Your 40s can be a pivotal decade in your life. It’s typically a time of peak earnings, growing family responsibilities, and an increased focus on long-term financial stability. You may have a house, kids, and a busy job. College expenses may be looming. Maybe you’re hatching a plan to start your own business or buy a beach house that’ll one day be your empty-nester home.
To navigate these years successfully, it’s essential to make strategic financial moves that can secure your future and make your plans and dreams a reality. Here are some critical financial planning tips to consider as you move through your 40s.
7 Financial Moves to Make During Your 40s
In your 40s, you’re old enough to know what you want and likely have enough earning years ahead to achieve your goals — if you manage your money right. The following strategies can help you build wealth in your 40s.
1. Maintain or Replenish Emergency Funds
Life is full of unexpected twists and turns. Not all of them are fun, such an expensive car or home repair, a medical emergency, or losing your job. An emergency fund offers financial stability during a stressful time. It also saves you from running up expensive debt that could derail your financial goals.
A general rule of thumb is to have six to 12 months’ worth of living expenses stashed away for the unexpected. If you already have an emergency fund but it has been partly or fully depleted, you’ll want to prioritize replenishing it to maintain financial security.
Consider setting up automatic transfers into savings to build your emergency fund consistently. Keep these funds in a liquid, easily accessible account, such as a high-yield savings account, to ensure you can access the money quickly when needed.
2. Manage Your Debt
Debt management is a crucial aspect of financial planning at any age, but it becomes even more critical in your 40s. Since high-interest debts, like credit card balances, can significantly hinder your ability to save and invest for the future, you’ll want to prioritize paying them off as quickly as possible.
One strategy that can help is the avalanche payoff method. Here, you list your debts in order of interest rate from highest to lowest, then put extra money toward the highest-interest debt, while continuing to pay the minimum on the others. Once that debt is paid off, you put your extra funds toward the debt with the next-highest rate, and so on.
Alternative approaches to paying down high-interest debt include getting a low- or no- interest balance transfer credit card or taking out a personal loan for debt consolidation with a lower rate than you are paying on your cards.
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3. Revisit Retirement Saving
In your 40s, you’re roughly at the midpoint between entering the workforce and traditional retirement age. How you invest and save for retirement at this point in your career can strongly impact your future assets and ability to one day retire comfortably.
If you’re not currently contributing to a retirement plan, such as a 401(k) or individual retirement account (IRA), now’s a good time to start. If you have been, it’s time to assess your progress. Consider how much of a nest egg you will need to retire and, using an online retirement calculator, whether your current plan will get you there.
If you’re behind on your savings, consider stepping up your contributions or, if you’re already contributing the max allowed, making “catch-up” contributions down the road. Starting at age 50, the IRS allows higher maximums designed to help people catch up on their retirement savings goals.
4. Plan for Childrens’ College Expenses
If you have kids, planning for their future education expenses may be top of mind. College costs continue to rise, and early planning can alleviate future financial stress. If you haven’t started saving for college expenses, you may want to explore opening a 529 college savings plan, which offers tax advantages and can be a flexible way to save for educational expenses.
An online college cost estimator can help you determine how much you need to stash away each month or year, based on the year your child will likely attend college and the type of school they might choose.
Just keep in mind that it’s important to balance college savings with other financial goals, like retirement. As kids get closer to leaving the nest, you may also want to encourage them to apply for scholarships and grants, and explore financial aid options.
5. Choose or Reevaluate Insurance Coverage
Insurance is an important component of financial planning in your 40s. You’ll want to evaluate your current insurance coverage and make sure it’s adequate to meet your family’s needs. This includes not only health and home insurance, but also life and disability insurance.
Life insurance provides financial security for your family should you die prematurely. If you don’t currently have a life insurance policy, consider purchasing one. If you do have one, you’ll want to make sure your policy’s coverage amount is sufficient to cover your family’s current living expenses, outstanding debts, and future financial needs, such as college tuition for your children.
It’s also a good idea to review your disability insurance, which protects your income if you’re unable to work due to illness or injury. Many companies provide a policy through work. However, you may want to consider supplementing employer-provided coverage or, if you’re self-employed, getting your own policy. This offers a different, but equally important, safety net for you and your family.
Recommended: Which Insurance Types Do You Really Need? Here Are 6 to Consider
6. Invest Outside of Retirement
While retirement accounts are crucial, investing outside of retirement can diversify your portfolio and help you achieve goals that may be five or 10 or more years away, such as a downpayment on a vacation home or a child’s wedding.
Though investing carries risk and can be volatile in the short term (which is why you generally don’t want to invest funds you’ll need in the next few years), an investment account has the potential to grow more than other types of accounts over the long term. Consider taxable investment accounts that align with your risk tolerance and financial objectives.
7. Meet with a Financial Professional
Getting expert advice on managing your finances can be invaluable at this stage of life. Whether you opt for regular meetings or simply go for a one-time consultation, a financial professional can provide valuable insights and help you navigate complex financial decisions.
An advisor will typically look at your whole financial picture and assist you with creating a comprehensive financial plan. This may include optimizing your investment strategy and ensuring you’re on track to meet your goals, including retirement, investments, and college savings.
The Takeaway
It’s never too late to take control of your finances. In your 40s, you are likely entering your prime earning years, so it’s a good time to focus on paying down debt, preparing for the next chapter of your children’s lives, and saving and investing for your future retirement. With some wise money moves, you’ll be set to make the most of this decade and beyond.
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FAQ
What financial goals should a 40-year-old have?
Ideally, a 40-year-old will want to focus on several financial goals. These include:
• Establish or maintain an emergency fund with three to six months’ worth of essential living expenses.
• Reduce financial burdens by paying off high-interest debt.
• Ensure you’re on track with retirement savings by maximizing contributions to retirement accounts.
• Start or continue saving for children’s college expenses through plans like 529s.
• Consider investing outside of retirement to diversify your portfolio and build wealth.
How much should a 40-year-old have saved?
By age 40, financial advisors often recommend having three times your annual salary saved for retirement. This benchmark ensures you’re on track to meet long-term financial goals and maintain your desired lifestyle in retirement.
In addition, you’ll want to maintain an emergency fund with three to six months’ worth of living expenses.
Savings outside of emergency and retirement, such as investments in taxable accounts, can further enhance financial security. The exact amount can vary based on individual circumstances, income, lifestyle, and future goals.
How can I build my wealth in my 40s?
To build wealth in your 40s, you’ll want to focus on several strategies:
• Maximize retirement account contributions, taking full advantage of employer matches.
• Pay off high-interest debts to free up resources for savings and investments.
• Establish or maintain an emergency fund to cover unexpected expenses without derailing financial goals.
• Consider additional income streams, such as side businesses or rental properties.
• Diversify investments across stocks, bonds, real estate, and other assets to balance risk and growth potential.
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Several days ago, we were debating whether the presidential debate or the month-end/new-month trading environment was the bigger market mover. The political angle was more popular in the analytical community, but evidence is increasingly suggesting that popularity wasn’t necessarily warranted. Today offered some compelling evidence in the form of absolutely no reaction to a widely circulated newswire that seemed to suggest Biden having second thoughts about remaining in the running. Contrast that to the immediate and obvious reaction to the ISM Services data, which made for the highest Treasury trading volume since PPI and jobless claims data on June 13th. Data will remain in focus when markets return from the holiday break on Friday morning thanks to non-farm payrolls.
ADP Employment
150k vs 160k f’cast, 157k prev
08:39 AM
Flat overnight and stronger in early trading. MBS up 1 tick (0.03). 10yr down 2.6bps at 4.406
01:40 PM
Drifting sideways after strong reaction to weak ISM data. MBS up about a quarter points and 10yr down 8bps at 4.352
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Fair Lending Compliance, HELOC Products; Training and Events; FICO News
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Fair Lending Compliance, HELOC Products; Training and Events; FICO News
By: Rob Chrisman
Tue, Jul 2 2024, 11:36 AM
Cracker Jacks, Quaker Oats, Ferris Wheels, and 1893 Chicago have something in common. World’s Fairs, and World’s Expos, have pretty much gone away due to financial issues. A lot has happened since then, financially, and otherwise. Equifax was founded in 1899. The modern credit card, able to be used at various merchants, was developed in the 1950s, when many of today’s loan officers were entering the business. (Ok, just kidding.) FICO (legal name: Fair Isaac Corporation) began in 1956. FICO’s latest news came out yesterday with Encompass Lending Group and Equity Resources, Inc. being the latest to adopt FICO® Score 10 T. Meanwhile, the Mortgage Bankers Association and others have stated that credit-related price hikes have cost lenders & consumers hundreds of millions of dollars. FICO’s executives are well paid. FICO’s stock, at around $1,500 per share, has a price earnings ratio at around 77 (versus the S&P 500 average of around 25) although the only product with any great revenue growth is mortgage credit scores. (Other lines are flat or mediocre.) Observers suggest that Fair Isaac may only have two choices going forward: keep raising mortgage credit score prices even higher or watch its stock price plunge. Some give it near-monopoly status; American Economic Liberties Project’s Matt Stoller uses the word “cartel” when it comes to Experian, TransUnion, Equifax, and FICO. (Today’s podcast is found here and this week’s is sponsored by Bundle, the attorney-prepared legal documents company that is dedicated to the real estate, mortgage, and title industries. Fuel your operations and execution of documents from deeds to subordinations to assignments, and everything you need for any order, in one bundled price; receive 20 percent off using the code “Chrisman” at checkout. Hear an Interview with FirstClose’s Tedd Smith on a new national consumer survey that explored homeowners’ level of awareness of home equity and how it could be used to pay down higher interest credit card debt.)
Lender and Broker Services, Products, and Software
Spring EQ Wholesale is thrilled to unveil a new and unique product to the second mortgage industry: The FIXLINE product. FIXLINE is a fixed-rate HELOC, giving borrowers the flexibility of a line of credit with the stability of a fixed-rate loan. Register for its webinar taking place today, where their team will explore the ins-and-outs of the new FIXLINE product! Spring EQ is also excited to announce a recent addition to their TPO leadership team, Reno Heine. Reno joins Spring EQ as the SVP of TPO, bringing more than 25 years of mortgage industry experience. The need for home equity solutions is surging among borrowers, so make sure your business is prepared to meet this demand by partnering with the experts in home equity at Spring EQ. Interested in a wholesale partnership? Click here. Second mortgages are Spring EQ’s specialty, so think of them first for all your seconds.
Uncovering Fair Lending Risk to Build a Stronger Fair Lending Program! Preventing and detecting discrimination with an active fair lending compliance management system (Fair Lending CMS) is essential for every financial institution (FIs). FIs don’t just have a moral obligation to prevent and detect discrimination… They also have a legal obligation. Lending practices or programs that negatively impact a protected class can result in fines or enforcement actions, even if the discrimination was unintended. Ncontracts’ latest whitepaper introduces the key components of a fair lending compliance management system, discuss common fair lending mistakes, and highlight essential considerations when conducting a fair lending risk assessment to build or strengthen the institution’s overall fair lending program. Download the free whitepaper to learn more.
Events, Training, and Webinars
A good place for longer term conference planning is to start is here for in-person events in the future.
Today the 2nd at 11am PT, two veteran LOs discuss all things mortgage with Industry Leaders. Mortgage Pros 411 with Audrey Boissonou and Kevin Casey. And I get to join in!
Register now for FAMPChat Summer Series presented by the Central Florida FAMP Chapter beginning July 2nd, register now for all 10 sessions.
On Wednesday, July 10 at 11:00 am, NMMLA will present “The current and future state of Digital Mortgages” with Guest Speaker, Robert Pathman.
Thursday the 11th will be another episode of The Big Picture at 3PM ET… Rich Swerbinsky is interviewing the fabled Kevin Peranio of PRMG!
National MI: Leading a Teamwith Andrew Oxley – July 11th at 2pm ET.
Friday the 12th will see an episode of The Mortgage Collaborative’s Rundown with Melissa Langdale and me covering current events in the mortgage market for 30 minutes starting at noon PT, 3PM ET.
The Ultimate Mortgage Expo returns to New Orleans July 10 – 11. Join OCN in the Hotel Monteleone for a jam-packed event featuring 2 days of sessions and 2 days of exhibition hall opportunity. Also, come earlier on July 10 to enjoy complimentary access to the Mortgage Star Conference for women. Enjoy free access to this can’t-miss event using the code OCNFREE.*
Join Servbank’s cohosted webinar with the Mortgage Bankers Association on July 11 at 1-2p ET to learn how handling thousands of service transfers has gotten Servbank’s transfer plan down to a science. With a battle-tested plan and a laser-focus on customer experience, the painless service transfer is a reality. Register for the webinar today! The webinar is free for non-members by creating an account and entering the campaign code “SERVBANK100” at checkout.
On June 20, federal regulators published new quality control standards for automated valuation models (AVMs). The standards focus especially on safeguarding the credibility and integrity of AVMs to support fair lending practices and non-discrimination in real estate property valuations. Attend a complimentary webinar hosted by ICE for an insightful panel discussion with leading valuation experts. The webinar, “New quality standards for AVMs – are you ready?” will take place Tuesday, July 16, from 2 – 3 p.m. ET. Save your seat today.
Join ACES EVP, Nick Volpe and ACES President, Phill McCall on July 17, 11:00 AM – 11:45 AM PDT for a QC NOW webinar as they take a deeper dive into these analytics and how it aligns with the current state of the industry and how to best navigate through the volatile financial landscape.
Join NAMB and Freddie Mac on Wednesday, July 17, from 2pm – 3:30pm ET for Self Employed-The Basics, to get started learning about the self-employed borrower. This introductory session is designed to provide you with the information you need to complete your analysis and to enhance your processes for underwriting self-employed borrowers, with a focus on the sole proprietor.
Newrez Correspondent offers a comprehensive training curriculum on Newrez products and processes, to keep your staff informed of the latest developments in products, technology solutions, compliance issues and process improvements. Each of these programs is offered by its training and development staff on a monthly basis and is updated regularly to reflect recent changes in the industry.
National MI upcoming July 2024 webinar sessions. How to Plan and Attack the Week for Loan Officers with Dr. Bruce Lund – July 18th at 1pm ET. Become an Open House Success Partner with Rebecca Lorenz – July 23rd at 1pm ET. Mortgage Industry Updates Impacting the Balance of 2024 and Beyond with Scott Weghorst, July 25th at 2pm ET.
Thursday July 18th will another episode of The Big Picture at 3PM ET… Rich Swerbinsky is interviewing the Stan Middleman from Freedom Mortgage.
Monday, 5 August 9:00 AM – Tuesday, 6 August at 6:00 PM PDT join the California Association of Mortgage Professionals on August 5th -August 6th for its Annual Summer CAMP at Hyatt Regency Newport Beach, 1007 Jamboree Road, Newport Beach, California. Attorney Brian Levy will be the featured speaker!
“Join me and other leaders in the Michigan mortgage industry at the MMLA Annual Lending Conference, August 14 – 16 @ Boyne Mountain Resort. Go to www.mmla.net for all the registration and sponsorship information. I hope to see you there!”
August 19-21 will see the California MBA’s Western Secondary at the Terranea Resort in Southern California. Come say hi!
Whether you’re an appraiser, educator, or you work for an AMC, lender, tech company, or E&O insurance firm, the Valuation Expo 2024 is your premier opportunity to stay up to date with industry advancements and meet the people at the forefront. Don’t miss the chance to learn, network, and prosper. Register for Valuation Expo at Caesars Palace in Las Vegas, August 19th – 21st.
“NAMMBA CONNECT 2024, August 21-23, is calling for speakers who can inspire and empower our diverse community of mortgage professionals. Whether you specialize in innovative technology, leadership strategies, or industry trends, we invite you to join us in shaping the future of the mortgage industry. Submit your proposal through this speaker application form and be a catalyst for meaningful dialogue and growth.”
The MISMO Fall Summit is in Reston, Virginia, August 26-29 for a jam-packed program filled with presentations and strategy sessions focused on some of the most pressing issues in the industry. In-person and virtual attendance options are available. Early bird pricing extends through July 15, but space is limited, so register before it’s too late.
September 4-6 the NY MBA is taking over the Turning Stone Resort Casino in Verona, NY with a slate of top-notch speakers and information.
Register for the New England Mortgage Bankers two-day conference, September 11-13 in Portsmouth NH. Hear from a range of speakers, learn about new technologies and products, join golf and social events.
There’s the upcoming 2024 Pacific Northwest Mortgage Leaders Conference is Sunday, September 22 – Tuesday, September 24 at the Seattle Grand Sheraton. As the industry continues to evolve through technology, innovation, and adaptation, the conference will present an impressive lineup of local and national industry leaders who will share insights on critical topics impacting the mortgage industry.
“Loan Vision is excited to announce that registration is now OPEN for its 2024 Loan Vision Innovation Conference (previously the Loan Vision User Conference). With a focus on innovation, growth, and doing more with less, our new and improved annual conference is taking place in Chicago, Illinois from Monday, September 23rd – Wednesday the 25th. This conference will deliver highly recognized names in mortgage banking as our speakers, enhanced social networking events, and a fresh agenda for both executives and users and will be aimed at redefining industry standards and setting a new benchmark for excellence. If you’re interested in sponsoring this event, please contact Haleigh Heilman. To learn more about this conference, register, and book your hotel, please visit here.”
Registration has opened for the reverse mortgage industry’s biggest event of 2024, NRMLA’s Annual Meeting & Expo, September 24 from 1PM through September 26 at 12:00 pm, at the Hard Rock Hotel San Diego.
MBAC’s 68th Annual Convention is October 6-8 at the Embassy Suites in Myrtle Beach, SC. It is always worthwhile!
Capital Markets
Bond yields (read: mortgage rates) rose to the highest levels since late May yesterday to begin this holiday-shortened week that will likely be marked by low trading volumes. The jump in yields occurred a day after the first round of voting in France’s parliamentary elections suggested that the National Rally far-right party scored a smaller win than some polls had expected.
At home, President Biden’s widely derided performance in last week’s debate has put increased pressure (read: downward prices) on Treasuries, as a potential President Trump win is bringing anxiety into markets for a variety of reasons having to do with fiscal policy, tariff policy, and immigration policy. There is also mainstream media chatter that a Trump administration in 2025-2028 will be more inflammatory for rising budget deficits than a Biden administration.
In terms of cold hard data (read: not media speculation), the June ISM Manufacturing Index suggested there was a faster pace of contraction in the manufacturing sector last month than in May, signaling subdued activity for the manufacturing sector that fits with the narrative of a slowing economy. This was the third straight month, and 19th out of 20, that economic activity in the manufacturing sector contracted.
Total construction spending decreased 0.1 percent month-over-month in May, as expected, following an upwardly revised 0.3 percent increase (from -0.1 percent) in April. Total private construction was down 0.3 percent month-over-month while total public construction was up 0.5 percent month-over-month. On a year-over-year basis, total construction spending was up 6.4 percent. The restrictive effects of tight monetary policy are becoming increasingly apparent across the construction industry, despite the construction market having navigated the higher interest rate environment relatively well, thus far.
Keep in mind that the big data point this week is the June jobs report on Friday, which is expected to show the unemployment rate rising to the highest level since late 2021, despite a decent monthly gain in payroll employment. Payrolls are expected to come in +190k from the previous release’s +272k pace. More people are returning to the workforce, and there is slower job-finding among newly laid-off workers. Initial and continued claims have trended upward over the last few weeks, with initial claims trending at the highest level since last September and continued claims at the highest since December 2021.
Today’s economic calendar has little: Redbook same store sales for the week ending June 29, Fed Chair Powell’s participation in a panel discussion at the ECB Forum on Central Banking in Portugal, JOLTS job openings for June will be released, and Treasury will conduct several short-duration Treasury auctions. The May Job Openings and Labor Turnover Survey (JOLTS) is expected to show another step down in job openings and a cool rate of hiring across nonfarm industries. We begin the day with Agency MBS prices a few ticks better than Monday afternoon, the 10-year yielding 4.45 after closing yesterday at 4.48 percent, and the 2-year at 4.76.
Employment
“First Horizon Announces Mortgage Warehouse Lending Group leadership transition!
After joining First Tennessee in 1998, Bob Garrett, Executive Vice President of First Horizon’s Mortgage Warehouse Lending Group (MWL) is retiring. At a time when the company had a small footprint and little name recognition outside of Tennessee, Bob and his team were pioneers in the development of our national brand. Today MWL operates as one of the largest and best warehouse lenders in the nation and has funded over $1 trillion in mortgage loans under Bob’s leadership. Scott Walker, MWL Director of Business Development, will assume leadership of the business as Co-Director immediately and report to David Popwell. Bob will continue to assist Scott until his departure December 31, ensuring a smooth transition. Scott joined MWL in 2004 as a Relationship Manager and has since held several management roles. After joining the company, he quickly emerged as a significant contributor and well-regarded leader. “Bob’s legacy of excellence will not be forgotten as it serves as a building block for continued success,” said David Popwell, President of Specialty Banking. “We are fortunate to have Scott step into this role, a proven leader with the depth of experience and commitment to the company needed to continue to excel in this space. We wish Bob all the best in his retirement.”
Patrice Ficklin, who has led the Consumer Financial Protection Bureau’s fair lending office since 2011, is leaving the CFPB to rejoin Fannie Mae. She’s an expert in bureaucracy: Ficklin has been the CFPB’s only fair lending director through seven acting and permanent directors, setting up the agency’s Office of Fair Lending & Equal Opportunity, responsible for the oversight and enforcement of fair lending laws. She has helped coordinate efforts with the Department of Justice to rein in redlining and introduced new rules and guidelines aimed at curbing the impacts of racial bias on home valuations. Kate Berry with American Banker reminds us that, “Ficklin previously served as Fannie Mae’s associate general counsel for nearly a dozen years.” She is rejoining Fannie as its new fair lending officer.
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A standby letter of credit (also known as an SLOC or SBLC) is a legal document, typically used in international trade, that acts as a safety net for a deal. It communicates that a bank will guarantee payment if, for example, their customer fails to send funds to a seller for goods or services provided.
Generally, SOLCs are important when the buyer and seller haven’t been acquainted and haven’t yet established a sense of trust. These documents can help a seller secure a contract with a new client. This is especially helpful when they are competing with larger, more established sellers.
What Is a Standby Letter of Credit?
An SLOC (or SBLC; the terms are used interchangeably) is an irrevocable commitment by an issuing bank that it will make payment to a designated beneficiary if the bank’s client defaults on a deal. To phrase it a bit differently, these commitments ensure the payment of a specific amount if one party does not make good on a business agreement. For example, a seller might ship goods to a buyer, but the buyer fails to pay within a specified number of days. In such cases, the bank will intervene and compensate the seller if certain conditions are met.
However, the conditions can be very specific, and failure to meet them can result in the seller not being compensated. For example, issues with shipping or with the product itself could result in denial of payment.
These letters of credit are common in international trade when buyers and sellers aren’t familiar with one another. When entities from two different countries do a deal, the laws and regulations involved may differ. This can add a layer of uncertainty to whether the deal will go through smoothly. An SLOC can help the seller feel more confident they will be paid.
An SBLC acts as a safety net or insurance policy for the seller. If all goes well with the transaction, they won’t have to make use of it. Only if there are issues with the sale will the SBLC be needed, but that bank guarantee adds a level of confidence.
💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.
How a Standby Letter of Credit Works
Now that you know the meaning of SBLC, here’s how it actually functions.
• When a buyer and seller are entering into a large contract, an SLOC might be created, especially if the buyer and seller don’t know one another. The buyer might create one to help secure a contract or the seller might ask the buyer to obtain a letter.
• In either case, the buyer goes to a bank and requests an SLOC.
• The bank will then perform underwriting to verify the buyer’s creditworthiness.
• The bank might also ask the buyer for collateral if they have bad credit (this is an example of why bad credit is a big deal). The amount of collateral will depend on a variety of factors, including the level of risk, the size of the deal, and the strength of the business.
• Once the process is complete, the buyer receives the SLOC.
• The bank will charge a fee, typically between 1% and 10% of value per year while the contract is in effect.
• Once the transaction project is complete, the SBLC is no longer valid, and the bank will no longer charge a fee.
However, if the buyer defaults on the agreement for any reason, the seller must provide all documentation listed in the SBLC to the buyer’s bank, informing them that the buyer has not held up their end of the arrangement. The bank will then reimburse the seller and later collect payment from the buyer, plus interest.
A deal can fail to be completed for many reasons, such as bankruptcy, lack of cash flow, or dishonesty on the part of the buyer. If the bank determines the buyer has violated the terms of the SLOC, it will then make payment to the seller.
Recommended: Why Are My Credit Scores Different?
Types of Standby Letters of Credit
There are two types of standby letters of credit: financial SBLCs and performance SBLCs.
Financial SBLC
A financial SBLC guarantees payment for goods or services provided. The SBLC guarantees that the buyer’s bank will pay the seller if the buyer doesn’t pay within the timeframe outlined in the letter. If the bank does need to step in and make payment, it will later collect payment from the buyer, plus interest.
Performance SBLC
A performance SBLC is less common but usually guarantees the completion of a project. In this case, a person or company agrees to complete a project within a specified timeframe. Thus, a performance SBLC would reimburse the party paying for the project if it isn’t completed in time or if the client otherwise feels the project was not completed to satisfaction.
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Standby Letter of Credit Example
The most common use of SBLCs is to guarantee payment when a seller ships goods, typically internationally, to a buyer.
• For instance, a buyer might secure a contract to purchase a large shipment of corn from overseas. The seller, never having done business with the buyer before, might ask the purchaser to obtain an SBLC to ensure they are paid for the shipment. Even if the purchaser has taken steps to build credit, this is a new relationship between the two businesses, and trust hasn’t yet been established.
• The SBLC indicates that the buyer will remit payment within 30 days of receiving the shipment. Thanks to shipment tracking, the seller can see that the buyer has received the shipment of corn. However, 30 days have passed, and the buyer hasn’t paid.
• The seller can then go to the buyer’s bank, which issued to SBLC, and provide the necessary documentation about this deal and lack of payment.
• If the bank agrees that the buyer hasn’t held up their end of the agreement, the bank will then pay the seller for the corn. The bank would then collect payment and additional charges from the buyer.
Recommended: Do Personal Loans Affect Your Credit Score?
Advantages of a Standby Letter of Credit
SLOCs have a few advantages worth noting:
• Guarantee of payment The main benefit of SLOCs is they guarantee payment for the seller. Even if the buyer can’t pay, the seller can ask the buyer’s bank to reimburse them.
• Helps buyers land contracts A seller might hesitate to ship goods to a buyer they don’t know and trust, even if credit monitoring reveals they seem like a good bet. There’s still an element of risk. The SLOC can make a seller more confident about doing a deal since they will be more likely to get paid.
Disadvantages of a Standby Letter of Credit
There are disadvantages to SLOCs, too. These include:
• Increased costs The bank that guarantees the SLOC will charge the buyer a fee for every year the contract is in effect. And if the bank has to pay the seller, they will charge the buyer principal plus interest.
• Not always a guarantee Although SLOCs guarantee sellers will be paid, there can be many hurdles involved before payment is issued. For example, shipping delays or problems with the product itself can lead to denial of reimbursement.
How to Obtain a Standby Letter of Credit
Obtaining a standby letter of credit is generally the responsibility of the buyer. Their bank will reimburse the seller in the event they don’t pay promptly. The bank will also have to determine how creditworthy the client is and decide if collateral is required. (One of the benefits of good credit can be not having to put up collateral in situations like this one.)
To issue the letter, the buyer might work with either a domestic or international trade division of a bank, depending on the deal’s particulars. At this point, it’s also wise for the buyer to have an attorney on site to review the terms of the agreement.
A seller can ask that the buyer obtain an SLOC as part of the contract. All parties should have legal experts involved to ensure the accuracy and conditions of the agreement.
Recommended: Do Credit Scores Update Often?
The Takeaway
Standby letters of credit (SLOCs) are useful legal documents for both buyers and sellers doing business, especially if they are working on an international deal. These letters can act as a safety net, saying that if a buyer doesn’t complete a deal, their bank will step in and make payment. For sellers, these letters can help increase confidence that they will be paid for goods or services. For buyers, they can be helpful in securing new contracts.
Not all banking involves international business deals, however. If you are looking for a reliable bank for your daily personal finance needs, see what SoFi offers.
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FAQ
What does standby mean in letter of credit?
A letter of credit is a legal document that provides a safety net for a financial deal. “Standby” in this context refers to the fact that these letters are only implemented (and funds then issued) by the bank if the buyer fails to pay. If the buyer pays within the expected timeframe, no action is taken. The letter of credit has stayed on standby status.
What is the difference between a letter of credit and a standby letter of credit?
The difference between a letter of credit and a standby letter of credit is what each of them promises. A letter of credit is a guarantee from a bank that the buyer will pay. On the other hand, a standby letter of credit is a guarantee from the bank that they will pay if the buyer fails to do so.
Can SBLC be used as collateral?
The SBLC itself is not usually considered collateral. However, a bank may require the buyer to provide collateral before issuing an SBLC if the bank feels the buyer’s creditworthiness is not up to par.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
It’s now possible to activate all 5% category credit cards for the third quarter of 2024, including the Chase Freedom, Chase Freedom Flex, Discover IT, Citi Dividend, US Bank Cash+ and some smaller cards. In this post we’ll provide the activation link for each card and links to track your spend, along with strategies to help increase spend in these categories.
Dates: July 1st – September 30, 2024. Store purchases can usually be done until the last minute while online purchases should be given a buffer zone since the charge typically posts on the shipping date.
Chase Freedom – Gas, EV, Entertainment
Activation Link / FAQ / Sample Stores & Exclusions / Our original post
With the Chase Freedom and Freedom Flex cards, activate to earn 5% back this quarter on up to $1,500 in spend at gas stations, on EV charging, select live entertainment and movie theaters.
Gas and EV charging – Useful for gas and also for buying gift cards inside some gas stations and similar convenience stores
Select live entertainment and movie theaters
Tip: Click this link (login required) to check how far you are along the $1,500.
Discover – Grocery, Walmart
Activation Link / Our original post
With your Discover card, activate to earn 5% back this quarter on up to $1,500 in purchases at Grocery Stores and at Walmart.
Grocery Stores – always a useful category. Grocery stores also sell a wide variety of gift cards to other retailers.
Walmart – Walmart store purchases, online purchases, and gas purchases are included. You can buy a Walmart gift card online or in-store and then use that for Sam’s Club purchases as well. Walmart sells third party gift cards too.
Activate to earn 5% Cashback Bonus at Grocery Stores and Walmart from 7/1/24 (or the date on which you activate 5%, whichever is later) through 9/30/24, on up to $1,500 in purchases. Grocery Store purchases include those made at supermarkets, meat lockers, bakeries, smaller grocery stores, and grocery delivery services. All purchases made from Target, convenience stores, wholesale clubs, and discount stores are not eligible. Walmart purchases include those made at Walmart.com, through the Walmart app, in-store at Walmart Discount Stores, Walmart Supercenter Stores, Walmart Neighborhood Market Stores, Curbside Pickup, Walmart +, and Walmart Gas Stations. Purchases using Walmart Pay with your Discover Card will also be included. Purchases from individual merchants and stand-alone stores within physical Walmart locations may not be eligible for this promotion. Sam’s Club purchases are not eligible. Purchases made through affiliates of Walmart.com are not a part of this promotion. The Walmart.com logo is a registered trademark of Walmart Inc. Listed merchants are in no way sponsoring or affiliated with this program.
Tip: Login, then click this link to see you how far along the $1,500 you are.
Citi Dividend – Gas
Landing Page | Our Original Post
With your Dividend card, activate to earn 5% back this quarter at Gas Stations. Citi is different than the other cards in that you have a $6,000 annual cap rather than a $1,500 quarterly cap. You can get 5% back on up to $6,000 in this quarter or you can save the entire amount for a different quarter, or you can use part up each quarter.
Excludes gasoline purchases at warehouse clubs, discount stores, convenience stores or other merchants that do not use the gas station merchant category code.
U.S. Bank Cash+/Elan – Select your Categories
Activation link | Merchant List | Our Original Post
U.S. Bank Cash+ and Elan Max offer 5% cash back in two categories, up to $2,000 combined total per quarter. Keep in mind that Car Rentals was recently replaced with TV, Internet, and Streaming Services.
Here are the current options:
TV, Internet, and Streaming Services
Home utilities
Select clothing stores
Cell phone providers
Electronic Stores
Gyms/Fitness
Fast food
Ground Transportation
Sporting goods
Department Stores
Furniture Stores
Movie theaters
Tip: Login here, then scroll down and click on the red “View Your Cash+ History” button.
U.S. Bank Shopper – Select your Categories
Our Original Post
The U.S. Bank Shopper Cash Rewards comes with a $95 annual fee and offers 6% cashback on your first $1,500 in combined eligible purchases each quarter with two retailers you choose. Options include Amazon, Apple, Best Buy, Home Depot, Lowe’s, Walmart, Target, and many more. You must enroll each quarter into two retailers.
Bank of America Customized Cash Rewards
Our Original Post
The Cash Rewards card from Bank of America offers 3% back on one selected category, up to $2,500 per quarter. If you don’t select anything it defaults to gas. Once you selected a category for one quarter, that remains your category in the future unless you change it. Each calendar month you can change it if you’d like, but you’re always limited to $2,500 for the entire quarter.
Gas and EV charging stations (default category)
Online Shopping; this category also includes cable, streaming, internet, and phone plan
Dining
Travel
Drug Stores
Home Improvement/Furnishings
This category is especially lucrative for those who have Preferred Rewards status with Bank of America which can get you 5.25% back on one of these categories at the higher relationship level.
Lots of useful categories here. Important note: the Cash Rewards card also offers 2% back at grocery stores and wholesale clubs up to $2,500 per quarter, and that $2,500 limit combines with the Category Selection limit. After spending $2,500, you’ll earn 1% back on everything.
Other Cards with 5% Category
Nusenda FCU – Gas, Hotels, Airfare, Education
Landing Page | Our Original Post
Earn 5% this quarter on up to $1,500 in purchases on Gas, Hotels, Airfare, and Education.
This is on top of the regular 1% for a total earn of 6% back. (apparently no longer the case?)
Langley FCU – Walmart, Wholesale, Gas, EV
Landing Page | Our Original Post
Langley Federal Credit Union offers 5% back each month in one selected category, on up to $100 cash back total ($2,000 spend).
The category options at time of this writing: Walmart, Wholesale, Gas, EV.
Vantage West [AZ] – Select your Category
Landing Page | Our Original Post
Get 5x points on the category of your choice, up to $1,500 per quarter. Eligible categories:
Safe Credit Union Cash Rewards Visa card offers 5% this quarter on your choice of one category each quarter (with no apparent limit). This quarter the categories are:
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.
Budgeting is such an adulting term.
Nothing can make you feel more like an adult when you need to learn how to budget your money, stop buying frivolous things, and save for retirement.
A budget just sounds like no fun.
Is it possible to learn how to budget money and still enjoy life?
However, the bright side to budgeting (and normally overlooked aspect) is by setting up a budget is you start to live within your means and start your path to financial freedom. Here are all the advantages of budgeting.
Personally, financial freedom is way more enticing!
So, that means a budget is necessary. A budget is key. A budget will change your life forever.
Just FYI…Here at Money Bliss, we like to call it a Cents Plan. Why? A budget sounds constricting. Take your money cents and put it with your head sense to make your Cents Plan.
We will detail what is the proper way to budget for money.
But the question remains how to budget money without pulling out your hair and still enjoy life. (It is easier than you think!)
Do you Need a Budget?
First, let’s answer this age-old debate. Do you really need a budget?
The simple answer is it depends on what you want out of life.
Do you want to live paycheck to paycheck, struggling with money, straddled with debt? Or with financial independence where you control your destiny?
Stress vs. joy. The choice is yours.
With human nature, our tendency is to spend money. While there are some savers in the room, it is typically a learned trait. Society wants quick results and with material items so cheap, it is easy to go overbudget.
Does extra income really solve someone’s money problems?
Last I checked, there are plenty of people who made millions are in bankruptcy because of overspending, not living within their means, and a budget wasn’t a term they used.
Here is a quick test…
If you have read this far into the post, then you need a budget. Keep reading. We have plenty of information to help you succeed. Also, you will learn various ways to budgeting that work for you.
Longer Answer & Must Read: Money Bliss Steps to Financial Freedom – this is the long term answer to “Do You Need a Budget?”
Purpose of a Budget
Okay, so we figured out that you need a budget. But, you aren’t truly convinced about why you need a budget.
What is the reason or main purpose of a budget?
The purpose of a budget is to first decide where you plan to spend/save money and then, see if you followed through on your plan.
Are you under budget? Are you over budget? Specifically, are you making progress to your life’s vision?
That is the role of a budget.
It is a guide for your money. Like we have said many times before you can manage your money or have your money manage you.
Personally, we use a budget to reach financial freedom faster and to make sure we have money set aside to travel. We have chosen to live a little more frugal than our neighbors (some might say much more frugal). However, the trade off for us is to travel now. Not wait until “retirement.”
For us, the purpose of a budget helps us to travel each year plus work our way towards financial freedom.
For you, what is the purpose of a budget? What do you want out of life?
Use on of these methods of budgeting as a guide to develop your budget.
Importance of Budgeting
There are many benefits of budgeting. However, most people struggle with a budget because saying no to yourself can be hard.
Let’s look at the bigger picture.
Do you want to manage your money? Or have your money manage you?
The choice is yours.
A budget is just a spending plan written out in advance.
You manage money your way!
That is a huge importance of budgeting. Personally, I would much rather decide how I want to spend my money. That is one of the biggest reasons we decided to pay off our debt in one year.
The importance of budgeting is to make sure you are living within your means and have the ability to pay for your expenses.
A budget doesn’t have to be complicated. It helps you lower big ticket expenses like housing, food, and transportation and then make sure you have enough remaining for the rest of your expenses.
If debt is a part of your life, then you are able to pay off debt faster by knowing where you spend money (and specifically what is worth spending money on). If you are debt-free, then you can continue paying in cash rather than racking up debt.
By moving towards a budget, then the foundation is laid to build a solid money journey.
You know where and how your money is spent. Then, you’re not left at the end of the month wondering if and when you will run out of money.
Another key importance of budgeting is it forces you to be organized with your finances. Then, you know where your money is going.
Creating a budget shouldn’t be overcomplicated or hard. That is something we will teach you how to do.
Benefits of Budgeting
Too many times people have good intentions of creating a budget and give up too quickly, then they never finally understand the benefits of budgeting.
It will take a few months or paycheck cycles to truly notice the benefits of budgeting (AKA spending less than you make).
You need to learn how to budget money and get into the groove of it.
No matter what we do…we can’t change how fast the days move. This is hard when you are working hard on your budget for the first time and want to see progress faster.
Consistency makes budgeting actually work.
A few of the benefits of budgeting include:
Stop fighting about money
Ability to reach your goals faster
Prioritize spending
Did you realize we only listed a few of the benefits of budgeting? Learn all nine Surprising Advantages of Budgeting your Money. (#7 may save your marriage)
As paychecks roll in and the months go by, you start seeing the bigger and bigger picture on the benefits of budgeting.
How to Manage Money
Now, that you read you need a budget, the purpose of a budget, the importance of budgeting plus the true benefits of budgeting, let’s learn how to manage money.
Specifically, how to manage your money.
Remember you have the choice to manage your money or have your money manage you. The choice is yours.
So, how can you manage your money?
One place to start is look at what others are doing. What makes them successful or not successful.
You can manage your money based off percentages like the Cents Plan Formula.
You can look at the household budget percentages to see how people spend money according to the statistics.
Ask a friend or family member how they manage money. (Some may tell you others won’t say a word.)
You can also go in depth with My Ultimate Money Blueprint.
Just remember, in the end, you want to manage money your way.
Steps on How to Budget Money
Managing money is more than just a budget.
It is about giving you choices in life.
These steps on learning how to budget money are very global. They aren’t specific tactics for budgeting. You can learn that in the 7 steps to making a budget.
These is the overarching themes that guide you on how to budget your money. Let’s budget your life and change your finances.
1. Life’s Vision
Before we starting truly budgeting, we just tracked our spending. Without fail each and every month, there wasn’t money leftover to do what we wanted in life. Things just didn’t seem fair.
Then, I got this hair-brained idea to pay off all of our debt in 1 year.
Let me tell you…it was the best decision we ever made. You can read about our journey to be debt free.
By paying off our debt, we decided to put us first and what we wanted in life.
Extra money was going towards all of debt each month. So, that meant everything else was hacked to make paying off debt possible.
During that time, we truly understood what we wanted in life, what was important to us, and how we would get there. I guess you could say we began to budget our life.
Do you know what your life vision is? Your why? Your next money goal?
If not, then start here on making money goals.
2. Live Within Your Means
While this seems blatantly obvious, it is one of the hardest things for people to do.
Simply put…
Income > Spending
Your income is greater than your spending (and hopefully savings is included in that number too).
One of the fastest ways to start living within your means is with a no spend challenge.
Plus it will help you uncover your life’s visions and what truly matters to you.
If you have been spending more than you make, then you are letting money manage you.
By living within your means, then you are managing your money your way.
Learn Exactly… How to Live Below Your Means and Love Life
3. Be Okay Being Different
The comparison trap is real.
With social media, it is hard to escape any type of comparison game. It used to be “Keep up with the Joneses’” and that just meant the neighbors and friends around you. Now, it is comparing yourself to influencers and people you will never meet in your lifetime.
The key to long term success on how to manage money is doing it your way, which means that your priorities will be different than everyone around you. And you have to be okay with being different.
Need ideas to stay on budget? Find 101 Fun Things To Do With No Money.
Need the motivation to live in a minimalist home? Could You Live In a Minimalist Home? (Real Life Minimalists) Hint: We were featured because while less is more.
4. Find a System to Work for You
The recommendation I always make when starting out with a budget is to use paper and pencil. Something tangible that you can touch and feel. Then, it becomes a constant reminder of your new ways of managing money.
Over the long-term with budgeting, you must find a system to work for you. Maybe an app? Maybe a spreadsheet? Possibly a software?
The key is finding a system that will work for you. And if you combine finances, it has to work for both of you.
This is where most people fail.
There are so many options for free and paid budgeting apps today. It may seem overwhelming. But, you can’t go back to other habits.
Today, we use Quicken and a personalized spreadsheet. Thankfully, Quicken does all of the hard work of downloading transactions, categorizing them, and creating reports.
5. Celebrate Successes
This is something that doesn’t happen as much as it should with money goals. Too many times, we are so focused on saving money and living frugally, we forget to live and enjoy life.
You need to stop and smell the roses.
In this case, you need to celebrate your wins along your journey.
Here at Money Bliss, we like to focus on…
Life. Money. Enjoy.
Life is first. You need to enjoy your life and figure out how money relates to your life. You need to budget your life.
Don’t be afraid to celebrate your success. And if you don’t believe us…One of the steps in the Money Bliss Steps to Financial Freedom is about celebrating success and doing something for you.
How to Set up a Budget
Setting up a budget shouldn’t be hard or complicated.
Don’t overanalyze. Don’t give up.
Most people have to work on setting a budget that works for them over a couple of months. Each month making small refinements.
The end goal is to set a budget that works for you.
A High-Level View of Budgeting:
Determine what your money goals are
Figure out your income
Track how much you are spending
Set up a Budget or Spending Plan
Track your progress
Yes, this is a very high-level view of setting up a budget. At this point, you don’t have to divide up into budgeting categories if you don’t want to.
There are plenty of resources on our site to help you finalize a budget that works for you.
Find detailed resources on how to make a budget.
The key to setting up a budget is be realistic.
You want to set yourself up for success – not instant failure.
One of the key ingredients to make you a success is pocket money. Personally, I believe this one category can make or break your budget. Understand how pocket money (AKA slush money) works.
When setting up a budget for the first time, set aside time to work through the budgeting process. A solid budget that will work (remember that is a key ingredient for success) needs to be based on your life’s visions. Not just slapped together in 5 minutes.
Learn How to Budget Money
Learning how to budget money is completely doable.
Budgeting shouldn’t be cumbersome or overwhelming. In the long run, the benefits of budgeting outweigh living paycheck to paycheck or stressed about money.
A budget makes sure your expenses (and savings) are below your income. From there you can decide how detailed you want to get with your budget.
The purpose of a budget is to help you successfully reach your life’s visions. The point where you start managing your money and not being managed by your money.
Further resources on budgeting:
Make sure to download our free budget printables!
From all of the free and paid budgeting apps, here are our top budgeting apps to check out!
This section may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. Please read the full disclosure below.
Empower Personal Wealth, LLC (“EPW”) compensates Money Bliss for new leads. Money Bliss is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC.
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HoneyMoney increases your awareness about your money habits. Being fully aware of your money naturally changes how you spend it.
Great way to use cash flow budgeting. Plus uses “envelopes” to budget.
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Safe deposit boxes are storage units located in banks that offer a secure way to store important items you may not want to keep at home, such as critical documents, collectibles, and family heirlooms.
Due to the growth of online banking and digital storage, safe deposit boxes aren’t as popular as they once were. However, there are some situations where these boxes can be useful. Here are key things to know about safe deposit boxes.
What Is a Safe Deposit Box?
A safe deposit box (also called a safety deposit box) is a secure locked box, usually made of metal, that stays in the safe or vault of a federally insured bank or credit union. They are typically used to keep valuables, important documents, and sentimental keepsakes protected from theft or damage.
Safe deposit boxes often come in two different sizes, usually 3” by 5” or 10” by 10,” and can be rented for an annual fee. In exchange for the fee, banks provide security measures to protect your valuables, such as alarms and surveillance cameras. In addition, the safe deposit boxes are stored in vaults that are designed to withstand natural disasters such as fires, floods, hurricanes, and tornadoes.
Unlike a bank account, however, the contents of a safe deposit box are not protected by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA). As a result, there is still a small risk that you could lose the items in your container due to theft or damage.
Recommended: What Are the Differences Between FDIC and NCUA Insurance?
What You Should and Shouldn’t Keep in a Safe Deposit Box
Safe deposit boxes can be a good place to keep hard-to-replace documents and small valuables that you won’t need to access frequently. However, you generally don’t want to keep any items that you may need to grab in a hurry in the box, and certain items are prohibited.
Here’s a breakdown of things to keep — and not to keep — in a safe deposit box.
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Items Typically Kept in a Safe Deposit Box
• Important documents: Documents that are difficult to replace and often needed for legal purposes are commonly stored in safe deposit boxes. These include: birth certificates, marriage licenses, car titles, divorce records, citizenship papers, property deeds, and mortgage documents.
• Valuables: Jewelry, rare coins, stamps, and other valuable collectibles can be safely stored away from potential theft.
• Financial Instruments: Stock certificates, bonds, and other financial instruments that require safekeeping can be securely stored in a safe deposit box.
• Backup data: You might store external hard drives or USB drives containing sensitive personal or business information here to protect against data loss.
• Personal keepsakes: Irreplaceable items like family heirlooms, photos, and memorabilia can be stored to ensure they don’t get lost or damaged.
Items to Avoid Putting in a Safe Deposit Box
• Cash: While you may be tempted to store some cash in your safe deposit box, you’re likely better off putting the money in a high-yield savings account at a bank or credit union, which will allow your money to grow. The cash will also be insured (up to certain limits) by the FDIC or NCUA.
• Original copies of wills: Original wills should not be stored in a safe deposit box because they may be difficult to access immediately after the owner’s death, delaying probate. You might instead store a copy of a will.
• Durable power of attorney: Similar to wills, these documents might be needed quickly in emergencies, and delays could cause significant issues. Consider storing a copy.
• Passport: If you need to travel urgently, accessing your passport from a bank vault could be problematic due to limited bank hours.
• Frequently used items: Any items you need regular access to should not be kept in a safe deposit box due to limited accessibility.
• Prohibited items: Banks and credit unions generally prohibit the storage of firearms, explosives, weapons, hazardous materials, illegal substances (such as drugs), alcohol, perishable items, and cremated remains.
How Much Does a Safe Deposit Box Cost?
Rental fees vary by the box’s size and financial institution. The average cost to rent a box at a commercial U.S. bank runs between $15 and $350 per year. Additional costs may include fees for lost keys or late payments.
Some banks and credit unions will offer discounts on a safe deposit box cost if you have a relationship with the bank. In some cases, an institution may offer free access to a safe deposit box as a perk to their customers.
How to Get a Safe Deposit Box
To rent a safe deposit box, you’ll generally need to follow these steps:
1. Research your options. Not all banks and credit unions offer safe deposit boxes. You’ll want to find an institution that both provides this service and is conveniently located.
2. Meet the requirements. Many banks require you to be an existing customer with a checking or savings account. However, some banks may allow noncustomers to rent boxes for an additional fee.
3. Provide identification. You’ll need to bring valid identification, such as a driver’s license or passport, to verify your identity. If you plan to allow another person access to your safe deposit box, they will need to be present and show ID as well.
4. Sign a rental agreement. You (and, if applicable, your corenter) will need to sign a rental agreement outlining the terms and conditions of the box rental.
5. Make a payment. You generally need to pay the initial rental fee upfront. Some banks may offer discounts for long-term rentals or automatic payments.
6. Get your key. Upon completing the paperwork, you will receive a key to your safe deposit box. The bank retains a second key. Both keys are required to access the box. If the bank offers keyless access, they will likely scan your finger or hand.
Keep in mind that every time you wish to access your safe deposit box, you’ll need to present your photo ID, as well as your key (if it’s not keyless). The bank may also require your signature before allowing you to open your box.
Recommended: How Long Does It Take to Open a Bank Account?
How Safe Is a Safe Deposit Box?
Safe deposit boxes are generally very secure. They are housed in a bank vault, which offers robust protection against theft, fire, flood, and other disasters. Banks employ multiple layers of security, including surveillance cameras, alarms, and restricted access to the vault area.
When you rent a safe deposit box, the bank typically gives you a key to use. The bank also retains a second “guard key” which must be used by a bank employee in tandem with your key. Some banks now use a keyless biometric entry system, where you scan your finger or hand instead.
However, it’s important to note that the contents of a safe deposit box are not insured by the bank or the FDIC. As a result, you may need to obtain separate insurance or add a rider to your homeowners or renters insurance for coverage.
Recommended: Are Online Savings Accounts Safe?
Pros and Cons of Safe Deposit Boxes
Safe deposit boxes can be a good way to protect your valuables. Here are some of the upsides of renting one:
• Security: Safe deposit boxes offer a high level of security, since they are stored in areas with limited access and stepped-up surveillance.
• Environmental protection: They can protect your valuables from environmental damage, such as a flood or fire.
• Privacy: The contents of a safe deposit box are known only to the renter, offering a high degree of privacy.
• Organization: Safe deposit boxes help keep important documents and valuables in one secure location, making it less likely you will misplace them.
But safe deposit boxes also come with downsides. Here are some to consider:
• Limited access: Access is restricted to bank hours, which can be inconvenient, especially in an emergency.
• Cost: There is an ongoing rental fee, which varies based on the size of the box.
• Not insured: Contents are not insured by the bank or FDIC. Separate insurance may be needed for valuable items.
• Delayed access for loved ones: In the event of the renter’s death, accessing the box may require legal processes that could delay access to important documents.
Recommended: Different Types of Savings Accounts You Can Have
The Takeaway
If you’re looking for a safe place to stash vital papers or valuable possessions, you might consider renting a safe deposit back at a brick-and-mortar bank or credit union. Items stored in these containers are protected against theft, loss, or damage due to a flood, fire, or other disaster.
But the protection has limits: Unlike regular bank accounts, safe deposit boxes are not insured by the FDIC. Also keep in mind that safe deposit boxes aren’t ideal for items you may need to grab in a hurry, since access is limited to banking hours.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
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FAQ
What can I use instead of a safe deposit box?
Alternatives to a safe deposit box include:
• A fire-rated personal home safe: This can offer protection from environmental damage (such as fire or flood). However, a thief could potentially steal the whole safe.
• Digital storage solutions: Cloud services can securely store important documents and data backups.
• An attorney’s office: For legal documents, a trusted lawyer’s office may offer secure storage.
• Private vault facility: These are a viable alternative to a safe deposit box but tend to cost more.
Can safe deposit boxes be jointly shared?
Yes. When you open a safe deposit box, you can designate one or more corenters who will have equal access to the box. This is useful for couples, business partners, or family members who need shared access to important documents and valuables. Each renter typically receives a key, and all corenters’ signatures are required on the rental agreement.
Is it safe to keep money in a safe deposit box?
While it is physically safe to keep money in a safe deposit box, it is not recommended. Cash stored in a safe deposit box does not earn interest and is not insured by the Federal Deposit Insurance Corporation (FDIC). You’re generally better off keeping cash in a high-yield savings account or other insured financial instrument that offers safety, liquidity, and interest earnings.
Do banks know what you put in a safety deposit box?
No. The contents of a safe deposit box are private, and bank employees do not have access to the items stored inside. When you rent a safe deposit box, you receive a key, and the bank retains a second key. Both keys are required to open the box, but only you can open it and see its contents. This ensures privacy and confidentiality.
Photo credit: iStock/AlexSecret
SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
Ultimately a Very Drama-Free Day; Back to Watching Data
By:
Matthew Graham
Tue, Jul 2 2024, 5:00 PM
Ultimately a Very Drama-Free Day; Back to Watching Data
Tuesday helped buck the recent trend of frustratingly counterintuitive selling sprees in the bond market. The amount of blame assigned to politics or to the arcane practices dictating monthly positioning in bonds can be debated, but there’s less urgency on that front with today bringing moderate improvement. Fed Chair Powell’s appearance at SINTRA was a non-event, but perhaps in a “no whammies” sort of way. Bonds gradually improved during his time on stage but lost some ground after the JOLTS data (as it should be, considering the higher than expected reading). Buyers held firm, however, and we hit the close with gains intact. To some, that’s proof positive that there’s no glacial repricing of risk following the presidential debate. To others, it’s a suggestion that it didn’t matter as much as it may have seemed. Either way, we have big ticket data to look forward to in the next two business days.
Job Openings (lower = better for rates)
8.14m vs 7.91m f’cast, 7.919m prev
Job “Quits” (lower = better for rates)
3.459m vs 3.452m prev
09:46 AM
Moderately stronger overnight with additional gains in early trading. MBS up more than an eighth. 10yr down 4bps at 4.423
11:00 AM
Some weakness after JOLTS, but improving again now. MBS up 7 ticks (.22) and 10yr down 3.1bps at 4.433
02:53 PM
Modest additional improvement with 10yr down 2.9bps at 4.435 and MBS up 6 ticks (.19)
04:54 PM
Closing at decent levels, right in line with the previous update.
Download our mobile app to get alerts for MBS Commentary and streaming MBS and Treasury prices.
Want to learn how to make quick money in one day? There are plenty of opportunities out there that let you earn some extra cash without a long-term commitment or if you need cash immediately. Whether you prefer working online or doing tasks around your neighborhood, you can find a side hustle that fits your…
Want to learn how to make quick money in one day? There are plenty of opportunities out there that let you earn some extra cash without a long-term commitment or if you need cash immediately.
Whether you prefer working online or doing tasks around your neighborhood, you can find a side hustle that fits your skills and schedule. From driving for a rideshare to selling unused items, making quick money in a day is more achievable than you might think.
I have personally done most of the side hustles below, so I know they are real.
Best Ways To Make Quick Money in One Day
Below are the best ways to make quick money in one day:
1. Flip items for resale
Flipping items for resale is a fast way to make money. You buy things at a low price and sell them for more. And you can even start with stuff you already have at home.
You can sell clothes, old phones, books, unused gift cards, kitchen items, and jewelry.
Many people have lots of items just lying around, so you could easily find things to sell without spending a dime to buy new stock.
Selling your items can be quick too by listing your stuff on sites like eBay, Craigslist, or Facebook Marketplace. These platforms have many buyers looking for good deals.
Recommended reading: How I Made $40,000 In One Year Flipping Items
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This free workshop will teach you how to get into the flipping business. It will teach you how to resell furniture, electronics, appliances, and anything else you can find.
2. Sell your clothes
When I was younger, I worked at a secondhand clothing store for a few years. I know how great these shops are, especially for making extra money.
I have sold a lot of clothes over the years, both online and in person. I even had a small business reselling clothes. So, I know a lot about selling used clothes!
Selling your clothes is a great way to clean out your closet and make some quick cash. You probably have clothes lying around that you don’t wear anymore, maybe because they don’t fit or aren’t your style.
You can begin by gathering items you no longer need. Check that they’re clean and in good condition. Next, decide where you want to sell them.
Local secondhand and consignment shops are an option if you prefer selling in person. These shops buy used clothes and pay you in cash or store credit. It’s quick and straightforward, but remember they might not accept everything. Secondhand and thrift stores like Plato’s Closet will give you cash the same day, so this is a good option if you need money right now.
Selling online gives you a bigger audience and more options. Sites like ThredUp make it easy. Order a Clean Out Kit, fill it with clothes, and send it back. ThredUp handles almost everything.
Another option is Poshmark. This is an app where you can list your clothes, set prices, and sell directly to buyers. You take photos, write descriptions, and ship items after they sell. Poshmark takes a small fee from each sale.
EBay is also popular. You just create listings, set starting bids, and see how much you can earn. Auctions can end quickly, so it’s great for fast sales.
Instagram can also be a fun place to sell if you have a following. You can post pictures of your clothes, add hashtags, and engage with your buyers.
Here are 16 Best Places To Sell Clothes For Cash.
3. Sell old electronics
Selling old electronics can be a great way to make quick money in one day.
You can start by looking around your home for unused gadgets such as old phones, laptops, tablets, or even game consoles.
Your old electronics can be sold on sites like Decluttr, Facebook Marketplace, and Craigslist. Retailers like Apple, Amazon, and Best Buy also have trade-in programs. You can exchange your old devices for gift cards to use at their stores.
If you want quick cash, these methods are fast and convenient. Just gather your old electronics, pick the best place to sell, and you could have extra money in your pocket by the end of the day.
4. Dog walking and pet sitting
Dog walking is a fun and easy way to make money quickly. If you love dogs and enjoy spending time outdoors, this can be a great option for you. There are several dog walking apps that connect dog walkers with pet owners.
One popular app is Rover. It’s easy to sign up and get started. You can set your own rates and choose when you want to work. Many people find Rover helpful because there’s always a demand for dog walking services.
Another popular app is Wag for people looking for a pet sitter.
Dog walking rates can vary. Typically, you can earn between $15 and $30 per hour, depending on the number of dogs and the length of the walk. This can add up quickly, especially if you take multiple jobs in one day.
My mother-in-law as well as my sister are both dog walkers and really enjoy what they do!
5. Complete online surveys
Doing online surveys is a simple way to make quick money in one day. Many companies want your opinion to improve their products or services, and by sharing your thoughts, you can earn cash or gift cards.
Some paid survey sites where you can take surveys include:
Freecash
Prime Opinion
Five Surveys
American Consumer Opinion
Survey Junkie
Swagbucks
InboxDollars
Branded Surveys
Earning money from answering surveys isn’t quick and won’t make you rich. But if you have an hour, it’s an easy way to make a little extra cash.
I have answered a lot of surveys over the years. I liked that I could do them during little breaks in my day, like before and after work, during lunch, or while riding in a car. They are easy to answer and usually only take a few minutes.
6. Freelance work
Freelance jobs are a great way to make fast money. You can use your skills to help others and get paid for it. Plus, lots of people need freelance writers, graphic designers, and web developers.
Here are some ideas:
If you enjoy writing, you can find jobs that need blog posts, articles, or even editing. Websites like Upwork and Fiverr connect you with clients who need these services.
Are you good at art or graphic design? Many businesses look for freelance graphic designers. They need help with logos, social media posts, and website designs.
Web developers can also find plenty of work online. You could help build a website or fix one that’s already running. Code issues can be tricky for many, but if you’re good at it, you can get paid well.
You can also offer services like proofreading, transcription, or even managing social media accounts. These jobs can be done quickly and still earn you money.
Freelancing gives you the freedom to choose what you do and when you work. Since it’s online, you can do it from the comfort of your home. It’s a flexible way to make quick cash on your own schedule.
I have been a freelancer for years, and I think it’s a great way to make more money.
You can learn more at 16 Best Freelance Jobs & How To Get Started.
7. Sell crafts on Etsy
Selling crafts on Etsy is a fun and creative way to make quick money. Many buyers love unique, handmade items that they can’t find anywhere else.
I shop on Etsy all the time (I actually just bought a custom card for someone as well as a specific live plant that I couldn’t find anywhere in person!).
Items like jewelry, handmade soaps, and candles are very popular. These items are easy to make and tend to sell well. Stickers and printables also have a big market and can be a good way to make a passive income stream. You can also make bath products like sugar scrubs and geode bath bombs. People love these items because they are both pretty and useful.
Here are 16 Best Things To Sell On Etsy To Make Money.
8. Rent out a spare room
Renting out a room is a great way to make money fast. If you have a spare room, you can try listing it on sites like Airbnb, Facebook, or Craigslist.
You can rent your room for a night, a week, one month, or even longer. This flexibility allows you to choose what works best for your schedule.
When I was younger, I had extra bedrooms in my house and rented them out to roommates. I rented to long-term renters and people I knew, like friends and my sister. It didn’t cover my whole mortgage, but it covered about half, which I thought was great!
9. Food delivery
Food delivery jobs can help you make quick money in one day. There are many food delivery apps and services that need drivers to deliver meals from restaurants and grocery stores to customers.
One popular option is DoorDash. As a DoorDash driver, you pick up food from local restaurants, deliver it to customers, and you can keep 100% of your tips and cash out daily.
Another good choice is Uber Eats. With Uber Eats, you set your own hours and enjoy the freedom of no boss. You can deliver food in your spare time and get paid fast.
For grocery delivery, there is Instacart. Instacart is a popular website for people who want to make extra money by shopping for and delivering groceries.
These food delivery services are flexible. You can work whenever you have free time and you can typically cash out your earnings the same day, so this is great if you need to make money quickly.
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Instacart is a popular website for people looking to earn extra money shopping for and delivering groceries. Instacart gives you the option to turn your free time into a chance to make some extra money.
10. Participate in focus groups
Participating in focus groups is a quick way to make money in one day. Companies want your opinion on products or services, and they pay well for it. You can earn between $50 and $150 for an hour of your time.
Focus groups can be done online or in person. Online focus groups are convenient because you can join from home, and in-person groups might offer even higher payouts.
User Interviews is a popular site to find focus groups to take part in.
To get started, sign up on these websites and fill out your profile. Companies will contact you when a study matches your profile.
I did a user interview once and got paid $400 for just one hour of work. It was easy and done online through a video call to get my opinion on a new website feature.
Recommended reading: 19 Best Places To Find Paid Research Studies
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User Interviews pays very well for market research studies and these are some of the highest paying online surveys, with each paying $50 to $100 or more. The average pays over $60.
11. Provide handyman services
If you’re good at fixing things, selling handyman services can be a quick way to make money. Many people need help with small repairs around the house like fixing leaky faucets, installing ceiling fans, or even putting up pictures. These jobs don’t take long and can be done on short notice.
You can start by putting up flyers in your neighborhood or posting on local community boards online (for example, there’s probably a Facebook group for your town that you can join and post on).
You can also use apps like Taskrabbit to find jobs quickly. These apps connect you with people looking for immediate help. This way, you don’t have to wait long to start earning money.
You are typically paid the same day you finish the job for handyman services.
I have personally hired different handymen over the years for all sorts of services, such as a bathroom cabinet install, painting a bedroom, flooring repair, and even a roof repair.
12. Play game apps
Ever thought about making money just by playing games on your phone? There are plenty of apps where you can do just that.
Here’s a quick list of the top game platforms that pay real cash:
KashKick
Swagbucks
InboxDollars
Freecash
Game apps pay real money rewards because they earn money from ads and in-app purchases. They share a part of their earnings with players like you and me to keep them engaged and playing their games.
Recommended reading: 23 Best Game Apps To Win Real Money
13. Have a yard sale
Having a yard sale (or garage sale) is a great way to make quick money in just one day. It helps you declutter your home and turn unwanted items into cash.
You usually can’t ask for a really high price on anything, but it can be a way to sell a lot of things at once and make some cash in one day.
You can sell all sorts of things – basically anything and everything that you own.
14. Sell unused gift cards
Lots of people have gift cards they never use. Maybe you have one for a store you don’t shop at. Instead of letting it collect dust, you can sell it and get cash.
Many websites let you trade your card for money such as Raise and CardCash, which are two popular sites. They usually give you around 90% of the card’s value.
To sell a gift card, you’ll enter the store’s name and the card’s balance. You’ll get an offer right away, and if you accept it, you can get paid by PayPal, direct deposit, or even a check.
15. Find unclaimed money
Did you know there might be money out there waiting for you to claim it? It’s called unclaimed money, and it’s typically from forgotten accounts, old jobs, or refunds.
To see if you have any free money to claim, go to unclaimed.org. This site is run by the National Association of Unclaimed Property Administrators (NAUPA).
The site will then take you to missingmoney.com. This is a helpful tool that works with states to help people find their unclaimed money. You just need to enter your first name, last name, and state.
It’s free to search and free to claim your money. So, take a few minutes to check it out. You might find some extra money waiting for you!
I just looked and I had around $60 in free money that I could claim!
16. Babysit for neighbors
Babysitting is a great way to make quick money. Many parents need help, especially on weekends or evenings.
Let your neighbors know you are available. You can also ask friends to spread the word or even post in local Facebook groups.
17. Search for Craigslist gigs
Craigslist can be a great place to find quick-paying jobs. Many people need help with tasks, and they post ads looking for workers who can start right away.
To find Craigslist gigs in your town, go to Craigslist and look for the “gigs” section.
You can find jobs like yard cleanup, moving help, helping around the house, putting up flyers, event staff, selling plasma, tutor help, and more.
Some gigs you find may even be more specialized, like participating in local medical research studies. These gigs can pay quite a bit more, sometimes up to $1,000.
18. Wash or detail cars
Washing or detailing cars is a great way to make quick money. You can start by selling your services to friends, family, and neighbors. Most people appreciate a clean car and may not have the time to do it themselves.
You don’t need much to get started and most likely just need basic supplies like soap, sponges, towels, and a vacuum can be enough. For detailing, you might need some special products like polish and wax.
Once you get a few clients, word of mouth can help you grow your business. People will recommend you if you do a good job. Plus, you can adjust your pricing based on how much time and effort each job takes.
19. Cash in your coins
Do you have a jar full of coins sitting around? Cashing them in can be a quick way to get some extra money.
First, look for a nearby bank or credit union that you belong to as many will exchange coins for free if you have an account with them.
Coinstar machines are another option. These are usually found in grocery stores and retail shops. Be aware that they charge a fee if you want cash. To avoid the fee, sometimes you can opt for an egift card instead.
Learn more at Where To Cash Coins For Free Near Me – 9 Best Places.
20. Clean homes
One way to make quick money in a day is by cleaning homes. You can get paid to clean houses, apartments, or short-term rentals like those listed on Airbnb.
Cleaning tasks can include vacuuming, dusting, mopping floors, and cleaning bathrooms, and you might also need to do things like changing bed linens and washing dishes.
21. Sign-up bonuses
Sign-up bonuses are a way to make some quick money.
Many apps and websites offer these bonuses to encourage you to join them. They often come in the form of cash, gift cards, or rewards points.
Some places that give sign-up bonuses include:
Sometimes when you open a bank account, you can also get a sign-up bonus too!
22. Recycle items
Recycling can be a great way to earn quick money.
Here are some items you may be able to recycle for extra money:
Aluminum cans are easy to collect and recycle.
You can also gather old newspapers and cardboard boxes.
Metals like copper, brass, and steel can get you a good price. Sort them into different types before taking them to the scrapyard. Scrapyards often pay for clean and separated metals.
Glass bottles and jars are another option. Collect them from friends, neighbors, or local events. Check with recycling centers to see how much they pay per bottle.
Even cooking oil can be sold to companies that convert it into biodiesel or soap. Save your used cooking oil in containers and find a local recycler who buys it.
Don’t forget about selling books! Old textbooks or novels can be sold online or at local bookstores. Sites like eBay and Amazon have buyback programs that offer cash or store credit.
To make the most money by recycling, gather as much as you can, store it safely, and take it to the right place.
Frequently Asked Questions
Here are answers to common questions on how to make quick money in just one day.
How can I make money ASAP today?
If you need to learn how to get quick money in one day without paying anything, then I recommend finding things around your home to sell, such as clothes, jewelry, books, an old phone, and more.
How can I make $100 per day?
There are many ways to make $100 a day. You can sell items you don’t need like old clothes or electronics. You can also flip items for resale or sell services like cleaning or home repair.
How can you actually make $1000 a day?
Making $1000 in a day is tough but not impossible. It might involve selling high-value items like jewelry, doing freelance work, or offering specialized services. Jobs in the gig economy, such as driving or delivering, can earn you money immediately, and you can combine them with other gigs to boost your daily earnings.
How can I make money in just hours?
Try quick tasks like dog walking, babysitting, or selling items from around your home.
How to make quick money in one day as a kid?
Kids can earn money by doing chores, babysitting, or selling homemade crafts. Offering to mow lawns or do yard work for your neighbors is also a good option.
How to make quick money in one day on my phone?
Your phone can help you earn money in various ways too. You can sell things you don’t need or use your skills on freelance platforms. Answering surveys, selling photos, or being a virtual friend can also earn you money, all from the comfort of wherever you are.
How to make quick money in one day online?
To make quick money in one day online, you can take online surveys, freelance your skills, or sell items on eBay or other platforms. You can also offer services on gig websites like Fiverr.
How To Make Quick Money in One Day – Summary
I hope you enjoyed this article on how to make quick money in one day.
If you need money immediately, there are many things you can do to make money today. Whether you’re saving for a goal or dealing with an unexpected expense, these tips can help you achieve financial flexibility in just one day.
Some may be more of a part-time side gig, whereas others can be a full-time income. It all just depends on what you’re looking for.
What do you think is the best way to make money in one day?
Want to learn how to make quick money in one day? There are plenty of opportunities out there that let you earn some extra cash without a long-term commitment or if you need cash immediately. Whether you prefer working online or doing tasks around your neighborhood, you can find a side hustle that fits your…
Want to learn how to make quick money in one day? There are plenty of opportunities out there that let you earn some extra cash without a long-term commitment or if you need cash immediately.
Whether you prefer working online or doing tasks around your neighborhood, you can find a side hustle that fits your skills and schedule. From driving for a rideshare to selling unused items, making quick money in a day is more achievable than you might think.
I have personally done most of the side hustles below, so I know they are real.
Best Ways To Make Quick Money in One Day
Below are the best ways to make quick money in one day:
1. Flip items for resale
Flipping items for resale is a fast way to make money. You buy things at a low price and sell them for more. And you can even start with stuff you already have at home.
You can sell clothes, old phones, books, unused gift cards, kitchen items, and jewelry.
Many people have lots of items just lying around, so you could easily find things to sell without spending a dime to buy new stock.
Selling your items can be quick too by listing your stuff on sites like eBay, Craigslist, or Facebook Marketplace. These platforms have many buyers looking for good deals.
Recommended reading: How I Made $40,000 In One Year Flipping Items
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This free workshop will teach you how to get into the flipping business. It will teach you how to resell furniture, electronics, appliances, and anything else you can find.
2. Sell your clothes
When I was younger, I worked at a secondhand clothing store for a few years. I know how great these shops are, especially for making extra money.
I have sold a lot of clothes over the years, both online and in person. I even had a small business reselling clothes. So, I know a lot about selling used clothes!
Selling your clothes is a great way to clean out your closet and make some quick cash. You probably have clothes lying around that you don’t wear anymore, maybe because they don’t fit or aren’t your style.
You can begin by gathering items you no longer need. Check that they’re clean and in good condition. Next, decide where you want to sell them.
Local secondhand and consignment shops are an option if you prefer selling in person. These shops buy used clothes and pay you in cash or store credit. It’s quick and straightforward, but remember they might not accept everything. Secondhand and thrift stores like Plato’s Closet will give you cash the same day, so this is a good option if you need money right now.
Selling online gives you a bigger audience and more options. Sites like ThredUp make it easy. Order a Clean Out Kit, fill it with clothes, and send it back. ThredUp handles almost everything.
Another option is Poshmark. This is an app where you can list your clothes, set prices, and sell directly to buyers. You take photos, write descriptions, and ship items after they sell. Poshmark takes a small fee from each sale.
EBay is also popular. You just create listings, set starting bids, and see how much you can earn. Auctions can end quickly, so it’s great for fast sales.
Instagram can also be a fun place to sell if you have a following. You can post pictures of your clothes, add hashtags, and engage with your buyers.
Here are 16 Best Places To Sell Clothes For Cash.
3. Sell old electronics
Selling old electronics can be a great way to make quick money in one day.
You can start by looking around your home for unused gadgets such as old phones, laptops, tablets, or even game consoles.
Your old electronics can be sold on sites like Decluttr, Facebook Marketplace, and Craigslist. Retailers like Apple, Amazon, and Best Buy also have trade-in programs. You can exchange your old devices for gift cards to use at their stores.
If you want quick cash, these methods are fast and convenient. Just gather your old electronics, pick the best place to sell, and you could have extra money in your pocket by the end of the day.
4. Dog walking and pet sitting
Dog walking is a fun and easy way to make money quickly. If you love dogs and enjoy spending time outdoors, this can be a great option for you. There are several dog walking apps that connect dog walkers with pet owners.
One popular app is Rover. It’s easy to sign up and get started. You can set your own rates and choose when you want to work. Many people find Rover helpful because there’s always a demand for dog walking services.
Another popular app is Wag for people looking for a pet sitter.
Dog walking rates can vary. Typically, you can earn between $15 and $30 per hour, depending on the number of dogs and the length of the walk. This can add up quickly, especially if you take multiple jobs in one day.
My mother-in-law as well as my sister are both dog walkers and really enjoy what they do!
5. Complete online surveys
Doing online surveys is a simple way to make quick money in one day. Many companies want your opinion to improve their products or services, and by sharing your thoughts, you can earn cash or gift cards.
Some paid survey sites where you can take surveys include:
Freecash
Prime Opinion
Five Surveys
American Consumer Opinion
Survey Junkie
Swagbucks
InboxDollars
Branded Surveys
Earning money from answering surveys isn’t quick and won’t make you rich. But if you have an hour, it’s an easy way to make a little extra cash.
I have answered a lot of surveys over the years. I liked that I could do them during little breaks in my day, like before and after work, during lunch, or while riding in a car. They are easy to answer and usually only take a few minutes.
6. Freelance work
Freelance jobs are a great way to make fast money. You can use your skills to help others and get paid for it. Plus, lots of people need freelance writers, graphic designers, and web developers.
Here are some ideas:
If you enjoy writing, you can find jobs that need blog posts, articles, or even editing. Websites like Upwork and Fiverr connect you with clients who need these services.
Are you good at art or graphic design? Many businesses look for freelance graphic designers. They need help with logos, social media posts, and website designs.
Web developers can also find plenty of work online. You could help build a website or fix one that’s already running. Code issues can be tricky for many, but if you’re good at it, you can get paid well.
You can also offer services like proofreading, transcription, or even managing social media accounts. These jobs can be done quickly and still earn you money.
Freelancing gives you the freedom to choose what you do and when you work. Since it’s online, you can do it from the comfort of your home. It’s a flexible way to make quick cash on your own schedule.
I have been a freelancer for years, and I think it’s a great way to make more money.
You can learn more at 16 Best Freelance Jobs & How To Get Started.
7. Sell crafts on Etsy
Selling crafts on Etsy is a fun and creative way to make quick money. Many buyers love unique, handmade items that they can’t find anywhere else.
I shop on Etsy all the time (I actually just bought a custom card for someone as well as a specific live plant that I couldn’t find anywhere in person!).
Items like jewelry, handmade soaps, and candles are very popular. These items are easy to make and tend to sell well. Stickers and printables also have a big market and can be a good way to make a passive income stream. You can also make bath products like sugar scrubs and geode bath bombs. People love these items because they are both pretty and useful.
Here are 16 Best Things To Sell On Etsy To Make Money.
8. Rent out a spare room
Renting out a room is a great way to make money fast. If you have a spare room, you can try listing it on sites like Airbnb, Facebook, or Craigslist.
You can rent your room for a night, a week, one month, or even longer. This flexibility allows you to choose what works best for your schedule.
When I was younger, I had extra bedrooms in my house and rented them out to roommates. I rented to long-term renters and people I knew, like friends and my sister. It didn’t cover my whole mortgage, but it covered about half, which I thought was great!
9. Food delivery
Food delivery jobs can help you make quick money in one day. There are many food delivery apps and services that need drivers to deliver meals from restaurants and grocery stores to customers.
One popular option is DoorDash. As a DoorDash driver, you pick up food from local restaurants, deliver it to customers, and you can keep 100% of your tips and cash out daily.
Another good choice is Uber Eats. With Uber Eats, you set your own hours and enjoy the freedom of no boss. You can deliver food in your spare time and get paid fast.
For grocery delivery, there is Instacart. Instacart is a popular website for people who want to make extra money by shopping for and delivering groceries.
These food delivery services are flexible. You can work whenever you have free time and you can typically cash out your earnings the same day, so this is great if you need to make money quickly.
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Instacart is a popular website for people looking to earn extra money shopping for and delivering groceries. Instacart gives you the option to turn your free time into a chance to make some extra money.
10. Participate in focus groups
Participating in focus groups is a quick way to make money in one day. Companies want your opinion on products or services, and they pay well for it. You can earn between $50 and $150 for an hour of your time.
Focus groups can be done online or in person. Online focus groups are convenient because you can join from home, and in-person groups might offer even higher payouts.
User Interviews is a popular site to find focus groups to take part in.
To get started, sign up on these websites and fill out your profile. Companies will contact you when a study matches your profile.
I did a user interview once and got paid $400 for just one hour of work. It was easy and done online through a video call to get my opinion on a new website feature.
Recommended reading: 19 Best Places To Find Paid Research Studies
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User Interviews pays very well for market research studies and these are some of the highest paying online surveys, with each paying $50 to $100 or more. The average pays over $60.
11. Provide handyman services
If you’re good at fixing things, selling handyman services can be a quick way to make money. Many people need help with small repairs around the house like fixing leaky faucets, installing ceiling fans, or even putting up pictures. These jobs don’t take long and can be done on short notice.
You can start by putting up flyers in your neighborhood or posting on local community boards online (for example, there’s probably a Facebook group for your town that you can join and post on).
You can also use apps like Taskrabbit to find jobs quickly. These apps connect you with people looking for immediate help. This way, you don’t have to wait long to start earning money.
You are typically paid the same day you finish the job for handyman services.
I have personally hired different handymen over the years for all sorts of services, such as a bathroom cabinet install, painting a bedroom, flooring repair, and even a roof repair.
12. Play game apps
Ever thought about making money just by playing games on your phone? There are plenty of apps where you can do just that.
Here’s a quick list of the top game platforms that pay real cash:
KashKick
Swagbucks
InboxDollars
Freecash
Game apps pay real money rewards because they earn money from ads and in-app purchases. They share a part of their earnings with players like you and me to keep them engaged and playing their games.
Recommended reading: 23 Best Game Apps To Win Real Money
13. Have a yard sale
Having a yard sale (or garage sale) is a great way to make quick money in just one day. It helps you declutter your home and turn unwanted items into cash.
You usually can’t ask for a really high price on anything, but it can be a way to sell a lot of things at once and make some cash in one day.
You can sell all sorts of things – basically anything and everything that you own.
14. Sell unused gift cards
Lots of people have gift cards they never use. Maybe you have one for a store you don’t shop at. Instead of letting it collect dust, you can sell it and get cash.
Many websites let you trade your card for money such as Raise and CardCash, which are two popular sites. They usually give you around 90% of the card’s value.
To sell a gift card, you’ll enter the store’s name and the card’s balance. You’ll get an offer right away, and if you accept it, you can get paid by PayPal, direct deposit, or even a check.
15. Find unclaimed money
Did you know there might be money out there waiting for you to claim it? It’s called unclaimed money, and it’s typically from forgotten accounts, old jobs, or refunds.
To see if you have any free money to claim, go to unclaimed.org. This site is run by the National Association of Unclaimed Property Administrators (NAUPA).
The site will then take you to missingmoney.com. This is a helpful tool that works with states to help people find their unclaimed money. You just need to enter your first name, last name, and state.
It’s free to search and free to claim your money. So, take a few minutes to check it out. You might find some extra money waiting for you!
I just looked and I had around $60 in free money that I could claim!
16. Babysit for neighbors
Babysitting is a great way to make quick money. Many parents need help, especially on weekends or evenings.
Let your neighbors know you are available. You can also ask friends to spread the word or even post in local Facebook groups.
17. Search for Craigslist gigs
Craigslist can be a great place to find quick-paying jobs. Many people need help with tasks, and they post ads looking for workers who can start right away.
To find Craigslist gigs in your town, go to Craigslist and look for the “gigs” section.
You can find jobs like yard cleanup, moving help, helping around the house, putting up flyers, event staff, selling plasma, tutor help, and more.
Some gigs you find may even be more specialized, like participating in local medical research studies. These gigs can pay quite a bit more, sometimes up to $1,000.
18. Wash or detail cars
Washing or detailing cars is a great way to make quick money. You can start by selling your services to friends, family, and neighbors. Most people appreciate a clean car and may not have the time to do it themselves.
You don’t need much to get started and most likely just need basic supplies like soap, sponges, towels, and a vacuum can be enough. For detailing, you might need some special products like polish and wax.
Once you get a few clients, word of mouth can help you grow your business. People will recommend you if you do a good job. Plus, you can adjust your pricing based on how much time and effort each job takes.
19. Cash in your coins
Do you have a jar full of coins sitting around? Cashing them in can be a quick way to get some extra money.
First, look for a nearby bank or credit union that you belong to as many will exchange coins for free if you have an account with them.
Coinstar machines are another option. These are usually found in grocery stores and retail shops. Be aware that they charge a fee if you want cash. To avoid the fee, sometimes you can opt for an egift card instead.
Learn more at Where To Cash Coins For Free Near Me – 9 Best Places.
20. Clean homes
One way to make quick money in a day is by cleaning homes. You can get paid to clean houses, apartments, or short-term rentals like those listed on Airbnb.
Cleaning tasks can include vacuuming, dusting, mopping floors, and cleaning bathrooms, and you might also need to do things like changing bed linens and washing dishes.
21. Sign-up bonuses
Sign-up bonuses are a way to make some quick money.
Many apps and websites offer these bonuses to encourage you to join them. They often come in the form of cash, gift cards, or rewards points.
Some places that give sign-up bonuses include:
Sometimes when you open a bank account, you can also get a sign-up bonus too!
22. Recycle items
Recycling can be a great way to earn quick money.
Here are some items you may be able to recycle for extra money:
Aluminum cans are easy to collect and recycle.
You can also gather old newspapers and cardboard boxes.
Metals like copper, brass, and steel can get you a good price. Sort them into different types before taking them to the scrapyard. Scrapyards often pay for clean and separated metals.
Glass bottles and jars are another option. Collect them from friends, neighbors, or local events. Check with recycling centers to see how much they pay per bottle.
Even cooking oil can be sold to companies that convert it into biodiesel or soap. Save your used cooking oil in containers and find a local recycler who buys it.
Don’t forget about selling books! Old textbooks or novels can be sold online or at local bookstores. Sites like eBay and Amazon have buyback programs that offer cash or store credit.
To make the most money by recycling, gather as much as you can, store it safely, and take it to the right place.
Frequently Asked Questions
Here are answers to common questions on how to make quick money in just one day.
How can I make money ASAP today?
If you need to learn how to get quick money in one day without paying anything, then I recommend finding things around your home to sell, such as clothes, jewelry, books, an old phone, and more.
How can I make $100 per day?
There are many ways to make $100 a day. You can sell items you don’t need like old clothes or electronics. You can also flip items for resale or sell services like cleaning or home repair.
How can you actually make $1000 a day?
Making $1000 in a day is tough but not impossible. It might involve selling high-value items like jewelry, doing freelance work, or offering specialized services. Jobs in the gig economy, such as driving or delivering, can earn you money immediately, and you can combine them with other gigs to boost your daily earnings.
How can I make money in just hours?
Try quick tasks like dog walking, babysitting, or selling items from around your home.
How to make quick money in one day as a kid?
Kids can earn money by doing chores, babysitting, or selling homemade crafts. Offering to mow lawns or do yard work for your neighbors is also a good option.
How to make quick money in one day on my phone?
Your phone can help you earn money in various ways too. You can sell things you don’t need or use your skills on freelance platforms. Answering surveys, selling photos, or being a virtual friend can also earn you money, all from the comfort of wherever you are.
How to make quick money in one day online?
To make quick money in one day online, you can take online surveys, freelance your skills, or sell items on eBay or other platforms. You can also offer services on gig websites like Fiverr.
How To Make Quick Money in One Day – Summary
I hope you enjoyed this article on how to make quick money in one day.
If you need money immediately, there are many things you can do to make money today. Whether you’re saving for a goal or dealing with an unexpected expense, these tips can help you achieve financial flexibility in just one day.
Some may be more of a part-time side gig, whereas others can be a full-time income. It all just depends on what you’re looking for.
What do you think is the best way to make money in one day?