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June 18, 2024 at 6:17 AM
Daily mortgage rates for Tuesday, June 18, 2024 (mohd izzuan via Getty Images)
Average mortgage rates continue sliding lower for popular 30-year and 15-year terms as of Tuesday, June 18, 2024.
The current average interest rate for a 30-year fixed mortgage is 7.02% for purchase and 6.96% for refinance, down 10 basis points from 7.12% for purchase and 19 basis points from 7.15% for refinance last Tuesday. For homeowners looking to refinance to a 15-year term, the average rate is 6.49% — down 22 basis points from 6.71% over the past week. The average rate on a 30-year fixed jumbo mortgage is 7.17%.
Mortgage rates for Tuesday, June 18, 2024
30-year fixed rate — 7.02%
20-year fixed rate — 6.76%
15-year fixed rate — 6.43%
10-year fixed rate — 6.31%
5/1 adjustable rate mortgage — 6.69%
30-year fixed FHA rate — 6.86%
30-year fixed VA rate — 7.02%
30-year fixed jumbo rate — 7.17%
Mortgage rates for Tuesday, June 18, 2024
30-year fixed rate — 6.96%
20-year fixed rate — 6.77%
15-year fixed rate — 6.49%
10-year fixed rate — 6.32%
5/1 adjustable rate mortgage — 6.56%
30-year fixed FHA rate — 6.99%
30-year fixed VA rate — 7.62%
30-year fixed jumbo rate — 7.08%
Freddie Mac weekly mortgage report: Rates continue falling back
Freddie Mac reports an average 6.95% for a 30-year fixed-rate mortgage, down 4 basis points from last week’s average 6.99% for a 30-year fixed-rate mortgage, according to its weekly Prime Mortgage Market Survey of nationwide lenders published on June 13, 2024. The fixed rate for a 15-year mortgage is 6.17%, down 12 basis points from last week’s average 6.29%. These figures are higher than a year ago, when rates averaged 6.69% for a 30-year term and 6.10% for a 15-year term.
“Mortgage rates continued to fall back this week as incoming data suggests the economy is cooling to a more sustainable level of growth,” says Sam Khater, Freddie Mac’s chief economist, of the latest data. “Top-line inflation numbers were flat but shelter inflation, which measures rent and homeownership costs, increased, showing that housing affordability continues to be an ongoing impediment for buyers on the house hunt.”
Freddie Mac updates its Prime Mortgage Market Survey data weekly on Thursday mornings.
Mortgage rates for June 18, 2024
Mortgage rates are determined by many factors that include inflation rates, economic conditions, housing market trends and the Federal Reserve’s target interest rate. Lenders also consider your personal credit score, the amount available for your down payment, the property you’re interested in and other terms of the loan you’re requesting, like 30-year or 15-year offers.
Because mortgage rates can fluctuate daily, it’s best to lock in a rate when you’re comfortable with the overall conditions of your mortgage or home loan.
Mortgage rates in the news
Mortgage lenders keep a close eye on the benchmark federal funds target interest rate set by the Federal Reserve, the U.S.’s central bank. Called the Fed rate, it’s the benchmark that affects rates on deposit accounts, loans and other financial products. Typically, as the fed rate rises, so do APYs on savings products like CDs, high-yield savings accounts and money market accounts. Mortgage and home loan rates don’t follow the Fed rate as closely, but they do reflect the same elements the Fed evaluates when making decisions on the benchmark — especially inflation — which means as the Fed rate increases, mortgage rates also tend to rise.
The Federal Reserve increased the target interest rate 11 times from March 2022 to July 2023 in an effort to combat the highest inflation in four decades coming out of the pandemic.
June 12, 2024: Fed holds benchmark rate unchanged for seventh time since July 2023
At the conclusion of its fourth rate-setting policy meeting of 2024 on June 12, 2024, the Federal Reserve kept the federal funds target interest rate steady at a 23-year high of 5.25% to 5.50%, marking the seventh consecutive time the Fed’s held the benchmark rate unchanged since July 2023.
In its post-meeting statement, the Federal Reserve acknowledged “there has been modest further progress toward the Committee’s 2 percent inflation objective,” but also that the “economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.”
The Federal Reserve is focused on a 2% inflation goal that’s ideal for keeping employment high and prices low. Despite speculation in March of three rate cuts by the end of the year, the Fed reiterated from its May statement that its rate-setting committee “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”
Officials now estimate one rate cut this year with an additional four cuts anticipated in 2025.
What to expect at the Fed’s July policy meeting
It’s too early to predict what the Federal Reserve will decide at its next policy meeting on July 30 and July 31, 2024, though officials have signaled a cut to the key interest rate later this year.
Inflation appears to be cooling, falling from a peak of 9.1% in June 2022 to rates that have ranged from 3% and 4% since May 2023. The Consumer Price Index released on June 12 revealed consumer prices rose 3.3% year over year, unchanged from 3.3% in April, which was celebrated as “unequivocally good” by economists and puts pressure on the Fed’s timetable for rate cuts. Producer Price Index data released on June 13 reports a 0.2% increase in wholesale prices — or the prices manufacturers pay to producers of goods and services — from April’s 0.5% increase, adding evidence to cooling inflation.
Adding to the good news is the June 7 jobs report that showed a surge in hiring, with employers adding 272,000 jobs in May — higher than the 175,000 positions added in March.
When asked at a post-meeting press conference whether new inflation data changes the timeline on rate cuts, Federal Reserve Chair Jerome Powell said while it’s “plausible” a cut could come as early as September, “We want to gain further confidence. Certainly, more good inflation readings will help with that.”
The Powell-led rate-setting panel will announce a rate decision at the conclusion of its meeting on July 31 at 2 p.m. ET.
NAR settlement offers ray of hope to summer homebuyers
While high mortgage rates could convince current homeowners to delay selling their properties, resulting in low housing inventory, a major change in the way Americans buy and sell homes may offer a ray of sunshine to prospective homebuyers. On April 23, a judge granted preliminary approval to a $418 million antitrust settlement with the National Association of Realtors that ends customary real estate broker commissions of up to 6% of a home’s purchase price starting in July. The settlement isn’t expected to affect mortgage rates, yet it paves the way for consumers to negotiate what they pay for an agent’s services, saving homebuyers money in the long run.
Dig deeper: When’s the next Federal Reserve meeting? The FOMC — and how it affects your finances
4 top factors that affect your mortgage rate
The difference of even half a percentage point on your interest rate can save you hundreds of dollars a month and thousands of dollars over the life of your mortgage, but the mortgage rate you’re ultimately offered depends on the mortgage you’re interested in, payments you’re willing to pay up front and your overall financial health.
Your credit score. Knowing your credit score can help you shop around for lenders you’re likely to get approval through, as well as understand the type of mortgage for your lifestyle and income. The best mortgage rates go to borrowers with good to excellent credit — typically a FICO credit score of at least 670 — though even with fair credit, you may be able to find a mortgage offering decent rates.
Your down payment. The more money you can put down toward your home, the better it benefits your interest rate. Paying at least 20% of your home’s purchase price up front generally results in a lower interest rate — and you can avoid mortgage insurance, which increases your total cost.
Your loan term. While the 30-year mortgage remains a popular way for Americans to purchase homes, you can find terms of 20 years, 15 years and 10 years. Shorter loan terms usually come with lower interest rates, though with higher monthly payments. Longer mortgage terms can result in smaller monthly payments, though you’ll pay higher total interest over the life of your loan.
Interest rate type. Mortgage rates come with two basic types of rates — fixed and variable. Fixed-rate mortgages offer a consistent interest rate over the life of your loan, whereas adjustable-rate mortgages (ARMs) often start with a lower fixed rate for an agreed-on time and then adjust to a variable rate based on market conditions for the remainder of your term. Choosing between these two rates depends on your financial goals and tolerance for risk.
Frequently asked questions about mortgage rates
What are mortgage lenders?
Lenders are financial institutions that loan money to homebuyers. A lender is different from a loan servicer, which typically handles the operational tasks of your loan, like processing payments, talking directly with borrowers and sending monthly statements.
What does it mean to refinance a mortgage?
Refinancing is a process of trading in your current mortgage to another lender for lower rates and better terms than your current loan. With a refinance, the new lender pays off your old mortgage and you then pay your monthly statements from the new lender.
What is an adjustable-rate mortgage?
An adjustable-rate mortgage — commonly called an ARM — is a type of home loan with a variable rate. Unlike a fixed-rate mortgage, which locks in an interest rate and predictable payments that apply over the full loan term, an ARM starts at an initial fixed rate for a period of three years or longer, after which it adjusts to a higher rate and then further adjusts periodically over the remaining life of the loan.
For a 5/1 adjustable-rate mortgage, the first number indicates the number of years at the fixed rate — or five years — and the second number indicates the rate at which the mortgage rate readjusts after — in this case, each year or annually.
Why are mortgage rates so high?
Mortgage rates are influenced by complicated factors like inflation, employment rates, the bond market and the overall economy. While the Federal Reserve doesn’t set mortgage rates, this central bank of the U.S. sets benchmark rates that indirectly affect rates on financial products like mortgages, personal loans and deposit accounts.
March inflation data came in higher than expectations, which is among the main concerns driving mortgage rates higher in April.
Can I negotiate my mortgage rate?
It’s not likely — lenders consider the market conditions and other financial factors when determining rates. You can, however, ask about how you can reduce costs in other ways when comparing mortgage lenders. For instance, many lenders offer lower rates in exchange for “mortgage points” — upfront fees you pay to your lender. A mortgage point could cost 1% of your mortgage amount, which means about $5,000 on a $500,000 home loan, with each point lowering your interest rate by about 0.25%, depending on your lender and loan.
Editor’s note: Rates shown are as of Tuesday, June 18, 2024, at 6:15 a.m. ET. APYs and promotional rates for some products can vary by region and are subject to change.
Sources
Primary Mortgage Market Survey, Freddie Mac. Accessed June 14, 2024.
Employment Situation Summary, U.S. Bureau of Labor and Statistics. Accessed June 7, 2024.
Consumer Price Index Summary, U.S. Bureau of Labor and Statistics. Accessed June 12, 2024.
Producer Price Index News Release summary, U.S. Bureau of Labor and Statistics. Accessed June 13, 2024.
Mortgage Industry Insights, Bankrate. Accessed June 18, 2024.
In this post on the hidden costs of solar, I want to share some eye-opening experiences with solar systems and their often-overlooked costs. If you’re considering adding solar to your home, or you’re dealing with a property that has solar panels, this information could save you a lot of headaches and money. I have bought many houses with solar and I have run into many issues that many people have no idea about.
Table of Contents
Video: The Hidden Costs of Solar
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The Foreclosure Solar Fiasco
Recently, I bought a foreclosure property at an auction. The winning bid was $249,000, which was lower than expected, possibly because the house had a solar system. Here’s where things got tricky. The title company refused to insure the house due to a $38,000 lien on the solar system. The previous owners owed this amount, and the lien survived the foreclosure.
This almost cost me the deal and my $122,000 earnest money deposit. Thankfully, my title company confirmed that the lien was against the equipment, not the property. So, the solar company could technically reclaim their equipment, which was fine by me as long as I kept the house.
How to buy a foreclosure
The Hidden Costs of Solar Systems
Many people think solar systems are a great deal because they reduce electricity bills. However, these systems are not free. You’re often taking on significant debt that affects your debt-to-income ratio, making it harder to buy another house. If the system is leased, the new buyer might have to qualify for the lease, or you might need to pay off the system before selling the house. In my case, this amounted to nearly $40,000.
Replacing Roofs with Solar Panels
In another deal, I had to replace the roof on a house flip. The house had solar panels, and removing and reinstalling them cost an additional $5,000. This wasn’t covered by insurance, which only added to the overall expense. Furthermore, insurance premiums might increase due to the extra cost associated with solar panel maintenance.
Solar Makes Selling Difficult
I’ve come across several interesting stories involving solar panels. For instance, a property listed for sale had a $99,500 lease transfer fee for the solar system. This fee could deter potential buyers and complicate the sale.
On other deals, the buyers needed to qualify for both the home loan and to take over the solar panel lease. While they were able to qualify for the house, they weren’t able to also qualify for the solar lease. Both together pushed above their limits. In these cases, either the seller needs to pay off the solar panels completely or the buyer needs to terminate.
Ultimately, when there’s a solar lease, the buyer’s “buying power” is reduced by the amount of the lease, which can be very substantial. In many cases, buyers will quickly learn they can get much more house for their money by avoiding ones with solar panels.
If you’re looking to add value to your house, instead of going solar, see my article: What Remodel Projects Add the Most Value to a House?
Key Takeaways for Homeowners
It’s Not Free: Understand that installing solar panels often means taking on significant debt. This debt doesn’t disappear if you sell the house or face foreclosure.
Potential Selling Issues: If the solar system is leased, the new buyer might need to qualify for the lease, or you might have to pay it off before selling.
Higher Insurance Costs: Solar panels can increase your insurance premiums and might not be fully covered in case of damage.
Hidden Fees: Be aware of possible lease transfer fees, which can be prohibitively expensive.
Maintenance Costs: Replacing roofs or dealing with panel damage can incur additional costs.
Due Diligence: Always ask about the potential implications of selling or refinancing a house with solar panels.
If you’re thinking about installing solar panels or buying a house with them, make sure you understand all the potential costs and complications. The savings on your electricity bill might not be worth the financial headaches.
What’s your experience with solar panels?
Let me know in the comments below. And don’t hesitate to ask any questions.
Looking for the best places to sell a wedding dress? If you want to sell your wedding dress online or near you, you have options! As wedding costs continue to rise, an easy way to make some extra money back is by selling your wedding dress. With the average wedding dress in the U.S. costing…
Looking for the best places to sell a wedding dress? If you want to sell your wedding dress online or near you, you have options!
As wedding costs continue to rise, an easy way to make some extra money back is by selling your wedding dress. With the average wedding dress in the U.S. costing a bride $1,800, selling your dress to recoup some money back makes sense.
If you’re looking to sell your wedding dress, you’ve come to the right place.
In today’s article, I’ll teach you:
How to sell your wedding dress
Where you can sell your wedding dress
If it’s better to sell your dress online or in person
Tips for getting the most money for your wedding dress
Recommended reading: How To Sell An Engagement Ring For The Most Money
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This free workshop will teach you how to get into the flipping business. It will teach you how to resell furniture, electronics, appliances, and anything else you can find.
Why you should sell your used wedding dress
There are many reasons to part ways with your wedding dress including:
Recovering a portion of your wedding costs, which can be put toward a vacation or financial goals
Environmental benefits as this reduces waste and encourages reuse of things already made
Helping another bride afford a beautiful gown
Declutter your home and free up space
For many people, your wedding dress just sits in a closet for years. Instead, you may be able to free up some space and make some extra money by selling your wedding dress.
Are used wedding dresses worth anything?
Used wedding dresses are worth some cash, especially if your wedding gown is expensive and made of high-quality materials and craftsmanship.
Wedding dresses are often made to retain their beauty and integrity. Since these dresses are only worn once, brides see these dresses as a cheaper gown option.
Is your wedding dress from a well-known designer like Vera Wang, Oscar de la Renta, Monique Lhuillier, or Carolina Herrera? If so, your dress likely holds substantial resale value. These designer dresses are highly desired by brides who dream of a designer gown on a budget.
But, affordable dresses are worth something too! People buy used wedding dresses all the time, whether they are $50 or $5,000.
This is a great way to sell your stuff for cash!
Best Places To Sell A Wedding Dress
Here’s a list of the 10 best places to sell your wedding dress.
Recommended reading: 16 Best Places To Sell Clothes For Cash
1. Poshmark
Poshmark is a website for buying and selling secondhand items in the clothing, home decor, and beauty space. This online platform has a large customer base, helping you reach someone looking for wedding dresses.
Listing items on Poshmark is incredibly easy and convenient and can be done directly from your phone. Write a clear and descriptive title like ‘Vera Wang Lace Dress Size 8’ and a detailed description including things like brand, size, condition, details, and price. You can use relevant tags like “wedding dress” and the designer’s name to help the dress get seen by more people.
Poshmark provides a prepaid shipping label once the item is sold, and it’s your responsibility to properly package the dress so it gets to the buyer in excellent condition.
Selling on Poshmark does have fees since you are using their platform. For sales under $15, Poshmark takes a flat commission rate of $2.95. For sales over $15, you keep 80% of your sale and Poshmark’s commission is 20%.
2. eBay
Posting your wedding dress on eBay works similarly to Poshmark and you’ll reach international buyers. With eBay, you can choose to list your dress as an auction or at a fixed “Buy It Now” price. There’s also an option to accept offers which allows you to negotiate.
If you want extra help selling your wedding dress, you can promote your listings on eBay for an extra cost which will help your dress appear higher in search results.
eBay charges a fee when your item sells. For clothing, the fee is 12.9% of the total sale amount, including shipping, plus $0.30 per order. If you sell an item over $7,500, the final value fee is 12.9% of the first $7,500 total sale amount, plus 2.35% of the portion of the sale over $7,5000.
3. Still White
Still White is the world’s largest online marketplace for wedding dresses. They’ve sold over $97,000,000 in wedding dresses, making it one of the best places to sell your dress.
This is a great place to sell your wedding dress since brides are actively coming to this site to look for their dresses. Still White operates globally, meaning your dress can reach a large audience, helping you sell your wedding dress faster.
If you’re wondering how much you can potentially get for your wedding dress, Still White’s sell page has an estimate section where you put the designer, year, and condition of the dress, and get an idea for how much you can make.
For example, I entered my sister’s wedding dress into their estimator, and it said she could earn around $700 from her dress. Her dress is exactly 10 years old, too!
Still White charges a one-time listing fee of $20 and a premium option of $30, which includes added features like a featured listing. They do not take a commission on top of the listing fee. This platform also allows you to upload videos of the dress, which helps a buyer on the fence make a purchase quicker.
4. Nearly Newlywed
Nearly Newlywed is an online marketplace for selling new, sample, and used wedding dresses. This is a site where brides can come to find great deals and discounted prices on gowns.
To sell your gown on Nearly Newlywed, you submit your wedding dress through an online form. You’ll share details like the designer, size, condition, and photos of your wedding dress.
The Nearly Newlywed team reviews your submission to ensure it meets their criteria for dresses on their website. The listing fee for sellers is typically $20 with a 30%-40% commission fee once the dress is sold. This is much higher than other platforms, so keep this in mind. Nearly Newlywed also has a minimum list price of $375.
5. Vestiaire Collective
Vestiaire Collective is an online platform that specializes in buying and selling pre-owned luxury items. This platform has experts on staff to authenticate items so people know they’re getting the real thing. So, if your wedding dress is from a well-known designer, this may be the place to sell your dress.
This is how Vestiaire Collective works: You get started by taking pictures of your wedding dress, listing it, and they’ll recommend a price for you. Vestiaire Collective gives you a prepaid shipping label for you and is known to have the lowest selling fees on over 4,000 brands. This platform will find buyers for you and alert buyers to your item. Sales are final so you don’t have to worry about anyone returning your wedding dress.
6. Wedding Bee
Wedding Bee is a website primarily for wedding planning and inspiration. The platform has forums, articles, photo galleries, and vendor listings to get inspiration for your wedding. You can hear from other brides who already got married and learn DIY tips, ideas, vendor lists, and discussions on wedding-related topics.
While there’s not a specific part of the website for selling your wedding dress, you can browse forums to see if people are looking for used wedding dresses. You can share links to your wedding dress for people who are interested in buying a gown at a reduced price.
7. Craigslist
If you want to sell your wedding dress locally, Craigslist is a good option. Craigslist makes it easy to reach local buyers and sell to people in your city. This limits your pool of targeted buyers, but can potentially lead to a faster sale if you’re in wedding season and people are actively looking for a dress.
Selling on Craigslist is easy. It’s important to take high-quality, well-lit pictures of your wedding dress and even include pictures from your wedding day. Write a detailed description of your wedding dress including condition, size, designer, and any special features of the dress.
Make sure to meet the buyer in a public, well-lit, and safe location like a police station parking lot, mall, or coffee shop. Tell a friend you’re meeting a potential buyer and keep your friend or family member updated on how it’s going.
8. Local consignment shop
If you want a more hands-off approach and want someone else to handle the sale of your wedding dress, I recommend going to a local consignment shop near you.
Consignment shops handle the entire sale process for you, from marketing your dress to answering questions from potential buyers. Some consignment shops even specialize in selling preowned wedding dresses, so they can provide guidance on selling price and what to do to sell your wedding dress quickly.
Keep in mind that consignment shops do take a percentage of the profit since they are doing most of the hard work. However, this might not matter to you if you don’t want to spend time working on selling the dress. Working with a consignment store is also a great option if you’re trying to declutter space in your home and don’t want to communicate with buyers.
9. Preownedweddingdresses.com
Preownedweddingdresses.com is an online platform that sells new, used, and sample wedding dresses. To list your wedding dress on Preownedweddingdresses.com, there is a $25 one-time listing fee and they take 20% of the gross sale price. Free shipping and insurance are included and there’s a seller protection program as well. Besides wedding dresses, you can also sell your jewelry and other bridal accessories.
This online platform has bridal experts on staff to help you throughout the selling process. They’ll walk you step by step through listing your wedding dress, the actual sale, and the shipping process. Their experts also act as a mediator between you and the customer if any issues arise with your buyer.
10. Facebook Marketplace
Facebook Marketplace is a helpful online platform for selling and buying all kinds of things, including wedding dresses. You can reach people locally and all over the country, and you probably already have a Facebook account anyway, so it’s easy to start using.
When listing your wedding dress on Facebook Marketplace, make sure to include plenty of details in the description as this will help when people are searching for your dress. Add keywords to the description such as the designer of the dress, dress size, and any other special details to the dress like lace, open back, etc.
There can be scams on Facebook Marketplace, so take a few steps to protect yourself. Avoid wire transfers or prepaid credit cards and opt for safer payment methods like PayPal. Meet in a safe location that is well-lit and public. Trust your instincts. If something doesn’t feel right with the potential buyer, move on and find someone else to buy your wedding dress.
FAQ: Best Places To Sell Wedding Dresses
Below are answers to common questions about the best places to sell wedding dresses.
What is the best way to sell a wedding dress?
There are things you can do to help sell your wedding dress quickly and get the most money.
Use online marketplaces specifically geared to selling used wedding dresses. This includes sites like preownedweddingdresses.com and stillwhite.com. These sites are set up and ready for new brides looking for used dresses, and past brides looking to sell their dresses. You’ll get a targeted audience looking for used wedding dresses unlike Facebook Marketplace and Posh.
Take high-quality photos of your dress from multiple angles. Make sure to include close-ups of any fine details like lace, embroidery, or beading. It’s also a good idea to include photos of your wedding day wearing the dress, so potential buyers can see what it looks like on a body instead of a hanger. Provide measurements and respond to inquiries about your dress quickly.
Will a pawn shop buy my wedding dress?
Some pawn shops may buy your wedding dress, but this isn’t all that common. Pawn shops typically focus on items with larger resale markets like electronics, jewelry, and tools. Also, pawn shops have to make a profit so you might get significantly less than what you’d get on a used wedding dress site that resells dresses.
Can I sell my wedding dress to David’s Bridal?
David’s Bridal focuses on selling new inventory and does not sell used dresses. However, there is a Facebook group called David’s Bridal Resale with over 30,000 members. This group is specifically for reselling David’s Bridal items.
What is the best place to sell a wedding dress near me?
The best place to sell your wedding dress depends on where you live and your preferences. Generally, selling your wedding dress online will offer the most money. While local shops can provide a hands-on approach, online platforms like stillwhite.com and preownedweddingdresses.com are reaching people who want to buy used dresses.
Is it better to sell a used wedding dress in person or online?
Selling a wedding dress in person vs. online has its pros and cons. Selling online has benefits like a larger audience actively looking for a wedding dress with detailed listings and communication tools set up to get the sale done quickly.
Selling in person has benefits like cash payment, which can be nice if you want to avoid using online platforms and shipping logistics.
How long does it take to sell a used wedding dress?
The timeframe for selling a wedding dress depends on who designed your dress, the style, condition, price, and the platform you’re selling the dress. For some people, it takes just a few weeks to sell a wedding dress, whereas for others it might take a few months.
Dresses from well-known and sought-after designers like Vera Wang tend to sell faster, especially if the gown is in excellent condition. Keep in mind that factors like wedding season and demand play a role in how long it takes to sell a wedding dress. This is why it doesn’t hurt to post your wedding dress on multiple online platforms and in-person stores.
Best Places To Sell Wedding Dresses – Summary
I hope you enjoyed this article on the best places to sell a used wedding dress.
Selling your wedding dress has a ton of benefits including recouping wedding costs, helping the environment by producing less stuff, and helping a bride get a beautiful gown on a budget.
If you have a wedding gown sitting in the closet gathering dust, then you may want to try selling it for cash.
Many of the sites listed above aren’t a hassle to use, and many even have a commission rate.
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations.
For many Americans, one of the best ways to get closer to their ideal annual income is to learn how to make money online.
According to a 2024 study from Smart Asset, individual Americans need an annual salary of $96,500 to live comfortably in a major city, and families with two children need to make about $235,000.
However, the Bureau of Labor Statistics (BLS) recently reported that the weekly median earnings for Americans was $1,139. This makes the median annual salary a little less than $60,000—far below the annual cost of living in many cities.
Some leverage the thriving “gig economy,” where you find contracted gigs in a virtual marketplace, and others generate passive income. Regardless of your skill set and interests, you’re sure to find something that works for you.
We put together a list of 27 different ways you can make money from home to supplement your income. You’ll also learn what it takes to get started and whether or not it’s right for you.
1. Find miscellaneous freelance jobs
A great place to start when learning how to make money online is by looking at platforms that offer a wide range of work. Before diving into the rest of the list, it’s helpful to know about popular platforms like Upwork and Fiverr. Every day, people and companies post jobs you may be perfect for.
At these sites, you can type in some of your various skills to see if any jobs are available. You can also create a detailed profile marketing your skills so people can find you more easily and offer you work.
Best for: People with a wide range of skills.
What you need to get started: Skills will vary depending on the specific job.
2. Take online surveys
Many companies out there want to get opinions from specific demographics and will pay you to take these surveys. While these don’t pay as much as many of the other options on the list, they also don’t take that long to do, so they are a simple way to make extra money. You can sign up to take these surveys at websites like Survey Junkie or Swagbucks.
Best for: Anyone with access to the internet.
What you need to get started: Access to a web browser.
3. Perform data entry
Data entry is a skill that many people can learn if they don’t already have experience. Doing data entry typically involves inputting data from different sources into a spreadsheet. Sometimes, you can find businesses looking for long-term workers, which can offer a little more stability than finding “gig work.” In addition to sites like Upwork and Fiverr, you can find data entry work at TechSpeed and Oworkers.
Best for: Well-organized individuals.
What you need to get started: Some proficiency with spreadsheet programs like Excel and Google Sheets.
4. Become an online tutor
For teachers looking for online side hustles, becoming an online tutor is a great option. Even if you’re not a teacher, you may be able to find some subjects that you can help students with. The platforms that link tutors with students usually cover school subjects like math, English, foreign languages, writing, and more. You can sign up to tutor on websites like TutorMe, Skooli, and Preply.
Best for: Those who love to teach.
What you need to get started: Experience teaching and expertise in the subject matter.
5. Be a virtual assistant
Many businesses of all sizes need additional help, so they hire virtual assistants. Virtual assistant tasks can vary depending on the gig. Some of these opportunities may be for one day of work, but others may need help for longer stretches of time.
These may pay you per job or per hour, and you can find these gigs on any freelance website. As of 2024, the average hourly rate for virtual assistants is $24 per hour and can be upward of almost $34 per hour.
Best for: People with a wide range of skills.
What you need to get started: Skills will vary depending on the specific job, but some skills can be helpful for many gigs like project management, organization skills, and data entry.
6. Get paid for your perspective
Focus groups are a key aspect of marketing, but it’s no longer just for new products hitting store shelves. In the digital age, companies are looking for people to review the user experience for their websites.
Sites like UserTesting pay you to share your opinions about different products from a variety of different brands. There are also sites like Userbrain that allow you to test different websites, applications, and software.
Best for: Individuals who like sharing their opinions.
What you need to get started: Access to a web browser.
7. Rent out your stuff
Do you have things that you don’t mind renting out? Well, websites like FriendWithA connect you with people who are looking to rent various items. Some of the main items people rent include cameras and film equipment, tools, generators, bikes, and other items people may only need for a day or two.
Best for: People with items they aren’t regularly using.
What you need to get started: Items in good condition to rent.
8. Rent out a room
In addition to apps like Uber, Airbnb is one of the most popular platforms in the new “sharing economy.” Many people use Airbnb as an alternative to hotels while traveling, but some people need a room to rent for longer periods.
Joining a platform like Airbnb allows you to make use of the extra room in your home for both travelers and long-term renters.
Best for: People with an extra room or home.
What you need to get started: A well-maintained room or home.
9. Sell used items
Selling used items is one of the best ways to make money because we all have things we no longer use. You no longer need to have a garage sale to sell your old items because there are platforms that can help you find buyers. There’s a long list of platforms that allow you to sell your used items like:
One of the primary advantages is that you’re no longer limited to your neighborhood and can reach a larger pool of potential buyers. If you have unique novelty items you’re willing to sell, you may want to consider a platform like eBay, where people are regularly looking for hard-to-find items. This is also a great way for kids to make extra money by selling old toys.
Some of these sites are also a great way to make money fast online because they have quick payouts once an item is sold. If the buyer is local, you can get paid the same day.
Best for: Those with old items they no longer need.
What you need to get started: Supplies to ship orders or transportation to deliver locally.
10. Sell graphic design services
There’s no shortage of graphic design jobs, and you can find these jobs through freelance websites or directly with businesses. Many businesses of all sizes need people who can design advertisements, logos, and more. If you’re a graphic designer, it may be a good idea to create a website that hosts a portfolio of your work where people can contact you directly as well.
Although it’s helpful if you have a background in graphic design, you can learn many graphic design skills on your own. There are many helpful tutorials for popular programs like Photoshop on YouTube and other social media sites.
Best for: Graphic designers.
What you need to get started: Graphic design software.
11. Create online courses
Is there something you know quite a bit about that you can teach to others? If so, you can create and sell online courses. From work-related topics to yoga to parenting strategies, offering classes for something you are a subject matter expert in can help you make money while doing something you love! Some of the best websites to sell your courses include Udemy, Skillshare, and Teachable.
You may want to familiarize yourself with online course platforms because they are a great resource to broaden your skills. If you’re willing to invest some time and a little money, there are many courses to teach you new skills that you can turn into more ways to make money online.
Best for: Those who love to teach.
What you need to get started: Expertise in the subject matter you want to teach.
12.Self-publish books
There are many ways for writers to make money online, and writing books is easier than ever. You no longer need to go through a publisher to make money selling books. Today, there are many different websites that allow you to self-publish and sell your books.
The most popular site is Amazon’s Kindle Direct Publishing (KDP), but you can also sell your books on websites like Apple, Google Play books, Kobo, and more. If you have a microphone, you can turn your books into audiobooks as a way to make even more money from your writing.
Best for: Writers.
What you need to get started: Writing software.
13. Start a blog
Blogging became big as a way to make extra money online in the early days of the internet, and it’s still very viable. The great thing about blogging is that you can write about anything you’re interested in and just need to find others who are interested in the same topic.
There are different ways to make money from a blog. You can create your own website and sell Google Ad space or find sponsors. You can also use platforms like Medium, which has a built-in audience, and you can earn revenue as more people read your posts.
Best for: Those who like to write.
What you need to get started: Writing skills and knowledge about a topic.
14. Do freelance writing
Although many news outlets and websites have dedicated journalists, there is also a lot of work out there for freelance writing. Some of the biggest websites out there, from the Washington Post to the New York Times, take submissions from freelance writers.
One of the best ways to find freelance writing work is by following editors on X (formerly known as Twitter). They’ll often post asking for people who can write on a specific topic. Sometimes, these gigs will pay hundreds of dollars for a single article. If you’re a fast writer and can write articles within a couple of hours, you could earn an hourly rate of $100 an hour or more.
If there’s a specific website you’d like to write for, just check and see if they have a page that tells you how to submit pitches for articles. Keep in mind that each publication pays different rates, and sometimes, the work can be inconsistent.
Best for: Writers. What you need to get started: Writing software.
15. Find voice-over work
There are many people looking for voice-over work in advertisements, presentations, or audiobooks. If you can read a script, there may be people out there who will hire you for your voice work. Freelance platforms like Upwork often have miscellaneous voiceover job postings, but you can make more with longer-form content.
ACX is the platform Amazon’s Audible uses for authors to find people to read their audiobooks. The prices vary, but you can sometimes make significantly more there than on the freelance websites.
Best for: Anyone with a great voice.
What you need to get started: A microphone with good quality.
16. Sell arts and crafts
There are many different marketplaces online for those who love making arts and crafts. One of the most popular marketplaces is Etsy, and there’s a market for just about anything you enjoy making. You can make your own prices, and the platform takes a small percentage of the sale.
Best for: Creatives and artists.
What you need to get started: Materials to create items.
17. Sell stock photography and videos
Have you ever wondered where websites get their high-quality photos or videos? Many of them don’t have in-house photographers or videographers. They buy stock photos and stock video footage for a variety of projects.
For those who love photography and videography, there are a variety of websites that will buy your photos and videos. Websites like SmugMug Pro, 500px, Getty Images, and many others will pay you for the rights to your photos and videos.
Best for: Photographers and videographers.
What you need to get started: A camera.
18. Sell royalty-free music
Similar to photography and videography, many websites will pay you for your music. This type of music goes in the background of YouTube videos, advertisements, and anywhere else people may need some background music. Websites like Epidemic Sound and Pond5 are good places to start when it comes to selling your tunes.
Best for: Musicians.
What you need to get started: Instruments and recording equipment. Royalty and licensing information is available on the websites.
19. Create an e-commerce website
There are many websites that allow you to sell your product, but each one takes a percentage of the profits for using their platform. You can keep a larger portion of your profits by creating an e-commerce website.
When you create your own website, you’ll hold onto most of the profits. One of the most popular ways to sell is with Shopify, which easily plugs into your website. Shopify and similar services have fees as well, but it’s less than using a platform like Etsy.
The primary downside is that marketplaces like Etsy have a built-in user base, so you would have to do your own marketing to get the word out about your website.
Best for: People with something to sell who want a larger portion of the profits.
What you need to get started: The ability to create a website.
20. Utilize affiliate links
Affiliate links are a way to make additional money that work in conjunction with many of the other jobs on this list. An affiliate link is a special link that you use for a product or service from a company, and each time someone uses your link, you get a commission. This is how many stay-at-home parents popularized blogging in the 2000s. You can easily make passive income by using affiliate links with any of the following:
Personal blogs and websites
Social media profiles and content
Podcasts
In an interview with Business Insider, creative entrepreneur and YouTuber Roberto Blake explained how he started making $5,000 a month from affiliate marketing. “I fell into affiliate marketing from the Amazon affiliate program, but then I realized a lot of subscriptions and software I was using had programs, too,” said Blake while discussing additional ways to do affiliate marketing.
Best for: Those who also make money from creating a platform like a blog, YouTube channel, or podcast.
What you need to get started: Discussing other products and services that you can link to.
21. Edit audio or video
There are many different job postings on freelance websites for audio and video editing. Many companies find freelancers through sites like Upwork and Fiverr to help them with their marketing content.
In addition to companies hiring audio and video editors, many social media influencers on platforms like YouTube and TikTok outsource their editing. Podcasters often hire audio editors as well.
This is another one of the skills that you can potentially learn if you don’t have experience yet.
Best for: People who enjoy editing audio and video.
What you need to get started: Software to edit audio and video.
22. Edit copy
People are always looking for editors. Whether it’s an author looking for someone to edit their next book or a company that needs an editor for something they’re publishing for the public, people need their words to look excellent. Previously mentioned websites like Upwork and Fiverr regularly have jobs for editors, but you can also find work at Reedsy and Wordvice.
Best for: Those who love language.
What you need to get started: Familiarity with the English language and various types of grammar rules, such as Chicago or AP style.
23. Become a social media influencer
Currently, it’s easier than ever to make money online through social media platforms. Platforms like YouTube and TikTok pay creators directly through their creator programs. Typically, you have to meet certain criteria to be eligible for these programs, but some people make hundreds or even thousands of dollars each month through them.
If you’re an online business owner, a writer, or anyone who sells products or services, social media is a great way to find new buyers. On these platforms, you can provide links to your products, and you can also include affiliate links as a way to earn even more.
Best for: People who don’t mind being on camera.
What you need to get started: Some or all of the following: a camera, smartphone, and editing software.
24. Start a podcast
Podcasting is an easy way to start making content that could potentially make you money. You have a lot of creative freedom with podcasts as well. You can talk about topics that you’re interested in, tell stories, or interview people. Then, you can broadcast it to thousands or even millions of potential listeners on apps like Apple Podcasts and Spotify.
It can take some time to make money from podcasting. Unlike social media platforms like YouTube or TikTok, podcasting platforms don’t have a program to pay creators. Podcasters primarily make their money from advertisements and affiliate links. Once you have a dedicated audience, you can reach out to companies to sell ad space on your podcast.
Best for: People who enjoy talking.
What you need to get started: A microphone and audio-editing software.
25. Create a newsletter
Newsletters were some of the first ways for people to make money online. Services like Mailchimp and others allow you to create an email list and send a newsletter out to your subscribers.
The newsletter can be as frequent as you’d like, you can discuss different topics that interest you, and you can put it behind a paywall on your website. Substack is a newer platform that combines blogging with newsletters, and you can charge readers a monthly or annual subscription. This is a helpful tool for those who don’t want to build their own website.
You can also use a newsletter as a way to promote your online business and alert your customers of new products or discounts.
Anne Janzer is a self-published author and discusses how she uses her newsletter to sell more books. “When I have something new going on, I can go and ask those folks, ‘Hey, can you share the word about this?’ and they’re the first ones to go out and post about my new book,” Janzer said in an interview about how her newsletter leads to more sales.
Best for: Writers and people with an online business. What you need to get started: The ability to write.
26. Walk or board dogs
If you’re a dog lover, this may be the right option for you. There are apps like Wag and Rover that connect dog walkers with people, but you can board dogs as well. For those who rent, you may need your landlord’s approval before boarding dogs, but this is a great option for those who want to make money from home.
Both Wag and Rover offer additional dog services for those with other dog specialties. These include:
Drop-in visits to check on dogs while the owner is away
Dog training
Dog sitting
Best for: People who love dogs.
What you need to get started: Possibly transportation to get to clients and a home that allows pets if you choose to board them.
27. Trade stocks
This path of making money from home is on the riskier side, but it can also come with higher rewards. The difference between investing and day trading stocks is that investments are long term, whereas trading involves buying and selling stocks on a daily basis.
To make money trading stocks, you’ll need to stay updated on all of the latest stock news and learn when to buy and sell properly. There’s a learning curve to trading stocks, but some people make full-time income trading stocks through brokerages like Charles Schwab, Vanguard, or Robinhood.
Best for: People with a high risk tolerance.
What you need to get started: Before trading, you’ll want to learn as much as you can about various stocks and how to read the market to minimize losses. Then, you need a computer to trade, or you can trade on apps like Robinhood.
Making money online can help you pay off your debts
If you have a lot of debt, allocating funds from your paycheck can be difficult. Making money online is a great way to earn extra income that you can put toward your debts and potentially improve your credit. Some people are even able to make more money online than they would in an office job.
Having a good credit score is also a way to get access to credit cards and loans. You can use these to fund your online business or better equipment. This all starts with knowing your credit health and having the right tools.
At Credit.com, you can get your free credit report card to check your credit. Sign up for ExtraCredit for additional tools like credit monitoring and ways to report additional payments to the major credit bureaus.
Delaware is a state full of rich history, stunning coastlines, and unique cultural experiences. From the historic streets of New Castle to the serene beaches of Rehoboth, Delaware’s attractions draw visitors year-round. Famous for its lack of sales tax and the storied legacy of the DuPont family, Delaware stands out in many ways. But what else is Delaware known for? Whether you’re looking to buy or rent a home in Dover, move into an apartment in Milford, or you’re just passing through, you’ll quickly discover that this state has much more to offer than meets the eye. In this article, we’ll explore what makes Delaware unique and why so many are proud to call it home.
1. First state
People know Delaware as the “First State” because it ratified the U.S. Constitution first on December 7, 1787. This historic moment is celebrated annually with various events and educational programs. Dover, the state capital, hosts many of these celebrations, attracting history enthusiasts from around the nation.
2. Scrapple
Scrapple is a beloved Delaware dish made from pork scraps and cornmeal, seasoned and fried to perfection. People often enjoy it as a breakfast item, with eggs and toast. The Apple Scrapple Festival in Bridgeville celebrates this unique food with tastings, cooking contests, and exciting activities.
3. DuPont legacy
The DuPont family has played a pivotal role in shaping the Delaware’s economy and culture. Starting with the establishment of gunpowder mills in the early 19th century, the DuPont Company evolved into one of the largest chemical companies in the world. Visitors of Delaware can spend a day exploring the original DuPont Company powder yards and workers’ community. The family’s influence extends beyond industry, with significant contributions to education, healthcare, and the arts in Delaware.
4. Beaches and boardwalks
Delaware’s coastline is famous for its beautiful beaches and bustling boardwalks. Rehoboth Beach, known as the “Nation’s Summer Capital,” attracts visitors with its charming boardwalk and lively atmosphere. Bethany Beach offers a quieter, more relaxed vibe, perfect for a serene getaway. A popular event for locals is the annual Sea Witch Festival in Rehoboth Beach, featuring a parade, costume contests, and fun activities.
Delaware is a haven for shoppers, thanks to its lack of a state sales tax. The Christiana Mall near Newark is a major shopping destination, featuring over 150 stores, including high-end retailers and popular brands. Additionally, outlets in Rehoboth Beach offer great deals on designer goods, drawing bargain hunters year-round. Downtown Wilmington and Dover also provide unique shopping experiences with local boutiques and specialty shops.
Fun facts Delaware is famous for
The Delaware Memorial Bridge: This bridge, spanning the Delaware River, is one of the longest twin-span suspension bridges in the world.
Historic celebration: The state is home to the longest-running uninterrupted Fourth of July parade in the nation, held annually in the town of Smyrna since 1777.
Tax haven: Delaware is known for its business-friendly laws and is home to more than 1 million corporations, including over 60% of the Fortune 500 companies, due to its favorable tax policies and corporate laws.
6. Horseshoe Crabs and Shorebirds
Delaware Bay is known for its unique ecological phenomenon involving horseshoe crabs and migratory shorebirds. Each spring, thousands of horseshoe crabs come ashore to lay their eggs. This event attracts a variety of shorebirds, especially the Red Knot, which feeds on the crab eggs to fuel its long migration. This natural spectacle is crucial for bird conservation and attracts biologists and bird watchers worldwide.
7. Nemours Children’s Health System
Founded by Alfred I. du Pont, Delaware is home to the renowned Nemours Children’s Health System. The Nemours/Alfred I. duPont Hospital for Children in Wilmington is a leading pediatric care facility. It provides specialized medical treatments and comprehensive healthcare services for children. The hospital’s state-of-the-art research programs contribute significantly to pediatric medicine advancements. Families from across the region seek care at this world-class institution.
8. Punkin Chunkin
Punkin Chunkin is a uniquely Delaware event where teams compete to launch pumpkins as far as possible using homemade contraptions. Categories include air cannons, catapults, and trebuchets, showcasing engineering creativity. The competition is held in the rural areas of Sussex County, offering a festive atmosphere with food vendors and live music.
9. Air Mobility Command Museum
The Air Mobility Command Museum at Dover Air Force Base showcases the history of military airlift and refueling aircraft. This museum is a must-visit for aviation enthusiasts and history buffs featuring over 30 aircraft, including the iconic C-5 Galaxy. Interactive exhibits and simulators provide an immersive experience for visitors. Additionally, the museum hosts special events, such as vintage aircraft fly-ins and educational programs for the community.
10. Bombay Hook National Wildlife Refuge
Bombay Hook National Wildlife Refuge is a haven for wildlife and nature lovers. Located along the Delaware Bay, it spans 16,000 acres of tidal salt marsh. The refuge is home to diverse bird species, making it a prime spot for birdwatching. Visitors can enjoy scenic drives, walking trails, and photography opportunities. The refuge plays a vital role in preserving Delaware’s natural habitats.
11. Delaware Art Museum
The Delaware Art Museum in Wilmington is renowned for its collection of American art and illustrations. It features works by Howard Pyle, a native of Wilmington and a prominent illustrator. The museum’s Bancroft Collection includes British Pre-Raphaelite art, offering a unique perspective. Special exhibitions and community programs make the museum a cultural hub in Delaware.
12. Fenwick Island Lighthouse
The Fenwick Island Lighthouse, built in 1858, stands as a historic landmark on the Delaware-Maryland border. This iconic structure served as a critical navigational aid for boats traveling along the Atlantic coast. Over the years, it has attracted numerous visitors offering them a glimpse into the life of 19th-century lighthouse keepers and the evolution of coastal navigation technology. Today, it’s preserved as a cherished landmark, embodying the heart of Delaware’s coastal communities.
Jenna is a Midwest native who enjoys writing about home improvement projects and local insights. When she’s not working, you can find her cooking, crocheting, or backpacking with her fiancé.
If you’re buying a home or plan to, there are a few good reasons you may want to lock in your mortgage rate this week.
Getty Images/iStockphoto
If you’re a potential homebuyer who’s wondering whether it really makes sense to buy a home in today’s tough (and expensive) housing market, you certainly aren’t the only one. For starters, home prices remain elevated due to a mix of limited inventory and persistent demand. And, ongoing inflation issues have led the Federal Reserve to keep its benchmark rate paused at a 23-year high. As a result, mortgage rates remain elevated, vastly increasing the cost of buying a home and giving many buyers pause.
But while buying a home can be a little more difficult (and substantially more expensive) in the current economic environment, it still makes sense to consider in many cases. After all, owning a home comes with a long list of benefits for homeowners, from the safety and security this type of investment provides to the potential to build equity in your property (which can be accessed at an affordable rate in the future).
If you’re going to purchase a home soon, though, you have a crucial decision to make: when to lock in your mortgage rate. And, with various economic factors at play, there are a few compelling reasons why this week might be an opportune time to make your move.
Learn more about your top mortgage loan options online now.
4 big reasons to lock in a mortgage rate this week
There are a few reasons you may want to consider locking in a mortgage rate this week, including:
Mortgage rates have dipped
The Federal Reserve decided to keep interest rates paused during its meeting earlier this week, and, as a result, mortgage rates have experienced a decline, with 30-year conventional loan rates dropping from an average of about 7.07% last week to today’s average rate of 7.00%. What that shows is this latest pause in rate hikes, coupled with other favorable economic data — like the latest inflation report showing a slight drop month-over-month — has created a more favorable environment for borrowers.
After all, lower mortgage rates translate to reduced monthly payments and the potential for significant savings over the life of your loan. And, all it takes is a fraction of a percent, like the rate drop we’ve seen over the last week, to make a big difference in terms of your loan costs. So, by locking in a mortgage rate now, you can capitalize on this dip and potentially secure a more affordable mortgage.
You may also want to consider that home prices may continue to stay elevated or even rise in many markets. If this home appreciation trend continues, delaying your purchase in hopes of lower rates could result in paying more for a home, potentially negating any benefits you gain from waiting for mortgage rates to drop further. But by moving forward with your home purchase now, you can potentially secure a property before prices climb.
Compare some of the best mortgage rates available to you here.
The uncertain economic environment poses risks
While mortgage rates have decreased recently, the economic landscape remains uncertain. Inflation, though it’s showing signs of easing, has proven stubborn over the past couple of years, and there’s no guarantee that this downward trend will continue. If inflation were to climb again unexpectedly, the Federal Reserve might respond with more aggressive rate hikes, leading to higher mortgage rates.
And, that’s not just a theoretical. The Fed has been clear about its goal of reducing inflation by keeping rates elevated, and it has already put off the expected mid-year rate hikes in lieu of more rate hike pauses. By locking in your rate now, though, you protect yourself against potential future increases and gain peace of mind in an unpredictable market.
Limited home inventory calls for quick action
The housing market also continues to face a shortage of available homes. This limited inventory has been a persistent issue since the start of the pandemic, driving up competition among buyers and putting upward pressure on home prices. And, while there’s hope that the inventory problems will improve in the coming months, many homeowners are holding onto their current record-low mortgage loan rates right now.
So, rather than selling and buying a new home with a much higher mortgage loan rate, many current homeowners are opting to stay put instead. That is making it even more challenging to find suitable properties in today’s market. By locking in the most favorable mortgage loan rate you can find right now, though, you position yourself to act quickly when you find a home that meets your needs, giving you an edge in a competitive market.
Increased lender competition can benefit buyers
Today’s elevated mortgage rates are slowing down the mortgage loan market, which means that lenders are vying for reduced business. This competition can lead to more favorable terms for borrowers, including lower rates and reduced fees. By engaging with lenders and locking in a rate now, you can take full advantage of this competitive environment, potentially securing terms that might not be available if market conditions shift.
Some lenders are also offering loan products that are designed to make homeownership more accessible, such as low down payment options, first-time homebuyer programs and loans with flexible credit requirements. But, these products may become less available or less favorable if economic conditions change. Making your move now allows you to consider these or other specialized offerings as part of the mortgage loan process while they’re still readily available.
The bottom line
While the decision to lock in a mortgage rate is ultimately based on your circumstances and goals, the current market conditions present a compelling case for action. Mortgage rates are down compared to last week, and increased lender competition could mean that there are more (or better) mortgage loan options to consider. And, by locking in a rate now, you could not only secure a more favorable mortgage rate but could also position yourself to act decisively in a competitive housing market.
Angelica Leicht
Angelica Leicht is senior editor for Managing Your Money, where she writes and edits articles on a range of personal finance topics. Angelica previously held editing roles at The Simple Dollar, Interest, HousingWire and other financial publications.
Personal loans and personal lines of credit are both helpful tools to cover large expenses. These financing options have similar benefits, like no collateral requirements and low rates for well-qualified borrowers, but deciding which is right for you comes down to how you prefer to receive and repay the funds.
Learn the similarities and differences between personal loans and personal lines of credit to determine which is right for your plans.
Personal loans and lines of credit: How they’re similar
Personal loans and personal lines of credit are typically unsecured, meaning you don’t have to pledge an asset as collateral in order to borrow. It also means the lender will rely mostly on your credit, income and existing debts to determine whether you qualify.
When you apply for either financing option, the lender will pull your credit report to examine your creditworthiness and how you handle existing debts. Applicants with good credit and low debt-to-income ratios have the best chances of qualifying and getting the lowest rates.
“The qualifications for both loan types are determined by an individual’s credit experience, employment stability and ability to repay the debt,” Jean Hopkins, director of consumer lending at WeStreet Credit Union in Tulsa, Oklahoma, said in an email interview.
Banks and credit unions offer personal loans and lines of credit, while online lenders offer personal loans, but usually not credit lines. Qualified applicants may be able to borrow up to $100,000 with either type of financing.
With both options, borrowers repay the debt, plus interest, over time. Missed payments are typically reported to credit bureaus after 30 days and can negatively impact your credit score.
Key differences between personal loans and credit lines
Though qualifying for these two financial products can work similarly, they are two different types of credit. A personal loan is a type of installment loan, and a personal line of credit is a type of revolving credit.
With a personal loan, you receive funds as a lump sum and make payments in even installments over a fixed term, typically two to seven years.
Interest on personal loans is charged on the entire loan amount at a fixed rate.
Personal lines of credit are revolving credit, so you can borrow against your predetermined credit limit as needed and access more money as you make payments.
“When payments are applied to the principal balance of a line of credit, that amount is made available to borrow again,” Hopkins said.
A personal line of credit generally has a “draw” period and a “repayment” period, Katherine Fox, certified financial planner and founder of Sunnybranch Wealth in Portland, Oregon, said in an email.
The draw period is when you can access money from the credit line and make minimum monthly payments or interest-only payments, depending on the lender. This period typically lasts from two to five years. Once the draw period is over, you’ll enter the repayment period, when you can no longer withdraw money and must make payments until the end of the term, which can be up to 10 years.
Personal lines of credit have variable interest rates, and you only pay interest on the amount you draw. This means the monthly payment on a personal credit line can fluctuate.
Finally, the fees are different on personal loans and personal lines of credit. A personal loan may come with an origination fee, which the lender typically takes from the loan before sending you funds. A personal line of credit may have an annual maintenance fee as well as withdrawal fees every time you access funds.
Personal loan
Personal line of credit
Type of credit
Installment.
Revolving.
How funds are disbursed
One lump sum.
Borrower withdraws funds as needed against credit limit.
Type of interest
Fixed. Interest is charged on entire loan amount.
Variable. Interest is only charged on money withdrawn.
Repayment details
Monthly payments stay the same.
Minimum monthly payments vary based on the interest rate and amount withdrawn.
Lender may charge an origination fee.
Lender may charge an annual maintenance fee plus a withdrawal or transaction fee every time you access funds.
When to consider a personal loan
A personal loan is a good idea when you know exactly how much you need to borrow and want a predictable repayment schedule. It can be ideal for:
A large purchase.
Debt consolidation.
A one-time emergency.
“If you have an immediate need for a specific amount of cash, it makes more sense to get a personal loan,” Fox said. “You get all the cash you need at once and you will pay it back with a fixed interest rate.”
A personal loan may also be cheaper in the long term because you lock in an interest rate for the full loan term, Hopkins said. If the federal funds rate rises while you’re repaying a personal loan, for example, your rate and monthly payment won’t increase.
Additionally, while interest rates are heavily based on the borrower’s credit and income, starting rates may be lower on personal loans than on personal credit lines.
Low interest rates for borrowers with good or excellent credit.
No collateral needed.
Bad credit may prevent you from qualifying.
Possible origination fee.
Can’t access additional funds after borrowing.
When to consider a personal line of credit
You might consider opening a personal line of credit if you need ongoing access to cash. This financing option may be ideal if you expect your expenses to fluctuate over time. Examples of expenses that may be right for a personal line of credit include:
A home renovation project.
A cross-country move.
A wedding.
“If you are uncertain if you will need cash, uncertain about how much you will need and/or uncertain when you will need it, a personal line of credit may make more sense” than a personal loan, Fox said. “It gives you the flexibility to pull out more or less cash on your own timeline, rather than getting a single lump sum that you are responsible for repaying.”
Pros and cons of personal lines of credit
Easy access to money as you need it.
Only pay interest on what you borrow.
Low interest rates for borrowers with good or excellent credit.
No collateral needed.
A variable interest rate means payments may be harder to budget for.
Bad credit may prevent you from qualifying.
Possible annual and withdrawal fees.
Borrowing alternatives
The best way to borrow money is to find the option that costs the least interest. Compare other financing options to choose the one that’s most affordable and fits your plans best. Here are some alternatives.
Zero-interest credit cards: If you have good or excellent credit, you may qualify for a credit card with a zero-interest introductory rate, usually for the first 15 to 21 months.
Buy now, pay later: A “buy now, pay later” plan can break the cost of a large purchase into four equal payments every two weeks, often at no interest. Longer payment plans may be available, but you’ll likely have to pay interest.
Home equity financing: A home equity loan and a home equity line of credit (HELOC) are types of secured financing that use a borrower’s home as collateral. Interest rates are usually lower compared to unsecured forms of borrowing. Lenders see home equity financing as less risky, because they can take ownership of your home if you default.
401(k) loan: Borrowing money from your retirement account comes with low interest rates, but your nest egg will miss out on potential growth and you could be forced to repay the loan in full if you leave your job.
Family loan: Borrowing from a loved one can be a quick way to access money with little to no interest and flexible repayment terms, but you could risk your relationship if the loan is not repaid as agreed. Be sure to draft and sign a payment agreement so both parties are on the same page about the repayment details.
Inside: The exact habits you need to learn how to be financially stable. Financial stability is when you are in control of your finances. Make sure you have these money habits!
Are you ready to move from financially sound to financially stable?
Well, the good news is this is something you can easily accomplish and we are going to show you exactly how to do it in this post. Learn over thirty simple traits to prove to yourself that you are financially stable.
One of the great things about being money financially stable is it means that you are less worried about money. You are established with your finances and you are consistent on how you spend and save your money.
It is a great feeling to be financially stable because you know that your bills are taken care of and everything that you want to spend money on that you actually can!
The Money Bliss Steps for Financial Freedom is a guide to help you become financially independent. Along your path, you will go through many different journeys and many different seasons, but it is a great feeling to know that you are in a good place financially.
Becoming financially stable is something that anybody is capable of doing.
It just takes determination, a growth mindset, and a desire to be wise with your money.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
What does Financial Stability Mean?
Financial stability is when you are confident in your personal financial situation. You have money to pay monthly bills, set aside for big purchases, invest in your future, and be able to sleep at night.
When you can do these above things, that is when we can say that a person is financially stable.
When you define financial stability, the definition should motivate you to improve your money situation because the more you work towards becoming financially stable, the better the opportunities present themselves.
It is one step up from being financially sound and moving closer to financial security.
Another way of saying financially stable is of good financial standing.
Overall, the financially stable meaning is you have made wise decisions that will ultimately let you live the life you want. One step closer to financial freedom.
How to Be Financially Stable
The good news is you only need to do three steps to become financially stable plus they are not complicated.
This is exactly how do you become financially stable…
It is just a habit that you need to start doing.
If you have bad habits with money, then you are not going to have the success with money that you need. If you have good habits with money, then you will end up becoming financially stable.
Just a side note, If you need a good book on changing bad habits into good habits. I highly recommend Atomic Habits by James Clear. It is a great book to help you change the habits that need to change, and start to live the life that you want.
Now, back to the three steps to becoming financially stable.
If you want to learn how to become financially stable, then this is what you need to do.
1. Pay Yourself First
This is the most important habit that you can do to become financially stable.
Many times, I feel like I sound like a broken record about the importance of how you need to pay yourself first. It doesn’t matter if it is your very first job in high school, starting out at 21, or quickly approaching your 50s, you need to pay yourself first today.
Take your paycheck and automatically save a certain percentage.
If you have never saved before start with 10%.
If you know that your spending is out of control plus you have the income to save a higher percentage, then plan to save 20-25% ot your income.
When you first begin to save, the goal is not the amount you save; it is about the first time that you begin to save.
It is about proving to yourself that you are capable of saving and seeing that account, increase over time will continue to motivate you.
So, if you want to be financially stable, then you must pay yourself first. Set up a separate savings account or an investment account where you will put that money.
2. No Debt
Second, no debt. Period.
If you cannot buy something in cash, then wait until you have the cash available to make the purchase. Do not use debt just because you have access to credit.
If you want to be financially stable over the long term, that means you must eliminate consumer debts.
Now, before you freak out and say, “I can’t be financially stable because I have so much debt that is dragging behind me and holding me back.” Don’t freak out. You can make a plan to get out of debt.
By getting out of debt, you are proving that you are on the path to becoming financially stable.
In the meantime, you just don’t go into any more debt.
If you are in your 20s, steer clear from debt and do not get into the debt trap.
The Trickly Mortgage Debt Conversation….
Because owning a house comes with a price and it comes with a premium since there is a cost to upgrade it, pay property taxes, and so much more. Plus this varies greatly in an HCOL vs LCOL area.
Do your research and figure out is it more cost-effective for you to purchase a home and pay the mortgage payment or is it better to rent and not have the responsibilities of being a homeowner. This is a personal situation that you must determine what works best for you and it is very location and market driven.
For example, we bought in a high cost of living area before the prices skyrocketed. Thus, our mortgage is way less than the cost of rent. So for us, we are still financially stable because we have a mortgage because it is cheaper than rent (and by a lot).
On the flip side, if you are just starting out and trying to purchase a home, it may be more cost-effective for you to keep renting to stay out of debt and become financially stable quicker. Then you will be able to reach financial independence faster.
3. Invest Your Money
The last piece to becoming financially stable is you must invest your money.
This is not the time or place just to be stuffing money under the couch or in a savings account that is earning .02%. You need to invest your money in the stock market.
The best way to invest is on a consistent basis. Every paycheck you invest a certain amount consistently. It does not matter if the market is up or the market is down.
The returns from investing will be greater than doing nothing with your money.
Doing nothing with your money means that you are actually losing money when you account for the cost of inflation.
So, you must invest your money.
One of the types of income is passive income, and you can earn passive income through investing.
A huge step to becoming financially stable is to diversify your income. This may not be as important to you today, but if you are in that category of “I don’t want to work anymore” or retirement is on the horizon.
Your financial future can be secured through investing in your portfolio.
Recap – How to be Financially Stable at any Age
You can become financially stable at any age – 20, 25, 30s, without college, or even in your teens at 17 or 19. You can even be financially stable with a low income.
The formula is still the same for everyone.
These are the three things you must do for financial stability:
Pay Yourself First
No Debt
Invest
If you are serious about wanting to be financially stable, these are the three steps that you need to take. It is not rocket science.
It is very simple, clear steps to make sure that you are successful in the long term with money.
Now, let’s dig into the habits and traits of someone who is financially stable.
Learn:
Traits of someone who is financially stable
This is when we can say that a person is financially stable.
In this section, we are going to dive into the qualities, traits, and habits of people that are financially secure.
These are things that you can start working on today. Over time you will begin to make better solid money choices going forward.
These are solid money habits that will transform your financial future.
These are simple and easy ways for you to become financially secure.
1. Emergency Fund
An emergency fund is the backbone of financial security – there is absolutely no way around it.
The goal is for you to never use your emergency fund. But let’s be real, there will be a time or a place that you will have to dig into your emergency fund because an actual true emergency exists.
A financially stable person has an emergency fund to fall back on when times get tough.
Here is more information on how to build an emergency fund and the steps that you need to build one fast:
2. Plan to Be Debt Free
Like we said earlier, one of the basic steps of how to become financially free is to have no debt.
However, for too many people that would automatically say that is not in the cards for me. Paying off my debt is way too difficult. But, not for the financially stable person!
I am here to tell you that you can become financially stable by creating a plan to becoming debt free and actually stick to it.
That means your debt balance is going down each and every month. Plus you know your debt payoff date because that paying off debt is one of the best decisions that we ever personally made.
Also, it does not matter if good debt and bad debt – the concept promoted by many financial gurus. Debt is debt.
Debt means that you owe somebody else and you are going to have to pay it back at some point for a premium. So, the sooner you pay off your debt, the better of you will be.
3. Save 20% of Income
Do you save at least 20% of your paycheck? If so, then you know what financial stability means.
When you are financially stable, you are not living paycheck to paycheck and you automatically save money at the beginning of the month when your paycheck comes in.
The best place to start is to start saving at least 20% of your income.
If you are not quite there (yet), then look at one of our main money saving challenges. They are plenty of savings numbers to start small and then work on the bigger challenges. Prove to yourself that you save money.
Since saving money is easy for them, they work on increasing their savings percentage each year. Personally, I find it a better challenge to increase that savings percentage more than anything else.
4. Spend Less Than You Make
In order to make progress, your expenses are less than the money that is coming in.
That does not mean the amount of money coming in is the same amount that you can be spending. The reason why is you have to account for the money saved adn invested.
You learn how to live below your means.
This may mean giving up a coffee, a trip to the salon, happy hour, or something you do out of habit in order to start saving money.
Remember, the goal for this type of person who is financially stable is they spend less than they make. They may spend on the little luxuries here and there because they are able to do since they have set money aside and they are not overspending.
5. Mastering Money management Skills
The best trait of somebody that is financially stable is they understand the basics of money management.
This does not necessary mean the person is in love with spreadsheets, budgets, numbers, and reads money management books every single second. This means they understand the basics.
You earn, you save, you spend.
You save more, spend less, and you prioritize your money goals to make sure you are making the progress on your financial journey that you want to do.
Many times financially stable people start to enjoy learning about money management and tend to dive into their finances even further. Once they get started, they want to learn more about their money situation, and how they can improve their finances quicker by making a few more changes.
6. Their Finances are Exciting
You don’t have to be an Excel spreadsheet nerd to find that your finances are exciting.
This type of person enjoys waking up checking their balances and seeing a positive increase in their net worth.
They find it exciting, they find it motivating. It makes them realize all of their sacrifices is making a difference in the long term. They look at the greater picture and saying I’m not going to work till I am 65; I may look at retiring when I am 50.
They are working hard today and enjoy finding ways to improve their money situation; which they find exciting and fun. You love quoting these money mantras daily.
7. Month or More Ahead on Bills
A financially stable person uses their income from this month to pay for the next month. They are not living behind where the income coming in is going is paying for the current expenses.
They are actually a full month, maybe even two, maybe even three months ahead of their bills.
For example, their paycheck from July will be their August spending. For some that want an even bigger cushion, their money earned in July is actually going to be for their September spending.
That is a sign that somebody is financially stable and has the ability to avoid temptation and not to spend the extra money.
8. Sinking Funds are a Priority
A financially stable person sets aside money regularly for expenses in the future. These are called sinking funds.
These buckets of money is money allocated for a certain purpose.
One of the most popular sinking funds that most people have is for vacations, kids activities, home repair, or car repair. Those are probably the most common.
You can have as many sinking funds as you want as a financially stable person. Another option is just to have one big sinking fund that will cover whatever is needed in case something be happens. A wise person knows how much money they need to cover these expenses.
A financially stable person utilizes sinking funds to make sure they are able to meet unexpected expenses when they happen.
9. Invest in Stock Market Consistently
In the last two years, the stock market on average typically earns 13.9% each year (source).
The reason that this is important is your money can make you money without you doing anything.
Once you have your investment account set up and automatically contribute a slice of your paycheck, then you select a fund or a few stocks of companies you believe in. Starting your investing system is not as bad as you would think.
By investing in the stock market consistently, you are more likely to have higher returns than somebody who invest once a year, twice a year, or three times a year.
By investing either every week or every month, the likelihood that your account size will increase is greater than when you try and time the market.
I’ll be very honest…the average person has no idea how the stock market is going to react and even most experts. However, you can take an investing course, like Trade and Travel with Teri Ijeoma, and learn about buyers zones and seller zones. This is the best financial knowledge someone can have and you probably will not lose money by attempting to figure it out yourself.
This investing course is a great resource and something I highly recommend all of my readers to take. Read my Trade and Travel review.
Because the amount of the course is eye-opening, I can pretty much guarantee it will be less than the amount that you can lose in the stock market by yourself.
That is what a savvy person would do – invest in the course and then invest in the stock market.
10. Focused on Next Money Goal
A financially stable person knows exactly what they have done to get where they are today. Plus they know exactly where they are headed to in the future.
They don’t waver on their next money goal.
They have short term financial goals that they are determined to make happen. That is their number one or two priority in their life because they know that by reaching their money goals, they will have more time freedom in life.
At the end of the day, having money equates to freedom.
This is not the same as having money does not equate to success. There will always be the age-old debt on whether is money everything.
The answer may surprise you, but at the end of the day… money does equal freedom.
11. Saving for Retirement
If I don’t save for my retirement, then who else will help me in my older golden years? That is exactly what a financially stable person would ask.
They know that social security and all the government programs might run out of funding, so they are focused on saving for their retirement and most financial state. They are in control of what they are able to control. You cannot control future government programs or tax rates.
In addition, they are using a Roth IRA to get the maximum contributions that they can have each year for retirement. They are savvy enough to get the maximum contribution from their employer’s 401K match.
This type of person won’t be wondering… What Happens If you Don’t Save for Retirement?
12. Able to Vacation When They want
These are the people that you probably envy the most because they paid cash for the vacation that you financed.
A financially stable person is not worried about having to pay for the trip on the way home. They are savvy and use a vacation fund that they contribute to on a regular basis.
That right there helps them to go on vacation each and every year.
Don’t be jealous! Join the bandwagon and start traveling the world today.
13. Money Set Aside for a Rainy Day
As much as we like to think we can predict the future, in reality, we do not know what the next day, week, month, or even year can bring. And in many circumstances, you may be caught off guard when difficulties come.
If you have a loss of income and still have bills to pay today, that is where having a rainy day fund set aside will help you be prepared.
This is a step to becoming financially secure and a long-term habit to embrace.
A person who has a rainy day fund that will cover at least six months of living expenses is somebody that is financially secure.
They know that hopefully, they will not have to use that money, but in case they do, the money is available to them.
14. Don’t Cry When Something Breaks
When you’re financially secure, you know things that are going to break.
And as much as it sucks, you are not going to be in tears, trying to figure out how to pay to replace that item. You understand the concept of… It is what it is you move on.
Replace the item and you go on with your day.
Since you know you have money set aside for various purposes, there is no reason to cry. It may not be how you feel like spending money, but that is just part of life.
When you are financially insecure and a light comes on in your car, that is a red flag that something is wrong. Many people freak out because they don’t have the money set aside for a $500 or $1,000 repair.
So you know when you are financially secure when you can laugh it off, shake it off and move on with your day.
15. Fun Spending Can Happen
This is one of the best reasons for being financially secure…you can spend money!
When you decrease your other expenses, you can increase the amount of fun spending. There are great benefits to becoming aware of your financial situation.
Too many times, people give up to their money situation. Instead of saying, no, no, no all the time, you will get to a position where you can say yes yes yes! I want to do this and this!
You do not feel guilty about spending extra money!
At this point, you know you have earned whatever it is you want to spend money on.
16. You Can Sleep at Night
This is one of the best traits of a financially secure person! Their finances are NOT waking them up in the middle of the night wondering “oh my gosh, how am I gonna pay my bills, how am I going to pay my rent, how am I going to pay my car payment, I am sick of my job, etc.”
You quit worrying about do I have enough money to make it to the end of the month. That is financially security right there.
When you can sleep at night knowing all of your bills, expenses, and saving are taken care of. You know deep down that you are on track of your financial future.
That is financial security at its best.
If you are in a situation right now where you can’t sleep at night, then you need to learn how to drastically cut expenses. You must get a hold of your situation before it spirals any further out of control.
17. No Frivolous Spending
Financially, even though a financially secure person can spend money when they want. They have the money to be able to spend, right?
Most choose not to be frivolous with their money.
(Hint: that is why they stay financially stable.)
They tend to be a thrifty person knowing a good price to purchase an item. They know when something is overrated or overpriced.
Even if they can afford it, they are just not willing to spend money on it. That is okay because they are in the situation of being financially secure because of the solid money decisions they have made.
Spending frivolous money here and there can up quickly. Even something as low as $10 or $20 here or there may not impact your financial picture in one day. If you add it up over the course of a year, it can become $3,650 or $7,300. Just by frivolously spending a small amount each day.
18. Know Your FI Number
Your FI number will help you to make the jump to financial freedom.
You know what it will take for you to become financially independent – specifically, the dollar amount needed.
In the FIRE community, it is typically known as your FI number, which is your financial independence number. The number is the amount of your net worth and the amount saved up, so you can start living off of your investment income.
This number will vary from person to person.
It is based on your personal situation. The variables that impact your FI number include:
Your income today
How much you plan to spend today
The amount you save today
How much you plan to spend in the future
Your age now
Age you want to quit working (aka retire)
Typically, most couples with kids can start looking at FI number in the $1.5 million range. The first reaction is that the number is either WAY LOWER than they thought it would be. Yes, because we have been taught by “financial professionals” that you need so much more in assets in your retirement accounts than you actually do.
The time is now to become a financially secure person and learn your fi number today. Here’s a great resource to help you.
19. Diversify Your Income
Just as with as above and knowing your FI number, financial independence becomes more likely to happen once you start diversifying your income.
A financially stable person earns all three types of income.
Most people rely on earned income only. If you only rely on earned income, then you reach a max threshold of what you are able to earn.
So a financially secure person has multiple buckets of income; they are diversified in investments, real estate, or side hustle. The key to long term success is finding ways to make passive income.
20. Budget isn’t AS Important
A trait of a financially secure person is they know how much they are able to spend, how much they need to save, and the amount of money that they come in every single month.
They do not need to budget down to the very last line item. (thank goodness for many of you reading this!)
A financially secure person has an overall sense that income exceeds their spending and saving goals.
That is financial security.
While a budget may help them stay focused and a more detailed budget may help them reach their longer term goals.
It does not mean that a budget is necessary. You can still have a loose budget and know that you are still making ends meet because they have a system set up and a system set in place.
Budgeting is not as important as it was previously.
21. Splurging is Okay
This is one of the best feelings as a financially secure person is knowing that it is okay to splurge. It is okay to spend extra money. It is okay to stop cutting corners at every single turn.
You remember back to the days when each month was a struggle to make ends meet. That is not the life that you live anymore; you live a completely different life. And now, it is okay to splurge.
And to be very honest, for most people, once they become financially secure, it is actually really, really hard for them to loosen that tight fist on their money and start spending it.
22. Same Page with Finances with Spouse or Significant Other
They share the same money vision and together they set smart financial goals. All of their decisions are made together.
Did you get that keyword??? Together. Meaning with the other person.
While they may not agree on every single line item of their budget or how they spend money individually, they still set aside money for each of them to spend as they please. Around here at Money Bliss, we call this money a slush fund.
Because at the end of the day, as a couple, they know they are still making progress in the right direction for the long term. So, these couples do not worry about the short term of how you spend your $100 each month if you are reaching your goals and that happens once financial security sets in.
23. Net Worth Grows Significantly Each Year
If your net worth does not grow significantly each year, then you got a problem.
A financially secure person knows their net worth and has systems in place to keep it growing significantly each and every year.
It’s not just one or two percentage points typically, you can expect a much higher rate of growth of 8-10%. Once your net worth increases, the bigger the bucket for the percentage of growth.
24. Credit Cards are Paid in Full
Financial security means you were able to pay your credit card bill in full each and every month without blinking. This is a mantra of a financially secure person.
They chose to use their credit cards wisely so they can get points, cash back, and travel benefits.
But, they are also cognizant that each and every month that credit card is paid off in full; this type of person will not carry a credit card balance for any reason. Period.
25. Prepared for Large Purchases
Nothing states financial security more than being able to go out and replace $5000- $10,000 worth of appliances or home repairs or something similar.
A financially secure person realizes that they have to be prepared for large purchases since they are going to happen.
It is only a matter of when a big purchase will happen.
This person is consistently setting money aside in a sinking fund for those large purposes. In our house, we like to call it the big murph fund.
We know that it may be a small remodel project, an appliance that needs to get fixed or looking at replacing a car. Many items can fall under this big murph fund umbrella. For us, we do not set aside money for each of those purposes in their own sinking funds because then we would not able to maximize our investments.
Instead, we estimate how much money is likely needed and set aside for large purchases that are likely to happen in the next one to two years.
Ways to Save $5000:
26. Your Health Matters
Financial stability means that you are able to spend money on your health and it is a priority for you and your household.
You start realizing the benefits of taking care of your body, eating properly, and managing your health in better ways.
The light bulb starts going off and says slaving at my work for 60 to 80 hours a week may not be worth it. While the income may be great, a financially stable person may feel like they are killing themselves inside for the benefit of others.
A financially secure person knows that their health matters more than money does.
You are more likely to spend money on organic produce because you know it is better for your body. You consistently review to see if you are spending your time in ways that benefit your overall health.
27. Bad Money Habits Are a Thing of the Past
We have all had them.
We have all made stupid money mistakes.
And the best part is a financially secure person has learned from their bad money habits and made changes so they never happen again.
All of the things that they used to do, they don’t do anymore. Bad habits are something that happened in the past. While they may regret it, which is absolutely okay and part of working through the process to make further progress.
Their past mistakes are not going to hold them back from their future self and build solid money habits.
28. Giving Money is Generous
When you are able to give 10% of your income and not be panicked about making ends meet, that is when you know that you have reached a higher level of financial security.
Giving money is generous.
It is something that helps society come together and as a community making the world a better place.
By you being able to give money will help somebody else become a better version of themselves. We have all had others that have helped us.
By giving money, you can pay it forward. It can be something as simple as paying for the people behind you. It could be something grand like having a building named after you because you made a massive donation.
The size of the giving does not matter. It is the fact that you decided and made the conscious decision to start giving your money.
29. People Ask You about Money Questions
When others start looking towards what you have accomplished in your financial journey, that is when you know you have created an environment of solid money management skills.
People will start coming to you asking questions on how they can improve their money situation. And that is fabulous!
That means that others view you as being financially secure and stable in your personal finances. You deserve a pat on the back and motivation to keep up the hard work.
30. Happy With Your Financial Path
Remember that saying, “If you are happy and you know it, clap your hands.” Well, as a financially secure person, it is when you wake up and look at your overall financial picture and say, “You know what, I’ve got this, I’m on the right path,” and you put a big grin on your face. And you pat yourself on the back.
As a financially stable person, you are proud of what you have overcome, the difficult challenges you faced, and now you are excited about where the next step is going to take you and your future.
It is not roses and happiness the entire way; there are ups and downs along your path that got you to a financially stable place.
But deep down you know that you are on a stable future with a solid path.
31. You Know You are In Control of Your Money
This type of person knows exactly where their money goes.
They are in control of their money; their money doesn’t control them.
They make the decisions on how, when, why, and where they spend money.
They are not told by outsiders how to manage their money. A financially stable person has control over their money and in the long run, it opens up the doors of opportunity.
This is a sign of financial independence.
How Much Money is Financially Stable?
How much money do you need to be financially stable?
This will depend on everybody’s personal situation.
If you are single and only providing for your one household, the amount of money that you need is much less than a family of six to eight people. In view of that fact, the more people that you’re responsible for, the more money that you need to become financially secure.
Let’s put some number on the question of how much money is financially stable.
3-6 months of expenses
Positive net worth
No debt (or a solid plan to get out of debt)
Able to give 5% of your income
Saving at least 20% of your income
$100k of F-you money (read JL Collins book for terminology)
Increasing saving percentage each year
At a bare minimum, you could estimate to need at least $25,000 for a single person or $100,000 for a family of four.
These assumptions include you continuing to live below your means and not regressing from the progress you made.
However, most people feel more financially secure when their net worth hits $250,000 or $500,000. Once you hit millionaire status, you are financially secure.
Are you Ready to Move from Not Financially Stable to Financial Stability?
You are in charge of your destiny.
You are able to go from one place to another, but you have to be willing to take the jump, take the risks, and seize opportunities.
So if you are not sure that you are ready to move on to financially stable, you need to be financially sound first. For now, save this post and come back once you are ready to move to the next step of becoming financially stable.
If you are ready to move to financial stability, then you need to start today and make all of these habits of somebody who is financially stable a part of your life.
There is no “Oh, I’m gonna wait till tomorrow.” Because then you are just going to keep putting it off. Tomorrow needs to become today.
The sooner that you can become financially stable, the better off that you will be.
Procrastination is just like having a plan, but not setting it into motion. You actually need to take action and start today. Enough planning, enough procrastination.
Start slow with easy habits. A good habit here and there. Keep building on those habits and you will slowly step-by-step learn how to become a financially stable person.
It does not take a huge monumental stream of income to achieve financial stability. All it takes is perseverance to make better yourself.
You can become the next millionaire with no money!
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
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.
A zero-coupon certificate of deposit or zero-coupon CD is a type of CD that’s purchased at a discount and pays out interest at maturity. Zero-coupon CDs can offer higher yields than standard CDs for investors who have the patience to wait until maturity to collect their original deposit and the interest earned.
Zero-coupon certificates of deposit are similar to bonds in that both are considered lower-risk, fixed-income instruments, but they serve different purposes in a portfolio. Understanding how a zero-coupon CD works can make it easier to decide if it’s a good investment for you.
What Is a Zero-Coupon CD?
To understand zero-coupon CDs, it’s important to know how a regular certificate of deposit works. A CD account, also referred to as a time-deposit or term-deposit account, is designed to hold money for a specified period of time. While the money is in the CD, it earns interest at a rate determined by the CD issuer — and the investor cannot add to the account or withdraw from it without penalty.
CDs are FDIC or NCUA insured when held at a member bank or credit union. That means deposits are insured up to $250,000.
CDs are some of the most common interest-bearing accounts banks offer, along with savings accounts and money market accounts (MMAs).
A zero-coupon certificate of deposit does not pay periodic interest. Instead, the interest is paid out at the end of the CD’s maturity term. This can allow the purchaser of the CD to potentially earn a higher rate of return because zero-coupon CDs are sold at a discount to face value, but the investor is paid the full face value at maturity.
By comparison, traditional certificates of deposit pay interest periodically. For example, you might open a CD at your bank with interest that compounds daily. Other CDs can compound monthly. Either way, you’d receive an interest payment in your CD account for each month that you hold it until it matures.
Once the CD matures, you’ll be able to withdraw the initial amount you deposited along with the compound interest. You could also roll the entire amount into a new CD if you’d prefer.
Remember: Withdrawing money from a CD early can trigger an early withdrawal penalty that’s typically equal to some of the interest earned.
How Do Zero-Coupon CDs Work?
Ordinarily when you buy a CD, you’d deposit an amount equal to or greater than the minimum deposit specified by the bank. You’d then earn interest on that amount for the entirety of the CD’s maturity term.
With zero-coupon CD accounts, though, you’re purchasing the CDs for less than their face value. But at the end of the CD’s term, you’d be paid out the full face value of the CD. The discount — and your interest earned — is the difference between what you pay for the CD and what you collect at maturity. So you can easily see at a glance how much you’ll earn from a zero-coupon CD investment.
In a sense, that’s similar to how the coupon rate of a bond works. A bond’s coupon is the annual interest rate that’s paid out, typically on a semiannual basis. The coupon rate is always tied to a bond’s face value. So a $1,000 bond with a 5.00% interest rate has a 5.00% coupon rate, meaning a $50 annual payout until it matures.
Real World Example of a Zero-Coupon CD
Here’s a simple example of how a zero-coupon CD works. Say your bank offers a zero-coupon certificate of deposit with a face value of $10,000. You have the opportunity to purchase the CD for $8,000, a discount of $2,000. The CD has a maturity term of five years.
You wouldn’t receive any interest payments from the CD until maturity. And since the CD has a set term, you wouldn’t be able to withdraw money from the account early. But assuming your CD is held at an FDIC- or NCUA-member institution, the risk of losing money is very low.
At the end of the five years, the bank pays you the full $10,000 face value of the CD. So you’ve essentially received $400 per year in interest income for the duration of the CD’s maturity term — or 5.00% per year. You can then use that money to purchase another zero-coupon CD or invest it any other way you’d like.
💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.
Tips When Investing in a Zero-Coupon CD
If you’re interested in zero-coupon CDs, there are a few things to consider to make sure they’re a good investment for you. Specifically, it’s important to look at:
• What the CD is selling for (in other words, how big of a discount you’re getting to its face value)
• How long you’ll have to hold the CD until it reaches maturity
• The face value amount of the CD (and what the bank will pay you in full, once it matures)
It’s easy to be tempted by a zero-coupon certificate of deposit that offers a steep discount between the face value and the amount paid out at maturity. But consider what kind of trade-off you might be making in terms of how long you have to hold the CD.
If you don’t have the patience to wait out a longer maturity term, or you need the money in the shorter term, then the prospect of higher returns may hold less sway for you. Also, keep in mind what kind of liquidity you’re looking for. If you think you might need to withdraw savings for any reason before maturity, then a standard CD could be a better fit.
Comparing zero-coupon CD offerings at different banks can help you find one that fits your needs and goals. You may also consider other types of cash equivalents, such as money market funds or short-term government bonds if you’re looking for alternatives to zero-coupon CDs.
Recommended: How to Invest in CDs: A Beginner’s Guide
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Pros of Zero-Coupon CDs
Zero-coupon CDs have some features that could make them more attractive than other types of CDs. The main advantages of investing in zero coupon certificates of deposit include:
• Higher return potential than regular CDs
• Guaranteed returns, since you’re unable to withdraw money before maturity
• Suited for longer-term goals
• Can be federally insured
Zero-coupon CDs are lower-risk investments, which can make them more appealing than bonds. While bonds are considered lower-risk investments generally, if the bond issuer defaults, then you might walk away from your investment with nothing.
A zero-coupon certificate of deposit, on the other hand, does not carry this same default risk because your money is insured up to $250,000. There is, however, a risk that the CD issuer could “call” the CD before it matures (see more about this in the next section).
Cons of Zero-Coupon CDs
Every investment has features that may be sticking points for investors. If you’re wondering what the downsides of zero-coupon CDs are, here are a few things to consider:
• No periodic interest payments
• No liquidity, since you’re required to keep your money in the CD until maturity
• Some zero-coupon CDs may be callable, which means the issuer can redeem them before maturity, and the investor won’t get the full face value
• Taxes are due on the interest that accrues annually, even though the interest isn’t paid out until maturity
It may be helpful to talk to your financial advisor or a tax professional about the tax implications of zero-coupon CDs. It’s possible that the added “income” from these CDs that you have to report each year could increase your tax liability.
How to Collect Interest on Zero-Coupon CDs
Since zero-coupon CDs only pay out at interest at the end of the maturity term, all you have to do to collect the interest is wait until the CD matures. You can direct the bank that issued the CD to deposit the principal and interest into a savings account or another bank account. Or you can use the interest and principal to purchase new CDs.
It’s important to ask the bank what options you’ll have for collecting the interest when the CD matures to make sure renewal isn’t automatic. With regular CDs, banks may give you a window leading up to maturity in which you can specify what you’d like to do with the money in your account. If you don’t ask for the money to be out to you it may be rolled over to a new CD instead.
How to Value Zero-Coupon CDs
The face value of a zero-coupon CD is the amount that’s paid to you at maturity. Banks should specify what the face value of the CD is before you purchase it so you understand how much you’re going to get back later.
In terms of whether a specific zero-coupon CD is worth the money, it helps to look at how much of a discount you’re getting and what that equates to in terms of average interest earned during each year of maturity.
Purchasing a $10,000 zero-coupon CD for $8,000, for example, means you’re getting it at 20% below face value. Buying a $5,000 zero-coupon CD for $4,500, on the other hand, means you’re only getting a 10% discount.
Of course, you’ll also want to keep the maturity term in perspective when assessing what a zero-coupon CD is worth to you personally. Getting a 10% discount for a CD with a three-year maturity term, for example, may trump a 20% discount for a five-year CD, especially if you don’t want to tie up your money for that long.
The Takeaway
Investing in zero-coupon CDs could be a good fit if you’re looking for a lower-risk way to save money for a long-term financial goal, and you’d like a higher yield than most other cash equivalents.
Zero-coupon CDs are sold at a discount to face value, and while the investor doesn’t accrue interest payments annually, they get the full face value at maturity — which often adds up to a higher yield than many savings vehicles. And because the difference between the discount and the face value is clear, zero-coupon CDs are predictable investments (e.g. you buy a $5,000 CD for $4,000, but you collect $5,000 at maturity).
As with any investment, it’s important for investors to know the terms before they commit any funds. For example, zero-coupon CDs don’t pay periodic interest, but the account holder is expected to pay taxes on the amount of interest earned each year (even though they don’t collect it until they cash out or roll over the CD).
If you’re eager to earn a higher rate on your savings, you’ve got a lot of options to explore — including a high-yield bank account or a regular CD.
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FAQ
What is a coupon on a CD?
The coupon on a CD is its periodic interest payment. When a CD is zero coupon, that means it doesn’t pay out interest monthly or annually. Instead, the investor gets the full amount of interest earned paid out to them when the CD reaches maturity.
Is a certificate of deposit a zero-coupon bond?
Certificates of deposit and bonds are two different types of savings vehicles. While a CD can be zero-coupon the same way that a bond can, your money is not invested in the same way. CD accounts also don’t carry the same types of default risk that bonds can present.
Are CDs safer than bonds?
CDs can be safer than bonds since CDs don’t carry default risk. A bond is only as good as the entity that issues it. If the issuer defaults, then bond investors can lose money. CDs, on the other hand, are issued by banks and typically covered by FDIC insurance which generally makes them safer investments.
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A lot of would-be sellers aren’t selling their homes, and it’s because of the lock-in effect.
Throughout the pandemic and several years before, mortgage rates were really low. But the Federal Reserve raised interest rates to tame inflation, sending mortgage rates up along with them. So everyone who locked in a low mortgage rate before they soared are sitting on a gold mine. Their fixed debt is lower than what anyone could get in our current economic environment. Who wants to give that up?
Nobody, unless they have to. And some people do, because there are sellers out there who want to off-load their homes, which is why there were more listings this year than last year. Still, this year’s spring selling season was muted, to say the least. And it turns out that about 87% of outstanding mortgage debt has a rate below 6%, according to Realtor.com’s analysis of data from the Federal Housing Finance Agency, as of the fourth quarter of last year. The mortgage rate to outstanding share of mortgages ratios are as follows:
Below 3%: 22.20%
3% to 4%: 35.90%
4% to 5%: 18.90%
5% to 6%: 9.70%
Above 6%: 13.20%
“Altogether, this means that more than half of outstanding mortgages have a rate of 4% or lower, and more than three-quarters have a rate of 5% or lower,” Realtor.com said. Meanwhile, the average 30-year fixed daily mortgage rate is 7.04%, and the weekly mortgage rate is 6.95%.
“As a result, many homeowners have chosen to stay put, holding off on listing their home for sale until mortgage rates come down,” the analysis read. “Based on a recent survey, 82% of those looking to sell their home and purchase a new one feel ‘locked-in’ by high mortgage rates.”
Think about it like this: If you were to buy a $600,000 home, after putting 20% down, with a 3% mortgage rate, your monthly payment would be about $2,024. With the same circumstances, but a 7% mortgage rate, your monthly payment would be roughly $3,193; (neither calculation includes taxes or insurance). That’s a big difference. Not to mention home prices have skyrocketed, too; in March, national home prices hit their ninth all-time high over the past year. So it’s not necessarily true that a $600,000 home three years ago would still be valued at as much today.
Either way, there are several estimates on the lock-in effect, though they all tend to indicate the same thing: that a large share of outstanding borrowers have a below-market mortgage rate. According to Apollo Global Management chief economist Torsten Slok, 63% of outstanding mortgages have interest rates below 4% (before the pandemic, it was only 38%, he said). For its part, Capital Economics has the average rate of all outstanding mortgages pinned at about 4%.
So what will it take for people to sell? Apart from the usual reasons—marriage, divorce, kids, career changes, or death—some suggest the magic mortgage rate might be anything below 6%. As of last month, Fannie Mae predicts the average 30-year fixed mortgage rate will end the year at 7%, for one. And it seems the Fed has only penciled in a single interest-rate cut this year.