The hiring process includes several steps, such as submitting an application, attending an interview, and undergoing a background screening. In some cases, a prospective employer may even require a credit check. Find out why employers check your credit and discover how to prepare for this important step in the hiring process.
Why Do Employers Check Your Credit?
When you apply for a job, the prospective employer uses your résumé, cover letter, and other information sources to determine if you’re a good fit. It’s also common for employers to conduct interviews and administer preemployment tests. If an employer extends you an offer, they may also check your credit as part of a comprehensive background check.
Employers perform credit checks for three reasons: to manage risk, comply with government requirements, and reduce liability.
1. Manage Risk
Employee fraud is a major problem, costing organizations over $3.6 billion per year. The risk of fraud increases any time an employee has access to petty cash, company checks, and other assets. To better manage their risk, some organizations conduct credit checks before onboarding new employees.
Checking an employee’s credit doesn’t eliminate the risk of fraud, but it does give employers valuable information. For example, if an employee has several delinquent accounts, they may be tempted to use a company credit card to pay their bills. Even if you’d never do such a thing, a prospective employer may decline to hire you if a credit check shows you’re having financial problems.
2. Comply With Government Requirements
Many government jobs require security clearances, which help state and federal agencies determine who should have access to sensitive information. If you plan to apply for one of these jobs, be prepared to undergo a credit check as part of the hiring process.
In these situations, prospective employers conduct credit checks to comply with government requirements. For example, the FBI must follow clearance procedures set forth by executive order when hiring employees with Secret and Top Secret clearances.
3. Reduce Liability
In many cases, employers are liable for the actions of their employees. For example, if an employee mismanages funds, a company’s shareholders could sue the firm for any losses arising from the incident. Comprehensive background checks, which often include credit checks, may limit an employer’s liability if employees commit illegal or unethical acts.
Components of an Employer Credit Check
When a prospective employer checks your credit, they don’t see your official credit score. However, they do gain access to the following types of data:
Open accounts
Closed accounts
Payment history
Bankruptcies
Foreclosures
Charge-offs
Collection accounts
Your prospective employer could also see other information regarding things like your criminal history, education status, and address history.
Laws Governing Employer Credit Checks
When conducting credit checks, employers must comply with the requirements set forth in the Fair Credit Reporting Act (FCRA). The law governs what employers can do before and after they check your credit. Here’s what an employer must do before obtaining a copy of your credit report:
Get your permission in writing
Notify you that they may use your credit information to make employment-related decisions
Inform the credit reporting agency that they’ve complied with the FCRA requirements
If the employer takes adverse action based on the results of a credit check, they must also do the following:
Give you a copy of a document titled “A Summary of Your Rights Under the Fair Credit Reporting Act”
Provide a copy of your credit report
Let you know that you have the right to dispute any of the information found in your credit report
Provide the name and contact information for the consumer reporting company that provided your credit report
Produce a statement letting you know that the consumer reporting company didn’t make the decision to take adverse action against you
Your state may have additional requirements related to credit checks. For example, California only allows employers to conduct credit checks for a limited number of positions. A California employer may also conduct a credit check before hiring someone who’ll have regular access to at least $10,000 in cash.
How to Prepare for an Employment-Related Credit Check
Now that you know why employers check your credit, you need to prepare for future job opportunities. Follow these steps to strengthen your financial position and make yourself more appealing to prospective employers.
Check Your Own Credit
Many consumers have at least one error on their credit reports. Some errors are minor, but others hurt your credit scores and may make it more difficult to find a job. For example, if your credit report lists a charge-off when you’ve never made a late payment in your life, that charge-off could make prospective employers think you’re irresponsible with your money.
Before you apply for a job, get copies of your Equifax, Experian, and TransUnion credit reports. If you use AnnualCreditReport.com, you can get one free copy of each report every week. Once you have your reports, review them carefully to make sure they’re accurate. Look for incorrect account balances, open accounts marked as closed, and other types of mistakes.
If you notice any mistakes on your report, dispute them right away. Although the major credit bureaus allow online disputes, it’s better to dispute each error by mail. When you mail a dispute letter, you have the opportunity to provide additional documentation to support your claim.
Every time you write a dispute letter, make sure you send it via certified mail so you have proof of delivery.
Make On-Time Payments
Making payments on time is one of the best ways to build a strong credit profile, and it may also help you pass a preemployment credit check. If you’re worried about forgetting a due date, set up automatic payments for each account.
Pay Down Your Debt
Having debt isn’t necessarily a bad thing, but some debts are more concerning to employers than others. For example, it’s perfectly fine to have a mortgage with a $200,000 balance. As long as you make your payments on time, an employer isn’t likely to worry about a home loan.
If you have $50,000 in credit card debt, however, a prospective employer may hesitate to hire you. This is especially true if you can’t pay more than the minimum amount due each month. To avoid increased scrutiny during an employment-related credit check, do your best to reduce your debt balances.
Take Care of Past-Due Accounts
If you have a collection account or a charge-off on your credit report, there’s no need to be ashamed. However, you do need to take control of your finances. Contact your creditors to negotiate settlements or arrange to pay off your past-due accounts.
Building a Strong Credit History
Your credit history has a major impact on your life because it affects your ability to buy a vehicle, qualify for a home loan, and land the job of your dreams. Stay on top of your credit by checking your reports regularly and addressing any errors. You can get started on this goal by signing up for your free credit report card from Credit.com today.
Fears of a recession in the U.S. sent shockwaves through financial markets around the world on Monday. The Dow-Jones dropped 1,000 points by 10:30 a.m. Eastern time, the NASDAQ lost up to 6% of its value and Japanese stocks suffered their biggest crash since 1987, with the Nikkei 225 stock index dropping 12.4%.
The turbulence should benefit the U.S. mortgage market, which has already seen big interest rate declines in the past week following a Fed meeting that teased forthcoming cuts to benchmark interest rates, along with a much weaker-than-expected jobs report.
“Bond yields have made a huge move lower and have made a big move up; it’s market madness on Monday, the 10-year yield is only down a few basis points as of this second,” HousingWire Lead Analyst Logan Mohtashami said at 10:32 a.m. EST. “Mortgage pricing should be lower today, but the close of today with the 10-year yield is key because short term bonds are very overbought.”
Several loan officers and mortgage executives told Housingwire that they’ve been quoting even lower prices on Monday though they’re also having to fight for loans that were locked in their pipeline at higher prices.
As of 11:08 a.m. EST, the 10-year Treasury yield hit 3.76%, the lowest reading since June 2023, while the two-year Treasury yield moved to 3.88%, which is generally a sign of recession.
Analysts at Keefe Bruyette and Woods (KBW) on Monday said that weak employment data drove market concerns about credit and fueled an interest rate rally. Mortgage spreads tightened at the same time, taking the Fannie Mae current coupon to 5.05%.
“If long-rates remains stable, this suggests that the 30-yr Freddie Mac fixed rate mortgage should fall from 6.73% last Thursday to ~6.3% next week. The market also sharply increased expectations for Fed rates, pricing in ~4.6 25 bp cuts by year-end, including a strong likelihood of a 50 bp cut in September,” the analysts said.
“Fed funds futures now imply the Fed Funds rate could be 200 bp lower by July 2025. This backdrop should favor the mortgage universe broadly as (likely) improvement in purchase activity should benefit originators/title insurers. … We also reiterate our OP on the mortgage insurers (ESNT is highlighted here) as we expect credit to stay strong unless home prices fall sharply, which we do not anticipate.”
Analysts at Bank of America said the markets view U.S. recession risk as rising and are projecting more than 100 bps of rate cuts before year’s end.
“Incoming data have raised concerns that the US economy has hit an air pocket,” they said. “Financial markets are now pricing in more than 100bp in rate cuts by year-end and significant probability of a 50bp cut in September. Markets even began discussing whether the Fed needs to deliver intermeeting cuts. A rate cut in September is now a virtual lock, but we do not think the economy needs aggressive, recession-sized cuts.”
Loan originators and mortgage executives told HousingWire on Friday that they were locking borrowers in the high 5% range on government loans and in the mid-6% range on conventional mortgages.
Last week‘s sharp mortgage rate decline, which saw most LOs improve pricing between 20 and 60 basis points, resulted in a surge in rate locks, originators said.
“For example, I locked one loan today that would have cost the borrower 1.213 points on Monday versus 0.375 today. This loan amount happens to be $610,000, and the cost of the rate went from costing $7,400 to costing $3,200 today,” said California-based Shannon Hoff of American Pacific Mortgage. “The average mortgage loan amount in the U.S. is $405,000, and saving an extra 80 basis points could equate to $150 to $250 a month, depending on the overall scenario. This is huge for borrowers.”
According to Hoff, borrowers best positioned to take advantage of these rates are those who have purchased or taken a cash-out refinance over the past 12 to 18 months. In addition, some borrowers are looking to buy now or have been prequalified this past year.
“They can take advantage of a lower payment or even qualifying for a higher purchase price if the DTI was a key factor in the preapproval,” she said.
So you’re ready to start the next chapter in your life. Perhaps you’re moving out of your college apartment in Charleston and into a rental in San Diego, or maybe you’re considering renting a house in Austin for the first time. Regardless of your situation, your first time renting is always going to be a learning experience.
This ApartmentGuide article is packed with rental checklists, budgeting advice, and essential tips for novice renters.
Keep reading to find out the 20 key things you need to do and know for a smooth and successful first-time renting experience
1. Determining Your Budget
Setting a realistic budget is a crucial first step in the apartment hunting process. Start by evaluating your monthly income and subtracting essential expenses like food, transportation, and existing bills. Next, account for one-time costs such as security deposits, moving expenses, and application fees. Also, consider ongoing expenses like utilities, renters insurance, and potential maintenance costs. Financial experts recommend that when calculating your rent, it should ideally consume no more than 30% of your monthly income.
2. Choose your neighborhood
Choosing the right neighborhood is crucial when renting your first apartment. Consider factors like proximity to work, preferred transportation methods, and the overall vibe of the area. Ask yourself:
How close am I to work?
Do I prefer driving, taking public transportation, or walking?
Do I need quiet, or do I want to live in the middle of it all?
Is my dream location more expensive than its surrounding neighborhoods?
How far do I want to be from museums, restaurants, and attractions?
Additionally, think about the convenience of essential shops and services. Living near grocery stores, hair salons, and good restaurants can significantly enhance your daily life. Having a few walkable options is a bonus, as is being close to public transportation if it’s available. Make sure to factor in your commute time by mapping out the distance during typical travel hours. A long commute can affect your daily routine, so it’s essential to find a balance between your ideal neighborhood and practicality.
3. Decide if you need a roommate
Deciding whether to have a roommate is a crucial step in renting your first apartment. Having a roommate can significantly reduce your financial burden by splitting rent, utilities, and other expenses. However, living with someone requires compatibility and mutual respect for each other’s lifestyles and habits.
Consider the following factors when deciding if you need a roommate:
Financial benefits: Sharing costs can make living in a desirable neighborhood or a larger apartment more affordable.
Lifestyle compatibility: Ensure your potential roommate has a compatible lifestyle, including cleanliness standards, sleep schedules, and social habits.
Shared responsibilities: Discuss how household chores, groceries, and other responsibilities will be divided.
Privacy needs: Determine how much personal space and privacy you need and whether a roommate arrangement can accommodate this.
Conflict resolution: Consider your ability to communicate effectively and resolve conflicts, as disagreements are inevitable.
Having a clear roommate agreement and understanding from the start can help ensure a harmonious living situation. Whether you decide to live alone or with a roommate, make sure it aligns with your financial situation and personal preferences.
4. Decide if you need a co-signer
Sometimes, first-time renters may need a co-signer to secure an apartment. A co-signer, often a guardian or a close one, agrees to take on the financial responsibility if you are unable to pay rent. This can be crucial if you have limited credit or rental history. Make sure your co-signer is prepared to provide their financial information and sign the lease agreement.
If you don’t need a co-signer, consider collecting a few character references to write letters you can bring with when you turn in your rental application. Since you won’t have a rental history, these can help persuade the property owner that you’ll be a good tenant.
5. Know the upfront costs
Rent is not your only financial concern with a new apartment. Even before the monthly expenses, you need to save for the additional fees. Between application fees, a security deposit, a pet fee if applicable and first and last month’s rent, you’re going to shell out some serious money before you even get the keys to your first apartment.
To budget for this, plan on having a few months’ rent already in the bank to cover costs.
6. Know your long-term costs
Renting an apartment for the first time involves various long-term costs. Initially, you’ll need to cover the security deposit and possibly the first and last month’s rent upfront. Monthly rent payments are the most obvious ongoing expense, but utilities, renter’s insurance, and maintenance costs also add up. Over time, your rent costs may increases and moving costs can further impact your budget. Here are some of the long term costs associated with renting that you should plan for:
Security deposit
First and last month’s rent
Monthly rent payments
Utilities (electricity, water, gas, internet)
Renter’s insurance
Maintenance and repair expenses
Rent increases
Furnishing and replacing items over time
7. Prepare any necessary documents
Preparing the necessary paperwork is an essential step when renting your first apartment. Gathering documents like recent pay stubs, bank statements, and photo ID in advance can expedite the application process. Property managers typically require verification of your identity, employment, and financial stability. Being organized and ready with these documents will help ensure a smoother and quicker review.
8. Understand lease terms
Lease terms refer to the specific conditions and rules outlined in a rental agreement that both the landlord and tenant must follow. Familiarize yourself with common rental agreement terms and read your lease thoroughly. If anything is unclear, seek clarification before signing. Pay special attention to sections on regulations, restrictions, late rent policies, and potential eviction actions. If you find terms you disagree with, discuss them with your property manager. It’s acceptable to request changes, though not all negotiations will be successful. Being well-informed and proactive ensures you understand your obligations and rights as a tenant.
9. What amenities are you looking for?
If you made a list of things that you couldn’t live without in your first apartment, what would be on it? Do you need in-unit laundry so that you don’t need to leave your apartment to do laundry Do you need an on-site workout room to help keep you in shape? Do you need an elevator instead of stairs to get to your apartment? These are important things to consider when renting an apartment to ensure you enjoy where you’re living.
10. Pet or no pet
If you have pets or plan to get one, it’s important to factor them into your apartment search. If you have a furry friend, make sure your property manager allows pets and your particular breed. Most pet-friendly buildings have a pet deposit or add a pet fee onto your monthly rent, so it’s good to know how much that is for budgeting.
11. Know when the best time is to rent an apartment
Timing your apartment search can significantly impact your options and costs. Understanding the rental market’s seasonality and when the best time is to rent an apartment will help you find the best deals and the widest selection of available units. Here are some key points to consider:
Peak seasons: The busiest times for apartment hunting are late spring and summer (May through August). During these months, many leases end, and new inventory becomes available. However, competition is high, and rent prices can be at their peak.
Off-peak seasons: The best deals are often found in the fall and winter months (October through February). Fewer people are moving, so landlords may lower prices or offer incentives to fill vacancies. While the selection might be more limited, you can take advantage of lower rents and reduced competition.
Early planning: Start your search at least two months before your desired move-in date. This allows you to explore multiple options and secure a place that meets your needs and budget.
Flexibility: If possible, be flexible with your move-in date. This can give you leverage to negotiate better terms or take advantage of last-minute deals.
12. Do you need renter’s insurance?
Renter’s insurance protects your personal belongings, covers liability if someone is injured in your apartment, and helps with temporary housing costs if your apartment becomes uninhabitable. It’s usually affordable, costing around $15 to $30 per month. Some landlords require renter’s insurance, but even if it’s not mandatory, having it is a smart way to protect yourself and your belongings.
13. Questions to ask during an apartment tour
When touring potential apartments, asking the right questions can help you make an informed decision. Here are essential questions to consider:
What is the monthly rent, and what utilities are included? Are there any additional fees?
What is the length of the lease? Are there options for month-to-month or shorter-term leases?
What is the security deposit, and are there any non-refundable fees? Are there pet deposits or fees?
How are maintenance requests handled? Is there a 24/7 emergency maintenance service?
What amenities are available (gym, pool, laundry facilities)? Are there any additional costs for using these amenities?
Is parking available, and is there a fee? What are the options for public transportation nearby?
What security measures are in place (gated access, security cameras)? How is the neighborhood’s safety?
How are lease renewals handled? What is the history of rent increases in the building?
Is subletting allowed? What are the terms for breaking the lease early?
14. Know how to spot rental scams
Protecting yourself from rental scams is essential when searching for an apartment. Scammers often target unsuspecting renters with too-good-to-be-true deals or pressuring tactics. Here’s how to spot and avoid rental scams:
Too good to be true: If the rent is significantly lower than similar properties in the area, it might be a scam. Be cautious of deals that seem too good to pass up.
No in-person viewing: Scammers often avoid in-person meetings. Insist on seeing the property before making any commitments. If the landlord makes excuses for not showing the apartment, it’s a red flag.
Upfront payments: Be wary of landlords asking for large sums of money upfront, especially if they demand cash or wire transfers. Legitimate landlords will typically require a security deposit and the first month’s rent, but not before you’ve seen the property and signed a lease.
Pressure tactics: Scammers might pressure you to act quickly, claiming there’s another interested tenant. Take your time to research and verify the legitimacy of the listing.
Incomplete or suspicious listings: Listings with vague details, grammatical errors, or lack of contact information should raise suspicion. Check for consistency across different rental platforms and look for professional presentations.
Verify ownership: Research the property and verify the owner’s identity. Check property records or contact the building’s management to confirm the landlord’s legitimacy.
15. Pack by priority
Packing for your first apartment is a great opportunity to declutter and start fresh. Instead of bringing everything from your childhood home or college dorm, prioritize what you really need and use. Here’s how to streamline your move:
Declutter: Assess your belongings and decide what’s essential. Let go of items that are no longer useful or hold sentimental value only.
Donate or recycle: Give away or recycle things you don’t need. This reduces clutter and helps others.
Store sentimental items: For items you’re not ready to part with, consider storing them at a close one’s or friend’s place. If you don’t miss them after a few months, it’s a sign you can let them go.
By packing only what’s necessary, you’ll make moving easier and keep your new apartment organized and clutter-free.
16. Move-in plan
The two common options for moving are doing it yourself or hiring professional movers. Once you decide which way to go, schedule your move-in day. Rent your own moving van and secure friends who can commit to helping. Call around to a few local movers, get price quotes and put down a deposit. Shop for moving supplies a few weeks before the big day and begin packing in small increments to make sure you aren’t doing it all at the last minute.
Informing your property manager or landlord of your move-in day is essential for a smooth transition. It allows them to prepare facilities, such as reserving the elevator or protecting floors and walls during the move. Additionally, it ensures they can have the apartment ready, complete any necessary maintenance, and provide you with keys and access instructions.
17. Essential items for your first apartment
Once your lease is signed, it’s time to focus on outfitting your new apartment with essentials. Start with the basics: a bed, seating, dishes, and basic kitchenware. Prioritize items that you’ll use daily, like sheets, towels, cleaning supplies, and paper products. Shopping for these necessities before moving day ensures you’re prepared from the start. Remember, some furniture items might take a few days to be delivered, so plan accordingly.
After securing the essentials, gradually expand your list to include items like trash cans, dressers, a coffee table, and a dining set. Buy based on what you can afford and what you genuinely need, avoiding the urge to splurge on non-essentials.
18. First time apartment traps to avoid
While it’s tempting to fill your new apartment with all the latest gadgets and decor, focus on what you truly need versus what you want. Limited space means prioritizing functionality over luxury. Avoid cluttering your kitchen with seldom-used appliances like bread makers or stand mixers unless you cook often.
To avoid overcrowding, realistically assess your storage space and layout. If possible, obtain a floor plan or take measurements of your new apartment before move-in day. This helps in planning your purchases and ensures you don’t overdo it with unnecessary items. Prioritizing essential items and thoughtful planning will make your new apartment functional and comfortable without overwhelming it with clutter.
19. Maximizing your space and organizing
Effective storage solutions are crucial for maintaining an organized and clutter-free apartment. Most apartments lack extensive closet space and built-in shelving, so you’ll need to get creative with space-saving options. Under-bed storage bins are excellent for storing off-season clothing, while furniture pieces like ottomans with hidden compartments provide extra storage. Bookcases, wall-mounted shelves, and decorative bins can also help keep your essentials organized and add aesthetic appeal.
To avoid a cluttered feel, use a combination of storage solutions that blend functionality with style. Thoughtful organization will make your apartment feel more spacious and comfortable.
20. Personalizing and decorating your apartment
Decorating your apartment transforms it into a home that reflects your personality. Start by selecting favorite pictures, art pieces, and decor items that resonate with you. Consider creating a cohesive design with a color scheme or theme that ties your space together.
Take your time with this step and let it evolve naturally as you settle in. Prioritize getting essential items in place first, as this will give you a better perspective on how to incorporate decorative elements effectively. Thoughtful decoration not only enhances your living space but also makes it uniquely yours.
Have you ever watched somebody pull out a set of jumper cables and thought, “I really should learn how to jump-start a car someday”?
It isn’t a difficult process. But to avoid damaging your car or hurting yourself, you should perform each step carefully, in the correct order, and with the right equipment.
By learning how to properly jump-start a car battery by yourself, you can save time, money, and hassle. In this guide, we’ll cover how to jump-start a car, how long it can take, and what you’ll need to get the job done.
How To Jump-start a Vehicle
Whether your battery is temporarily drained of power or truly dead, there are a few ways to get your car back on the road. The most important step is learning how before you’re stuck on the side of the road.
The most common method is to use a set of jumper cables and another car’s battery to give yours the charge it needs to get started. Or if you keep a portable jump-starter in your car, you may be able to give your battery a needed boost without anyone else’s help. And if you drive a car with a manual transmission, it might be possible to “pop the clutch” or “push-start” the car.
By the way, it helps if you have a good battery without a lot of corrosion on the posts. (A 12-volt battery typically lasts around six years. Batteries can deteriorate faster if you don’t drive much.) You may want to make checking the battery part of your routine to help save money on car maintenance.
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How to Jump-start a Vehicle with Jumper Cables
Before you try to jump-start any vehicle for the first time, it’s a good idea to read the owner’s manual, just in case there is anything you should know about that specific model. But the steps are basically the same no matter what you’re driving.
Get Out Your Jumper Cables
Jumper cables come in sets of two: The positive cable has red clamp at each end, and the negative cable has black clamps. You’ll need both cables to jump-start a car.
Jumper cables aren’t standard equipment with most vehicles, so you’ll have to purchase a set to keep in your trunk. You can purchase a new set for about $20-$40. You may want to keep a pair of gloves and safety glasses with the cables.
Get Another Car to Cozy Up Next to Yours
If you’re at home and have a second car, you might even be able to do this by yourself. Otherwise you’ll have to call a friend or flag down a Good Samaritan. The two cars should be parked close enough that you can connect the cables without pulling them too tight, but leave enough room so you can move comfortably between the cars. Both cars should have their engine turned off and the emergency brake on.
Open the Hood on Each Car
Open the hood and locate the battery in each car. Then look for the negative and positive terminals on each battery. The positive terminal should have a plus sign (+) and/or a red cover. The negative terminal should have a minus sign (-) and/or a black cover.
Connect the Jumper Cables
Start with the dead-battery car. Attach one red clamp from the positive cable to the dead battery’s positive terminal. The clamp should “bite” through any corrosion and onto the metal terminal. If you have the black clamp of the other cable near the dead-battery car, be sure it isn’t touching any metal surfaces before you move over to attach both clamps to the booster (working) car.
Move over to the booster car. Attach the other red clamp from the positive cable to the positive terminal on the booster car’s battery. Then attach a black clamp from the negative cable to the booster battery’s negative terminal.
Go back to the dead-battery car. Attach the other black clamp from the negative cable to an unpainted metal surface on the engine. (You can look for an unpainted bolt or bracket that is several inches away from the battery.)
Check the cables to be sure they aren’t dangling or exposed to any moving parts in either vehicle.
Turn Off All Accessories
Before starting the booster car, check that all electronics are turned off in the dead-battery car. This includes hazard lights, the air conditioner or heater, radio, cell phone charger, etc.
Start the Booster Car
Put the booster car in park, start the engine, and let it idle for a few minutes. Don’t race the engine, but gently rev it to a bit above idle for 30 seconds or so to help the charge get to the dead battery. An older battery may take more time to charge.
Start the Dead-Battery Car
Try starting the car with the dead battery, and if it works, let it idle for several minutes. (Ask the driver of the other car to please wait while you do this.)
If the disabled car doesn’t start, disconnect the black clamp from the dead battery, check to make sure all your other connections are good, then replace the black clamp to the dead battery. Start the booster car again and let it idle for five minutes. Then try again to start the non-working car. If you repeat this process a couple of times and the car still won’t start, you may have to call for a tow truck.
Disconnect the Jumper Cables
Once the dead-battery car is running, you can disconnect the four clamps, working in reverse order. Be careful to remove the black clamp from the dead-battery car first, and keep it away from any metal and the other cable clamps while you work your way through the rest of the clamps. Then remove the black clamp from the working car, the red clamp from the good battery, and the red clamp from the dead battery.
Replace the plastic post protectors if either car has them. Keep fingers, clothing, and equipment away from any moving parts.
Keep the Dead-Battery Car’s Engine Running
Let the engine in the car you jump-started run for about 20 minutes so the alternator can recharge the battery. Drive somewhere safe (home or to a friend’s house, for example) before you shut off the car and try to start it up again.
If the car won’t start up again, you may have to get another jump-start or buy a new battery. You may even want to take the car straight to a mechanic to have the battery tested and, if necessary, replaced.
How to Jump-start a Car with a Portable Jump-starter Device
If you like the idea of being completely self-sufficient, you may want to purchase a portable jump-starter to keep in your car. The portable unit can take the place of a second vehicle when you need to charge your battery. Here’s how it works:
Confirm That the Unit’s Battery Is Charged
Before you stash the battery pack in your car, check that it has enough juice. Units typically plug into a common household outlet, and take an hour or longer to charge. Read the directions before you use the charger for the first time.
Attach the Cables
The unit will have two cables coming out of it: one with a red clamp and one with a black clamp. The unit and your car should be turned off. Then, with your car in park, attach the cable with the red clamp to the positive post on your car battery, and the cable with the black clamp to a bare metal area on the car. (Check your device’s directions for specifics.) Ensure that the unit won’t fall over or into the engine when you start the car.
Turn on the Power
When you’re ready, hit the power switch on the jump-starter device.
Start Your Car
Try to start your engine. If the problem is a dead battery, the engine should turn over.
Disconnect the Clamps
Just as you would when using jumper cables, let the car run above idle for a few minutes to help the battery charge. Then, with the car still running, turn off the power to the device and carefully disconnect the black and red clamps. Drive the car to a safe place or take it to a mechanic to have the battery tested.
To charge a motorcycle, the steps are pretty much the same if you’re using the portable jump-starter. It may be better for your bike than using a car battery, and easier than using another motorcycle. You also can try push-starting your motorcycle.
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How to Push Start a Manual Transmission
This method is sometimes called “bump starting,” “clutch starting,” or “popping the clutch.” The idea is to get the car moving fast enough (by going downhill, getting some helpers to push it, or pushing it bumper-to-bumper with another car) that you can put it in gear, quickly let out the clutch, and get the engine to turn over. (If you enjoy learning new terms, consider adding some car insurance terms to your repertoire.)
When you get a push, warn your helpers that the car may jerk a bit when you pop the clutch. If someone offers to use their car to push you, be sure you can do so without denting or scratching either car.
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Get into Gear
Depress the clutch pedal, and put the car into second gear.
Turn the Key Part Way
Turn the key one step to turn on the car, but not far enough to start the engine.
Get the Car Moving
If you’re at the top of the hill, you may be able to do this on your own, just by taking your foot off the brake and letting it roll. But you’ll likely need other people or another car to push your car. Keep the clutch pedal down.
Pop the Clutch
When the car is moving about 5 mph, quickly let your foot off the clutch pedal. The car may jerk a bit and the engine should turn over and start. If it doesn’t, you can try depressing and popping the clutch again while the car is still rolling.
Words of Caution Before Jump-starting Your Car
Once you learn how to do it, jump-starting your car can be fairly simple. But because there may be sparks, and batteries can explode, it’s always important to go through each step cautiously.
• Do keep your face as far from the battery as you can while you’re attaching the cables.
• Don’t let the clamps dangle near any metal while you’re attaching them. Don’t cross the cables when you’re attaching them to the batteries. Do keep the cables clear of the engine when you’re ready to start the cars.
• Do avoid connecting all four clamps to battery posts. It’s safer to attach the black clamp to bare metal on the disabled car.
How Long Will It Take To Jump-start Your Car?
Once you know the basics of jump-starting a battery, you can expect it to take 15 to 20 minutes. Of course, waiting until you find another motorist to help you could add to the overall time.
If you’re a first-timer, it may take longer than 20 minutes. But you can cut down that time just by knowing where your jumper cables are, and where your car battery and battery terminals are located. (Speaking of first-timers, new drivers may benefit from these car insurance tips for first-time drivers.)
Calling for Help
If you don’t feel comfortable jump-starting a car yourself or don’t feel safe where you are, you can always call a pro for help when your battery dies. The jump-start or tow might even be free if you have a roadside assistance plan through your car insurance policy. Most plans include jump-starts as a basic service, but you should verify in advance what your coverage offers.
Recommended: How to Lower Car Insurance & Save Money
The Takeaway
Jump-starting a car isn’t that complicated, and it doesn’t take long — if you have the right equipment and know the proper steps. Still, it’s important to use caution as you go through the process to avoid hurting yourself or damaging your vehicle. The hardest part might be finding someone who will let you use their car for the jump (or give you a push, if you’re trying that method). And you’ll have to be in a spot where you can park two cars close enough together that you can use your jumper cables.
If you don’t want to — or can’t — jump-start your car, you may decide it’s easier and safer to call roadside assistance. You can purchase roadside assistance through an auto club, and many car insurance companies offer inexpensive plan options as part of their coverage. If you haven’t had a personal insurance planning session lately, this might be a good time to review your options.
And if you’re looking for the best car insurance for your needs, it can help to compare your current auto insurance policy to what other top insurers are offering.
When you’re ready to shop for auto insurance, SoFi can help. Our online auto insurance comparison tool lets you see quotes from a network of top insurance providers within minutes, saving you time and hassle.
SoFi brings you real rates, with no bait and switch.
FAQ
How long does it take to jump-start a car?
The process — attaching the cables, starting the cars and running both for a few minutes, then detaching the cables — should take just a few minutes. It’s a good idea, though, to keep the booster car around for a few minutes after that, just to be sure the boosted car keeps running and can get back on the road.
How long should you let a car run after you jump-start it?
You should let a car idle for several minutes after you jump-start it, to be sure you have a sufficient charge. After that, it’s important to let it keep running or drive it for at least 20 minutes so the battery can fully charge.
Can you jump-start a car alone?
It’s possible to jump-start a car alone if you’re home and have a second car handy to use as a booster car, or if you have a portable jump-starting device with you.
Photo credit: iStock/evrim ertik Insurance not available in all states. Experian is a registered service mark of Experian Personal Insurance Agency, Inc. Social Finance, LLC (“SoFi”) is compensated by Experian for each customer who purchases a policy through Experian from the site.
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.
“For example, I locked one loan today that would have cost the borrower 1.213 points on Monday versus 0.375 today. This loan amount happens to be $610,000, and the cost of the rate went from costing $7,400 to costing $3,200 today,” Hoff said. “The average mortgage loan amount in the U.S. is $405,000, and saving an extra 80 basis points could equate to $150 to $250 a month, depending on the overall scenario. This is huge for borrowers.”
According to Hoff, borrowers who take advantage of these rates are those who have purchased or taken a cash-out refinance over the past 12 to 18 months. In addition, some borrowers are looking to buy now or have been prequalified this past year.
“They can take advantage of a lower payment or even qualifying for a higher purchase price if the DTI was a key factor in the preapproval,” she said.
Hoff has already advised her clients on “rate alerts” to “get the ball rolling now so that they can be prepared for when the rate reaches the level of benefit.”
Looking forward, she believes rates will be volatile and “jump all over the place, just like the stock market.”
“Usually, when rates take a big drop, we see a correction the following week,” Hoff said. “I hope this is not the case, but I advised my clients that this is the reason why I locked three loans today.”
Cutting fees for VA borrowers
Patton Gade, the national director of military lending at UMortgage, said he believes the market has already priced in a September rate hike. He’s not limboing as low as possible on rates but is stacking fees on top or structuring refis to eat up equity.
“Some will dazzle with a 5.2% rate, but they’re charging a full point on the origination fee and two discount points,” Gade said. “I believe the best way to care for the veteran is a loan with little to no fees. The lowest rate for the lowest possible cost is the way I want to go.”
As for the future, he’s not banking on the notion that rates are going to continue dropping into the low 6s and beyond.
“You can’t bet your life or client’s financial future on what we think might happen in the next six, 12, 18 months. Things happen that are unexpected,” Gade said.
Daniel Sa, a division president at NFM Lending, said he’s been proactive in communicating with past clients about how they can benefit from refinances. He’s telling clients they can refi with no lender fees and get an appraisal reimbursement.
“Given the recent positive shifts in the mortgage rate environment, we believe the coming months, especially between September and December, will be the optimal time for our clients to refinance,” Sa said.
“For new customers, we are currently quoting competitive rates that reflect both the current market conditions at 6.375% to 6.750% and our anticipation of further rate reductions,” he said. “This strategic positioning is designed to ensure our clients not only benefit from potential rate decreases but are also well-informed and prepared to act quickly to optimize their mortgage terms.
“Our aim is to keep our clients ahead of the curve, maximizing their financial benefits and enhancing their overall satisfaction with our services.”
Living frugally doesn’t mean giving up the things you love. It’s about making smart choices and finding ways to save money without sacrificing comfort.
In this post, you’ll find the top frugal living tips for around the house. These practical ideas will help you cut costs on everyday expenses, reduce waste, and make your home more efficient. Whether you’re looking to save on your utility bills, groceries, or household items, these tips will help you stretch your budget and make the most of what you have.
Adjust the temperature
Image Credit: Fedcophotography from Getty Images.
Turn down the heat or air conditioning at night to save on energy bills. It’s good for your wallet and your health.
Cut back cell phone plan
Image Credit: Bongkarngraphic.
Save money by reducing your cell phone plan’s data plan. Make sure it still meets your needs. This is especially true for preteen or teen cell phone plans.
Make clothes last longer
Image Credit: Joey333 from Getty Images.
Wash clothes less often and use gentle detergents to keep them looking new. This helps you spend less on clothes.
Shop for clothing on clearance
Image Credit: Meyes from Getty Images.
Buy clothes on clearance to save money. I have found that shopping off-season can get you great deals. Plus only buy what you truly need.
Learn More: How to Shop for Clothes on a Budget
Eliminate cable or satellite TV
Image Credit: Tomasworks from Getty Images Signature.
Save money by streaming shows online instead of paying for cable or satellite TV. You may opt for monthly billing to binge watch shows.
Switch cell phones
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Consider switching to a cheaper cell phone provider. There are so many new providers to the market. Just check if they offer good service in your area.
Look into your energy usage
Image Credit: RossHelen.
Adjust your thermostat a few degrees to save money on energy. Invest in a comfy sweatshirt to stay warm.
Limit trips to the salon
Image Credit: Syda Productions.
Save money by cutting your own hair or letting your natural color grow out. This was one of the ways we paid off debt faster!
Turn off unused lights
Image Credit: Piya Sarutnuwat from Meepoohyaphoto.
Turn off lights when you leave a room to save on your electricity bill. This is a simple adage, but it still holds true.
Buy in bulk
Image Credit: Juliet Dreamhunter from Getty Images.
Save money by buying items like toilet paper and toothpaste in bulk. Be wise with what you buy that will you actually use the extra items.
Save money on laundry
Image Credit: Pixelshot.
Wash clothes at night and hang them up to dry. This saves money and keeps clothes in good shape. For U.K. folks, this is a normal practice.
Check out the Must Haves for a Frugal Home
Image Credit: MStudioImages from Getty Images Signature.
Incorporating these frugal living tips into your home can significantly reduce your overall costs. By embracing a minimalist approach, being mindful of your spending, and making smart choices, you can create a comfortable and budget-friendly living space that aligns with your financial goals. Remember, small changes can lead to big savings over time, so start implementing these frugal home essentials today for a brighter and more financially secure future.
To learn more: 25 Frugal Home Must Haves To Save Money for Clean and Organized Home
Know someone else that needs this, too? Then, please share!!
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More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
Buying things takes less time these days — you can have your week’s groceries, a new outfit and a used car headed to your front door in a matter of hours, thanks to technology. But this convenience comes with a price.
New data from the Bureau of Labor Statistics reveals fewer people are shopping on any given day than they were 20 years ago, and those who do are spending less time on the task. However, we’re spending more money, likely because we no longer have to even open our wallets, let alone leave the house, to buy all of the things we need or desire.
While our efforts have eased, online shopping has helped drive a dramatic increase in retail spending over the past few decades. Whether it’s your groceries or wardrobe, you’ve likely succumbed to more impulse buys because it’s just so darned easy.
We’re spending less time shopping
From 2003 to 2023, the share of people shopping on any given day fell from about 46% to just under 40%, according to the American Time Use Survey, an annual release from the Bureau of Labor Statistics that examines how we spend our hours.
Further, when we do shop, we’re being a little quicker about it. The amount of time spent by those shopping on a given day fell by about six minutes during the 20-year period.
One way of looking at this, in terms of efficiency, is that we’re getting better at shopping — we can do what we need to in less time, on a fewer number of days. However, efficiency implies we’re getting greater returns on our efforts. In this case, it may only be a little time back, because we’re actually buying more.
Our efficiency is costing us; online shopping likely to blame
Retail sales data, a measure that gets close to the definition of shopping (though it doesn’t include shopping for services, which the time use survey does) indicates a 37% increase — from $437 billion per month in the first quarter of 2003 to $597 billion 20 years later, after adjusting for inflation. And one category within this data has seen far more dramatic growth.
Over the past two decades, we’ve seen online shopping go from novelty to commonplace. Spending on “electronic shopping and mail order houses” — the quaint-sounding U.S. Census Bureau category that applies to your late-night, couch-side shopping sprees — has grown from about $17 billion to $99 billion since 2003, after adjusting for inflation. That’s an increase of about 470%. And the inflation adjustment means we’re not just spending more, we’re buying more “stuff.” Turns out, when you don’t have to leave the house or even get dressed to go find a new hat, or three, you’re more likely to buy them.
Slowing down the shopping process
Personally, as I prepare to take a vacation, I know for a fact I’m purchasing more items for my trip simply because it’s convenient. I’m ordering two scarves to compare and keep the one I want; blister balm and a few kinds of bandages for the inevitable foot pain I’ll encounter walking around; travel-size everything to ensure I don’t have to check a bag; and a few new outfits to break in while abroad. Twenty years ago, this would have likely required multiple trips to multiple stores, and I wouldn’t have made all of these purchases. But I do now because I can. And it’s this frictionless shopping experience that makes it easy to overspend.
It’s one thing to shop within your means for the things you need, and another to be hit with pangs of guilt when the packages pile up outside your door. If you find you’re buying more stuff than you’d like, introducing speed bumps to the otherwise seamless process could help:
Shop with intent. Browsing with no purpose in mind can lead to purchases of things you don’t really need. Before you navigate to your favorite retailer just to “see what’s new,” ask yourself what you’re really looking for. If there’s no pressing need for new pants or yet another basic white tee, maybe you wait until there is a definitive need or reason to shop before placing yourself in the center of your favorite virtual stores.
Set shopping times, and avoid impulse buys. Limit the days or times of day when you allow yourself to shop. While it’s not the same as having to leave the house, find parking and contend with crowds, limiting yourself to certain shopping periods can help focus your objectives. Not to mention, it builds in a waiting period when impulses hit.
Instate a holding period, when possible. Filled your cart? Great, now walk away. Take a timeout between the selection and buying processes. This pause can help you gain perspective on potential purchases, and you may delete a few things before checking out. Some retailers are onto this tactic, however, and give you a limited amount of time before they empty your cart for you. Don’t let their timer rush a buying decision you aren’t absolutely certain about.
Review your purchases on a regular basis. Once a week or once a month, sit down and look at your shopping from the prior period. What did you buy? What did you end up returning? What should you have returned but didn’t? Reflecting on your most recent purchases can help you spot patterns or spending categories that you may be able to work on.
It’s almost become a trope at this point. Your friend’s aunt bought some Apple stock way back when and now lives full-time on a yacht. Or your cousin knows somebody who knows somebody who bought some Microsoft stock for a few dollars a share in the ’80s, and now they’re a multimillionaire.
These stories are practically the stuff of urban legend. But if you’re looking to buy a first tech stock or want to add some diversity to your portfolio, you may find the reality to be slightly different from the stories. There are many kinds of tech stocks, each with its own performance trends, pros, and cons. Here are a few fundamental truths worth knowing about investing in tech stocks.
Why Investors Are Investing in Technology
Much of the recent growth in the stock market overall has been concentrated in the shares of technology companies. Technology stocks, as measured by the S&P Technology Select Sector Index, rose 129.8%, or 18.11% annually, during the past five years. In contrast, during that period, the broad S&P 500 Index grew by 60.2%, or 9.9% annually.
The top five most valuable companies in the S&P 500 are technology-related companies. These firms — Apple, Microsoft, Alphabet (the parent company of Google), Amazon, and Tesla — have an average market capitalization, or overall stock value, near $1 trillion or more. And during the past five years, the stocks of these companies have experienced substantial growth.
Five Largest Companies in the S&P 500 Index
Company
Ticker
Market Cap*
5-year growth*
Apple
AAPL
$2.5 trillion
302.5%
Microsoft
MSFT
$1.9 trillion
256.0%
Alphabet
GOOGL
$1.4 trillion
134.7%
Amazon
AMZN
$1.3 trillion
170.6%
Tesla
TSLA
$868.5 billion
1,104.6%
*As of Sep. 2, 2022
Investors flock to technology companies, especially the previously mentioned tech giants, because they’re often considered solid businesses.
The products of technology companies — especially software companies — are relatively cheap to reproduce but can be quite expensive to buy. Apple, for example, prices iPhones ahead of their competitors, sells a lot of them, and then operates an ecosystem of apps and services that generate steady revenue. Amazon’s success is attributed to the effectiveness of its operations and low prices. For Alphabet, the sheer scope of its networks and the popularity of its services allows them to sell more ads than its competitors.
Aside from the giants that have established business models, many investors pour money into tech companies due to the promise of future earnings. Even when tech companies are not profitable or see regular cash flows, investors will still support the stocks because of the potential for future earnings. Companies like Amazon and Tesla took years before they turned steady profits.
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Popular Technology Stocks to Own
The technology industry is incredibly diverse. Beyond the five companies mentioned above, these are some of investors’ most widely held technology stocks.
Companies in the S&P Technology Select Sector Index
Company
Ticker
Technology Sector
Market Cap*
5-year growth*
Nvidia
NVDA
Semiconductors
$539.4 billion
233.8%
Broadcom
AVGO
Semiconductors
$198.7 billion
104.7%
Adobe
ADBE
Software
$219.7 billion
137.0%
Cisco Systems
CSCO
Communications Equipment
$187.5 billion
41.6%
Salesforce
CRM
Software
$153.5 billion
59.9%
*As of Sep. 2, 2022
How Can You Invest in Tech Stocks?
At the most basic level, you can invest in tech stock by buying the individual stocks of an appealing company.
Another way to invest in tech is by trading technology-focused exchange-traded funds (ETFs) or mutual funds. Tech ETFs and mutual funds allow investors to diversify their investments in a single security, which may be less risky than buying a specific company’s stock.
If you are interested in a particular tech sector — like artificial intelligence or green tech — you can invest in more targeted funds rather than broad-based technology-focused ETFs.
Different Sectors for Technological Investment
The technology industry is vast, filled with companies specializing in different areas of the market. For an investor, this means it’s possible to diversify, investing in tech stocks across various sectors.
Artificial Intelligence
Artificial intelligence (AI), which refers to ways that computers can process data and automate decision-making that humans would otherwise do, is a burgeoning tech sector. Many companies are operating in this sector, using new technologies to support fields like finance and healthcare. Artificial Intelligence, along with the related field of Machine Learning (ML), has long been one of the most exciting technology areas.
Transportation
Another bustling sector of the industry is transportation. Tech underlies all transportation, and some of the most exciting companies are building electric cars, creating the batteries and software that support the navigation and operational systems in automobiles, or using software to connect drivers and passengers.
💡 Recommended: Investing in Transportation Stocks for Beginners
Streaming
Streaming companies have completely revolutionized the entertainment industry. These companies offer direct-to-consumer content, including shows and movies, that is bundled in a monthly subscription. There are standalone streaming companies, companies that include streaming as an ever-growing part of their business, and companies that build digital and physical infrastructure to support streaming services.
Information Technology
Information technology (IT) is one of the broadest and most valuable sectors of the technology industry. It typically refers to how businesses store, transmit, and use information and data within and between networks of computers.
Semiconductor Technology
Semiconductors are arguably the foundation of all technology. Semiconductor companies make components found in phones, computers, and other electronic devices. The manufacturing process for semiconductors is incredibly precise and expensive, making the industry ruthlessly competitive.
Web 3.0
In recent years, cryptocurrency, blockchain technology, and Web 3.0 have been the focus of many investors. That’s because computer engineers and companies are now developing new technologies that will allow users to interact with the web in a more interactive, personal, and secure way. These new technologies, like blockchain, crypto, and the metaverse, may usher in new opportunities for investors.
💡 Recommended: Web 3.0 Guide for Beginners
Evaluating a Tech Stock Before Investing
When investing, you must carefully evaluate the stocks you’re interested in.
Technology companies, in particular, tend to have high price-to-earnings (P/E) ratios, meaning that the company’s profits may seem low compared to the price of their shares. This is often because investors are expecting rapid future growth.
Other key metrics include price-to-sales, which compares the stock price to the company’s revenue. This is something to consider in the case of a fast-growing company that doesn’t yet have substantial profits.
Another critical factor is the company’s overall revenue growth — the pace at which revenue increases year-over-year or even quarter-over-quarter.
A more detailed metric that can be useful for tech companies is “gross margins,” which is the difference between a company’s revenue or sales and the cost of generating those sales, divided by total revenue. The resulting percentage indicates whether the company can make money on the actual product it sells and how much. If the company’s other costs can go down as a percentage of total revenue, profits can grow more quickly.
💡 Recommended: The Ultimate List of Financial Ratios
Pros of Adding Tech Stocks to a Portfolio
There are many benefits to investing in tech stocks, most notably attractive returns. With artificial intelligence, blockchain, and Web 3.0 technologies on the horizon, there are increasing opportunities to invest in this sector. These are some possible benefits of adding tech stocks to a portfolio.
• There are many blue chip tech companies. Blue chip stocks typically refer to stocks from long-established companies with good returns. Today’s blue chips include huge tech companies like Apple, Alphabet, and Amazon.
• Some tech stocks pay dividends. There can be benefits to dividend-paying stocks, including consistent earnings, which might indicate that the company is positioned to deliver strong performance.
• Investors can buy shares in things they use. Most people use some tech in their daily routines. You might have a smartphone, or a laptop, hop on a social network, or order groceries or clothing online. With a tech stock, investors can buy a little piece of the companies they know and like.
• It’s easy to diversify in tech. Tech stocks aren’t a monolith. Investors can add diversity to their portfolio by purchasing different aspects of the tech sector, for example, buying stock in social media companies, smartphone glass manufacturers, hardware makers, software companies, and even green tech companies.
A great thing about the tech sector investing space is that there’s so much of it out there, and investors should be able to find something that works for their goals, ambition, and knowledge base.
💡 Recommended: How to Invest in Web 3.0 for Beginners
Cons of Investing in Technology
All stocks come with their own risks and potential downsides. Tech stocks are no different. As with any stock purchase, it’s helpful to do a good amount of research before buying a stock. Take these considerations into account before deciding to pull the trigger on a tech stock.
• The potential for tech backlash. Some experts think increased regulation and government scrutiny could lead to a backlash against tech stocks that could affect their prospects. They cite 2018’s passage of the European Union’s General Data Protection Regulation (GDPR) and Facebook’s hearings before Congress as evidence that even more regulation might be coming in the future. But like many other sectors of the stock market, various tech stocks react differently in the face of volatility.
• Buying what you know can be complicated. You might have a solid grasp on some social media giants, for example, but some of the nuances of emerging semiconductor firms might be a little harder to wrap your head around. You may have to ask yourself if you want to invest in a company that you might not fully understand.
• Stocks may be priced too high. Some tech companies, like Amazon and Google, often have shares that venture into the four figures, so for a first-time tech stock investor, those companies may feel out of reach. However, many tech companies occasionally engage in a stock split to decrease their share prices.
Do You See the Most Returns When Investing in Tech Stocks?
Most returns when investing in tech stock can vary depending on the specific company and the current market conditions. Nonetheless, many investors believe that tech stocks generally have a higher potential for growth than other types of stocks, making them a good choice for those looking to generate returns. During the past five years, technology stocks rose a total of 129.8%, while the broad S&P 500 Index grew by 60.2%.
But just because tech stocks have outperformed other industries, it doesn’t mean that it will always be that way. During 2022, for example, tech stocks have declined 22.7% through Aug., while the S&P 500 fell 16.8% year-to-date.
💡 Recommended: Lessons From the Dotcom Bubble
How Frequently Should You Invest in Tech Stocks?
The frequency you invest in tech stocks will depend on your individual investment goals and risk tolerance. Some investors may choose to trade tech stocks monthly or quarterly to take advantage of any short-term price fluctuations. Others may invest in tech stocks on a more long-term basis, holding onto their shares for several years to benefit from any potential long-term growth.
What Percentage of Your Portfolio Should Be Tech Stocks?
The percentage of a portfolio allocated to tech stocks differs for every investor. Some experts recommend that investors allocate no more than 20-30% of their investment portfolio to tech stocks, but this percentage may be higher or lower depending on the investor’s risk tolerance, investment goals, and other factors.
Mistakes to Avoid When Investing in Tech Stocks
Many investors are drawn to tech stocks because of the potential for a significant return. But the allure of large gains may cause investors to take on too much risk or lose sight of their overall investment goals.
For example, you don’t want to invest in a tech stock just because it’s popular. It’s easy to fear you are missing out when you see a particular stock’s price skyrocket. You may hear about a tech stock lot in the financial media, and you know many people who say they own it, but that doesn’t mean it’s a good investment.
Additionally, you should avoid investing in a stock just because the company is a household name. While sometimes the stocks of well-known companies do well, there are other cases of these companies not being well run and thus not being a good investment.
The Takeaway
The tech sector is vast and getting bigger by the moment as blockchain, artificial intelligence, and other technologies push boundaries. New founders are working on startups in garages and basements, potentially developing the next new thing that could change the world. Investors looking to invest in tech stocks can find a stock or ETF out there that could meet their needs. For instance, SoFi ETFs can remove some of the headache from picking individual stocks by allowing you to invest in a bundle of companies all at once.
SoFi makes it easy to invest in tech stocks and more with an online brokerage account. With the SoFi app, you can trade stocks, ETFs, and fractional shares with no commissions for as little as $5. You’ll also get real time investing news, curated content, and other relevant data for the stocks that matter most to you. For a limited time, funding an account gives you the opportunity to win up to $1,000 in the stock of your choice. All you have to do is open and fund a SoFi Invest account.
Get started trading technology stocks and ETFs with SoFi Invest® today
FAQ
Why is investing in tech stocks so popular?
Tech stocks are popular because they are some of the largest and best performing assets in the financial markets. As a whole, the technology sector is one of the fastest growing sectors in the economy. This means that there are a lot of new and innovative companies that are constantly coming out with new products and services. This provides investors with a lot of growth potential.
How can you start investing in tech stocks today?
You can start investing in tech stocks by trading individual stocks, invest in a tech-focused mutual fund or ETF, or invest in a more general stock market index fund that includes a mix of tech and non-tech companies.
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Shares of ETFs must be bought and sold at market price, which can vary significantly from the Fund’s net asset value (NAV). Investment returns are subject to market volatility and shares may be worth more or less their original value when redeemed. The diversification of an ETF will not protect against loss. An ETF may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.
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Want to know how to make $2,000? Here’s how you can make extra money online and offline. Whether you’re a stay-at-home parent looking to bring home more money or saving up for a large purchase, making $2,000 can make a big difference. In this post you’ll learn: Making an extra $2,000 can seem like a…
Want to know how to make $2,000? Here’s how you can make extra money online and offline. Whether you’re a stay-at-home parent looking to bring home more money or saving up for a large purchase, making $2,000 can make a big difference.
In this post you’ll learn:
Ways to make $2,000 fast
How to make $2,000 per day
How to make $2,000 online
Making an extra $2,000 can seem like a big goal, but it’s definitely achievable with the right approach. Whether you’re looking to pay off debt, save for a vacation, or just make more money, there are many ways to reach your goal.
How To Make $2,000 Fast
Here’s a list of ways to make $2,000.
1. Freelancing
If you have skills like writing, editing, programming, bookkeeping, digital marketing, data entry, SEO, graphic design, or transcribing, you can find jobs online. You can also find jobs if you know how to use software like Adobe, Canva, WordPress, or email marketing tools.
I recommend checking out UpWork to see which skills you have (you may be surprised to see what’s listed there) and start applying for jobs.
I’ve done quite a bit of freelancing and have found jobs on UpWork, Fiverr, and FlexJobs. This is a great way to make money since it’s flexible and usually done on your own schedule. There are many other freelance platforms as well!
Recommended reading: 16 Best Freelance Jobs & How To Get Started
2. Blogging
I started a blog back in college and it’s still one of my favorite ways to make semi-passive income. I currently make between $2,000-$4,000 a month on my blog and it’s entirely passive, meaning I no longer do any work on it.
There are tons of ways to make money blogging including affiliate partnerships, sponsored posts, ad revenue, and selling your own goods or services.
You can create your own blog here with this easy-to-use tutorial. Michelle also has a Free How To Start and Launch A Money-Making Blog Course you can join, and it will help you start and launch a successful blog! Once you start a blog, you can learn how to monetize it with affiliate income and sponsored posts.
You can learn how to start a blog with the free How To Start a Blog Course (sign up by clicking here).
3. Proofreading
If you have an eagle eye for detail, love finding spelling or punctuation errors, and want to learn how to make $2,000 online, you may want to become a proofreader. Working as a proofreader is generally quite flexible and you can work from anywhere in the world since your job is done from a computer.
You can find jobs proofreading for authors, law firms, blogs, and more. This is a great way to make a side hustle income or a full-time living as proofreaders can make around $50,000 a year.
Here is a FREE 7-day course just for people who want to stop wasting time and start making more money with their proofreading skills. I definitely recommend that you check it out.
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This free 76-minute workshop answers all of the most common questions about how to become a proofreader, and even talks about the 5 signs that proofreading could be a perfect fit for you.
4. Flip items for resale
You’ve likely seen TikToks where people flip stuff for profit. In case you don’t know what a flipper is, this is someone who buys something at a lower price and sells it at a higher price for a profit. This can also sometimes mean fixing up the item in order to sell it at a higher cost.
This is a great side hustle that can turn into a full-time job and is perfect if you want to know how to make $2,000 without a job (well, a traditional 9-5 job!).
A ton of people do this full-time!
This job is quite flexible because you can find stuff to flip on your own schedule. If you have kids, you can even take them along to garage sales and flea markets to score items to flip. This side hustle takes about 5-10 hours a week for beginners which can earn you up to $1,000 a month in the beginning.
Here is a free webinar, Turn Your Passion For Visiting Thrift Stores, Yard Sales & Flea Markets Into A Profitable Reselling Business In As Little As 14 Days, that will help you learn how to make money by flipping items as well.
5. Transcription
A transcriptionist is someone whose job is to turn files into text documents. You listen to what is being said in the file and type it into a text format. Transcriptionists usually make between $15-$30 an hour on average.
This job is flexible because you can choose to work part-time as a freelancer or full-time with an agency. As a transcriptionist, you must have good typing skills and a fast typing speed. You need excellent listening skills since you’re listening to files and having to type them up quickly.
A great free resource to take is FREE Workshop: Is a Career in Transcription Right for You? You’ll learn what transcription is and why it’s a highly in-demand skill, who hires transcriptionists, what it takes to become one, and more.
Recommended reading: 18 Best Online Transcription Jobs For Beginners
6. Pet sitting
One of my favorite side hustles is pet sitting. I’ve found all of my pet-sitting jobs on Rover, but you can also check out other dog-walking apps like Wag, Care.com, PetSitter, and more. Finding jobs can be hard at first if you don’t have experience, so it is usually important to set your rates lower than your competitors (this way you can get some reviews!).
Once you get jobs and reviews, you can slowly increase your rates and build your clientele. This is a great way to make a few hundred a week on top of a full-time job or other side hustles.
Recommended reading: 7 Best Dog Walking Apps To Make Extra Money
7. Sell crafts
If you have a hobby or craft you enjoy, you may want to try selling your items on Etsy. With almost 100,000,000 active Etsy buyers, Etsy is a great website to sell your handmade goods to people all around the world.
Here are some things you can sell on Etsy:
Printables
Stickers
Rugs
Soaps
Bath bombs
Crocheted and knitted items
Jewelry
I shop on Etsy all the time, and I love it!
Recommended reading: 16 Best Things To Sell On Etsy
Do you want to make money selling printables online? This free training will give you great ideas on what you can sell, how to get started, the costs, and how to make sales.
8. Virtual assistant
A virtual assistant is in charge of all kinds of tasks including:
Email management
Customer support
Graphic design
Social media management
I’m currently a virtual assistant and love it. The pay is high and I get to work on my own schedule. To find jobs, I recommend checking out UpWork, FlexJobs, and Fiverr. Type in “virtual assistant” on any of these job boards and you’ll quickly find tons of job listings with details including pay, benefits, work tasks, hours, and more.
9. Writing
If you have any kind of writing experience, try finding writing jobs online. There are thousands of online writing jobs out there from companies that need help creating blog posts and content for their company.
Even if you don’t have writing experience, I still recommend checking out job board sites and applying for low-paying jobs. This will get you experience as you build up your portfolio and help you land more jobs down the line.
I have been a freelance writer for years, and it’s a great way to make extra money. In fact, I’m writing this article as a freelancer!
10. Find Craigslist gigs for extra money
Craigslist is still quite popular in cities and there are always new jobs popping up. You’re most likely to find jobs in:
Labor (construction, warehouse work, landscaping)
Customer service (call centers)
Tutors
Short-term freelancing gigs
Moving
Always remember to be careful on any website, especially Craigslist. If anything ever feels suspicious or off, listen to your gut.
11. Delivering food
One of the easiest ways to make money is by delivering food with DoorDash. This is because they are always in need of new DoorDashers.
With DoorDash, your job is to deliver meals to customers. You can work on your own schedule and work as little or as many hours as you want to. Depending on where you live, you can deliver food by bike, scooter, or car.
How much you earn depends on each delivery, how much you earn in tips, and how fast you deliver items. The DoorDash app makes it convenient to accept delivery jobs, find out where to go, and how to get there.
12. Invest in real estate
Though it’s not a quick way to make money, you can make money in the long term by investing in real estate. When done right, real estate investing can be a lucrative way to make passive income and help diversify your investment portfolio.
There are many ways to invest in real estate including:
Buy REITs (real estate investment trusts)
Buy a house and flip for profit
Buy a house, live in one room, and rent out the rest of the rooms
Use an online real estate platform like Fundrise or Crowdstreet
Recommended reading: 23 Best Real Estate Side Hustles To Make Extra Money
13. Develop apps
There are a few ways to make money developing apps including in-app purchases, in-app subscriptions, advertising, affiliate links, and sponsorships.
You can test and research ideas that might do well in app form. Ask yourself what people need help with and how your app can solve their problems. Then, validate your idea by having people fill out a survey to get a better idea of what kind of app you should create.
You also need to figure out how you’ll market your app and get new customers. This might require you to reach out to blogs in your app’s niche, influencers, and media outlets to get coverage for your app.
Also, there is a side hustle related to this – you can test and try out new apps with Freecash. You can get paid from $1.00 to $75 per app. Some apps listed on Freecash (these numbers may change) include TikTok, which pays $8 if you’re a new user, and Upside, a gas cash back app, which currently pays $24.01 to new users. HBO pays $3.96 for new users subscribing to a free trial. There are many other apps you can earn from as well. Click here to sign up for Freecash (it’s free!).
14. Online surveys
Getting paid for surveys is not going to get you rich, but it’s an easy way to make money in your spare time. Companies pay people to fill out surveys because they need opinions on products and services. Once you finish filling out a survey, these survey sites typically pay you with cash, via PayPal, or gift cards.
Surveys aren’t full of hard questions that take hours to complete. The questions are usually short and straight to the point. Companies are trying to better their products and services, and surveys help them do this.
Here are some of the top surveys that pay in cash and free gift cards to sign up for:
Swagbucks
Survey Junkie
Branded Surveys
American Consumer Opinion
InboxDollars
Pinecone Research
Prize Rebel
User Interviews
Recommended reading: 21 Best Free Surveys That Pay Cash Instantly
15. Social media management
Working as a social media manager is a job that seems to be always hiring. I did a quick search on Fiverr and found many job listings pop up. This is because companies look to hire out for their social media management.
To find jobs in social media management, go to job boards like UpWork and type in “Social Media Management.” You’ll see posts from entrepreneurs and companies looking to hire a social media manager. These job listings will tell you what they need, like scheduling posts on Instagram and Facebook, creating visuals using Canva, and responding to comments from followers.
16. Babysitting
One of the easiest and quickest ways to make money is babysitting. I’ve found all of my babysitting and nannying jobs on Care.com, but you can also check out SitterCity, UrbanSitter, or Babysits. People are always looking for babysitters for date nights, errands, and special events.
To increase your chances of landing jobs, make sure to get a background check on the website (Care.com has this option) as this will make you stand out from other candidates. If you have previous experience babysitting, ask for references so hiring parents can see that you’re a good candidate for their job listing.
17. Bookkeeping
Becoming a bookkeeper can be a great way to learn how to make $2,000 from home.
A bookkeeper is someone whose job is to maintain clean and organized financial records for a business. Some tasks can include sending invoices on your client’s behalf, running payroll for your clients and their team, preparing state tax filings, and helping the client make business decisions for future expenses.
A bookkeeper’s income can vary depending on how many clients they have, how much experience they have, and how much they charge. On the low end, bookkeepers can earn $2,000 a month, while on the high end bookkeepers can earn $16,000 a month. Bookkeepers are in demand. According to the Department of Labor and Statistics, about 200,000 new jobs open in the US for bookkeepers each year.
Here is a free training – How to start a profitable bookkeeping side hustle, that can generate $2,000 to $16,000 a month (part-time)!
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This free training will show you how to start a profitable bookkeeping side-hustle in the next 30 days—even if you have no prior experience!
18. Online tutoring
An online tutor is a teacher or expert who helps someone in a particular subject through the internet. This is done through video calls on a computer. Online tutors can make between $15 an hour to well over $100 an hour. Tutors are most often in needed in subjects like math, science, and foreign languages.
Many sites are hiring online tutors such as Tutor.com, Varsity Tutors, and Outschool.
19. Sell old electronics
Before throwing away your old electronics, consider selling them or trading them in.
Best Buy and Amazon both have trade-in programs and many other places are always looking to buy electronics. Electronics that are most easy to sell include smartphones, tablets, laptops, gaming consoles, smartwatches, digital cameras, and e-readers like Kindles.
You can sell electronics on sites like:
Decluttr
Facebook Marketplace
eBay
Gazelle
If you want to learn how to make $2,000 in 3 days, I usually recommend finding stuff to sell!
20. Photography
There are many ways to make money with photography including freelance photography, portraits, real estate, and product photography. You can also sell your photos to stock agencies like Shutterstock or Unsplash if you want to run an online business that makes $2,000.
To get started selling your photography, build an online portfolio of your work. This is going to help you attract new clients and customers. Always keep your customers satisfied and happy as word of mouth makes a big difference in the photography business.
It’s important to market your services on social media and have a professional website so people can get in contact with you easily.
Recommended reading: 18 Ways To Get Paid To Take Pictures
21. Rent a room
If you have a spare bedroom you’re not using, renting out that spare room is an easy and convenient way to make extra income.
It’s important to do a few things including cleaning and decluttering the room, researching market rates, taking high-quality, well-lit images of the room, and checking local laws to see if it’s legal to rent out a room where you live.
You can potentially rent out your room short-term on sites like Airbnb or find someone who is looking for a room for the long-term. If you find someone renting out a room for the long-term, it’s important to get a security deposit, a contract in place, and references from the renter.
My sister (the owner of this site) has rented out spare rooms in the past, even to me!
22. Rent your car
Renting your car can be a great way to earn extra income, especially if you’re not driving it that often.
First, you’ll want to check with your insurance to see if you’re allowed to rent out your vehicle. You’ll also need to see if you need a special license to rent your car. Once you have those things dialed down, choose a rental platform.
There are many platforms including Turo, GetAroundUSA, and HyreCar.
23. Work overtime
Working overtime is one of the best ways to make the most money. This is because employers usually pay a higher hourly wage for overtime hours. There are tons of jobs that pay extra for overtime including working as a plumber, pilot, home health aid, electrician, automotive technician, and so many other jobs.
Frequently Asked Questions
Below are answers to common questions about how to make $2,000.
How to make $2,000 in passive income?
There are many ways to make $2,000 in passive such as blogging (via affiliate marketing or ad revenue), selling crafts like printables on Etsy, investing in real estate, and renting out your room or car.
How to make $2,000 a week online?
To make $2,000 a week, you need to make about $285 a day. Breaking it down this way makes the number seem less daunting and more achievable. To make $2,000 a week, you’d need to pick up quite a few freelancing or Craigslist gigs, flip high-profit items, or rent out a room on Airbnb or your car on Turo. Doing multiple things will increase your odds of making $2,000 a week online.
How to make $2,000 per day?
Making $2,000 per day is going to require a lot of work and even then it’s not always possible. After all, $2,000 a day would be $60,000 each month! Working gigs won’t be enough and instead, you’ll have to get lucky by flipping a high-profit item (like real estate) or starting your own business.
How to make $2,000 online?
There are many ways to make $2,000 online, such as with freelancing gigs, blogging, virtual assisting, social media management, and selling crafts on Etsy.
Best ways to make $2,000 – Summary
I hope you enjoyed this article on the best ways to make $2,000 fast.
Making $2,000 can seem tough at first, but once you start trying out different side hustles and get into a groove, making extra cash gets easier.
You don’t have to pay capital gains tax on investment profits while they are held in a traditional or a Roth IRA account. In most cases, the question of taxes comes into play when you withdraw money from a traditional or Roth IRA.
Each type of IRA is subject to a different set of tax rules, and it’s essential to know how these accounts work, as the tax implications are significant now as well as in the future.
IRAs, Explained
An Individual Retirement Account (IRA) is a tax-advantaged account typically used for retirement savings. There are two main types of IRAs — traditional IRAs and Roth IRAs — and the tax advantages of each are quite distinct.
Generally speaking, all IRAs are subject to contribution limits and withdrawal rules, but Roth IRAs have strict income caps as well as other restrictions.
Contribution Limits
For tax year 2024, the annual contribution limits for both Roth and traditional IRAs is $7,000, and $8,000 for those 50 or older.
It’s important to know that you can only contribute earned income to an IRA; earned income refers to taxable income like wages, tips, commissions. If you earn less than the contribution limit, you can only deposit up to the amount of money you made that year.
One exception is in the case of a spousal IRA, where the working spouse can contribute to an IRA on behalf of a spouse who doesn’t have earned income. Like ordinary IRAs, spousal IRAs can be traditional or Roth in style.
Traditional IRAs
All IRAs are tax advantaged in some way. When you invest in a traditional IRA, you may be able to take a tax deduction for the amount you contribute in the tax year that you make the contribution.
The contributions you make may be fully or partially tax-deductible, depending on whether you or your spouse are covered by a workplace retirement plan. If you’re not sure, you may want to check IRS.gov for details.
The money inside the account grows tax-deferred, meaning any capital appreciation of those funds is not subject to investment taxes, i.e. capital gains tax, while held in the account over time. But starting at age 59 ½ , qualified withdrawals are taxed at regular income tax rates.
If you think about it, this makes sense because you make contributions to a traditional IRA on a pre-tax basis. When you take withdrawals, you then owe income tax on the contributions and any earnings.
With some exceptions, early withdrawals from a traditional IRA prior to age 59 ½ are subject to income tax and a 10% penalty.
Recommended: IRA Tax Deduction Rules
Roth IRAs
Roth IRAs follow a different set of rules. You contribute to a Roth IRA with after-tax money. That means you won’t get a tax deduction for contributions you make in the year that you contribute.
Your contributions grow inside your Roth IRA tax-free, along with any earnings. When you reach retirement age and start to make withdrawals, you won’t owe income tax on money you withdraw because you already paid tax on the principal (i.e. your original contribution amounts) — and the earnings are not taxed on qualified withdrawals.
Boost your retirement contributions with a 1% match.
SoFi IRAs now get a 1% match on every dollar you deposit, up to the annual contribution limits. Open an account today and get started.
Only offers made via ACH are eligible for the match. ACATs, wires, and rollovers are not included.
What Are Capital Gains Taxes?
Capital gains refer to investment profits. In a taxable investment account you would owe capital gains tax on the profits you made from selling investments: e.g., stocks, bonds, real estate, and so on.
You don’t owe capital gains tax just for owning these assets — it only applies if you profit from selling them. Depending on how long you held an investment before you sold it, you would owe short- or long-term capital gains.
Retirement accounts, however, are subject to their own set of tax rules, and traditional and Roth IRAs each handle capital gains taxes differently.
Are Gains Taxed in Traditional IRAs?
Traditional IRA plans, as noted above, are tax-deferred, which essentially means that investment profits are not subject to capital gains tax while they remain in the account. Given this, the sale of individual investments like stocks inside an IRA is not considered a taxable event.
However, with tax-deferred accounts like traditional IRAs, you do have to pay ordinary income tax on withdrawals (meaning, you’re taxed at your marginal income rate).
So when you take withdrawals from a traditional IRA, you will owe income tax on the amount you withdraw, including any investment gains (i.e., earnings) in the account.
Are Gains Taxed in Roth IRAs?
The same principle applies to Roth IRAs, even though these are after-tax accounts: You don’t have to pay taxes on investment income or any assets that you buy or sell inside your Roth IRA.
Because you contribute to a Roth IRA with after-tax money, your money grows tax-free inside your IRA. Also, the earnings in the account grow tax-free over time and those gains are not taxed within the account.
In addition, qualified withdrawals of contributions and earnings from a Roth IRA are tax free. But remember: early or non-qualified withdrawal of earnings from a Roth IRA would be subject to taxes and a penalty (with some exceptions; for details see IRS.gov).
Roth IRA Penalties
Because you contribute to a Roth IRA with after-tax money, you can always withdraw your contributions (meaning your principal) without paying any tax or penalties.
If you wait to withdraw money from your Roth IRA until you reach age 59 ½, you can also withdraw your earnings without tax or penalties — as long as you’ve had the account for at least five years.
If you withdraw Roth IRA earnings before age 59 ½ or before you’ve held the account for five years, you may be charged a 10% early withdrawal penalty, though there are IRA withdrawal rules that may help you avoid the penalty in certain situations.
Are Gains Taxed in 401(k)s?
An IRA and a 401(k) work in a similar way when it comes to capital gains tax. Just as there are traditional and Roth IRAs, there are also traditional and “designated” Roth 401(k) plans, and they work similarly to their corresponding IRA equivalents.
So, generally speaking, you do not owe any capital gains tax on the sale of any investments held inside either type of 401(k) account.
Opening an IRA With SoFi
Most people are familiar with the basic tax advantages of using an IRA to save for retirement. Traditional IRAs are tax-deferred accounts and may provide a tax deduction in the years you make contributions. Roth IRAs are after-tax accounts that can provide tax-free income in retirement.
But the fact that you don’t have to pay capital gains tax is also worth noting. With both a traditional IRA and a Roth IRA, buying and selling stocks or other investments is not considered a taxable event. That means that you will not owe capital gains tax when you sell investments inside your IRA.
Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
Help grow your nest egg with a SoFi IRA.
FAQ
Are Roth IRAs subject to capital gains tax?
No, buying and selling stocks or other investments inside a Roth IRA is not considered a taxable event. This means that you will not owe capital gains tax for buying or selling investments inside your Roth IRA. And because contributions to Roth IRAs are made with after-tax money, you also won’t owe income tax on qualified withdrawals.
Do you have to pay taxes if you sell stocks in a Roth IRA?
Selling stocks inside a Roth IRA is not considered a taxable event. So whether you regularly buy and sell stocks inside your Roth IRA, or just have unrealized gains and losses, you won’t need to worry about capital gains tax.
What happens when you sell a stock in your Roth IRA?
Buying and selling stocks inside an IRA is not considered a taxable event. So you won’t owe capital gains tax on stock you sell, but you also won’t be able to offset gains with a loss you capture from a stock sale inside your IRA.
Photo credit: iStock/designer491
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