and cannot pay their debt.
Who this is not good for: Those with a thin credit history or less-than-stellar credit score.
Debt relief services versus debt consolidation loan: Unlike debt consolidation loans, debt relief services aim to eliminate some of your debt without you having to pay it. With that said, pursuing debt relief is a risky move, and it can damage your credit score.
Credit counseling
Another option that can help you get debt under control is credit counseling. Credit counseling companies are often (though not always) nonprofit organizations. In addition to debt counseling, these companies may offer a service known as a debt management plan, or DMP.
With a DMP, you make a single payment to a credit counseling company, which then divides that payment among your creditors. The company negotiates lower interest rates and fees on your behalf to lower your monthly debt obligation and help you pay the debts off faster.
DMPs are rarely free, though, even if they’re done by a nonprofit credit counseling service. You may have to pay a setup fee of $30 to $50, plus a monthly fee (often $20 to $75) to the credit counseling company for managing your DMP over a three- to five-year term.
Who this is best for: Borrowers who need help structuring their debt payments.
Who this is not good for: Those with little wiggle room in the budget.
Credit counseling versus debt consolidation loan:With a debt consolidation loan, you’re in control of your payoff plan, and you can often apply with few fees. With credit counseling, a third party manages your payments while charging setup fees.
Balance transfer credit card
With a balance transfer card, you shift your credit card debt to a new credit card with a 0 percent introductory rate. The goal with a balance transfer card is to pay off the balance before the introductory rate expires so that you save money on interest. When you calculate potential savings, make sure you factor in balance transfer fees.
Keep in mind that paying off existing credit card debt with a balance transfer to another credit card isn’t likely to lower your credit utilization ratio like a debt consolidation loan would.
A debt consolidation loan is also going to offer higher borrowing limits, enabling you to pay off more debt, as well as fixed monthly payments, which make it easier to budget and stay disciplined with paying off debt.
Who this is best for: Borrowers who can pay off existing debt quickly.
Who this is not good for: People with a young credit history or a less-than-average score.
Balance transfer credit card versus debt consolidation loan: Balance transfer cards are often the best choice for borrowers who have the means to pay off their debt within 18 months, which is a standard 0 percent APR period. If you need longer to pay off your debt, or if you have a lot of debt, a debt consolidation loan is a better choice.
Save more, spend smarter, and make your money go further
If you dream of having a baller bank account and the freedom to kick back without a financial worry in the world, it’s possible to hack your spending habits until you’re sitting on a comfy cushion of cash. And since studies show most of us can adopt new, long-lasting behaviors after just three weeks, you could be well on your way to a richer life by the end of the month.
Let go of any worries about your bank account balance, and start living your best life today. We challenge you to take the next 21 days to establish new spending habits! Which of these money-saving ideas will YOU commit to?
WEEK 1 – Establish a Baseline
Start the 21-Day Challenge by figuring out where you stand financially and which expenses you can temporarily trim without shocking your system.
Identify what’s dragging you down
Take a good look at last month’s expenses to get an idea of how much you spent and what you bought. Budgeting apps like Mint can help you by importing and categorizing your electronic transactions in minutes, making it easy to spot areas where you’re overspending.
Identify Unnecessary Expenses: Keep an eye out for businesses you regularly spend small sums of money with and put them on a blacklist. Keep that list on your phone or in your wallet.
Don’t Tempt Fate: Avoid temptation by not carrying cash or taking a different route to work.
Buy needs, not wants
It’s no secret that the best way to save money is to cut out impulse shopping, and only buy absolute necessities.
Feast Affordably: Go food shopping once a week and stick to the list you brought with you. Eat breakfast at home, pack your lunch for work and prepare dinner in your own oven.
Pass on Premium Products: From clothing to electronics to the type of gas you put in your tank, skip the top-shelf items in favor of their more-affordable alternatives.
Use what you’ve got
Another great way to cut expenses is to be resourceful about what you’ve got lying around the house. You don’t need to start making your own soap like you’re the newest member of Fight Club, but you’ve likely got some stuff you could be putting to good use.
Expand Your Recipe Repertoire: Make homemade meals using sites like MyFridgeFood.com that let you to plug in the ingredients you have before telling you what recipes you’re equipped to cook.
Pay in Other Ways: Don’t eat out anywhere without a coupon or gift card.
Enjoy Entertainment You Own: Skip the theater this week and dust off an old DVD instead. Or start reading a new book if it’s been a while since you cracked one open.
WEEK 2 – Cut Off Some Companies
Making a few quick phone calls during the second week of this 21-Day Challenge might save hundreds on recurring expenses, and save you a mountain of money over the years.
Explore your options
Odds are that a talking gecko and an aproned brunette have been jockeying for your insurance dollars for quite some time. Maybe one of them can save you some scratch?
Inquire about Insurance: Collect quotes from competing insurance companies to see if another company offers you a better deal.
Channel Your Inner De Niro: Test your acting skills by threatening to cancel your cable or cell service because your bill’s too high. Most companies will cut you a deal before letting you leave.
Chat up Creditors: Got credit card debt? Call up your card issuer and ask for a reduced rate, or transfer your balance if it means long-term savings.
Break up with brands
Why buy the paper towels with the highest thread count or use the same sandwich bags as the Kardashians, when brand XYZ does the same job? Choosing store-brand products is an effective cost-cutting method that can save you a bundle at checkout.
Focus on Price, Not Packaging: From paper towels and cleaning supplies to painkillers, opt for more affordable off-brand products on your next trip to the store.
Ditch some subscriptions
Now that you’ve watched Beyoncé’s Lemonade, do you still need that subscription to Tidal? Canceling your underused memberships could supercharge your savings.
List Your Memberships: Make a list of any subscriptions or memberships that renew on a monthly or annual basis. Only keep the ones you can’t live without.
Flex for Free: Instead of renewing your gym membership, exercise outdoors, or take advantage of free or donation-based classes offered by many yoga studios and gyms.
Opt Out of Annual Fees: If you have a lengthy credit history and not a lot of debt, consider canceling any credit cards with an obligatory annual fee.
WEEK 3 – Hone New Habits
The home stretch of our 21-Day Challenge is all about the little things. Making small, subtle changes in your daily life and routine can lead to big savings over time.
Slay some vampires
Cut your electricity bill by unplugging “vampire appliances” that suck up power even when they’re not being used.
Stop Paying for “Standby”: If you only use your printer, stereo, or video game console a few times a week, don’t leave those bad boys plugged in day and night. The same goes for any appliance with a digital clock or standby mode.
Unplug Your Internet: No one at home surfing the web while you’re at work? Wireless routers rack up kilowatt hours faster than just about any other appliance. Turn off or unplug your modem and router before leaving home and you could save a chunk of change.
Adjust Your Temps: Turn off your heater’s pilot light during warmer months, and learn to use your thermostat’s built-in timer to reduce your bill. Raising your refrigerator temp a few degrees can also make a measureable difference in your electricity usage.
Go swapping, not shopping
Itching for something new in your life? Instead of whipping out your wallet, tap into your network of friends, family and coworkers to find a slew of items you can breathe new life into.
Exchange Entertainment: See if any of your friends are open to trading books, DVDs or video games.
Purge, Not Splurge: Take items you haven’t worn in a year to a thrift store or consignment shop, some of which offer store credit for something new to you.
Trade Your Threads: Rather than hitting up the mall, organize a clothing swap to trade outfits and accessories with your friends.
Financial freedom starts today
Start Mint’s 21-Day Challenge today and see how much of a difference you can make on your bank account’s bottom line. Tweet or comment about your cost-reduction strategies this month, and stay tuned for our recap.
Save more, spend smarter, and make your money go further
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