Distance learning can offer students the flexibility to balance coursework with working, taking care of family, and other responsibilities. The cheapest online colleges can help you minimize student loan debt while working toward a degree and career advancement.
Online colleges offer degrees across a wide range of academic disciplines. In 2022, around 26% of college students were taking online classes exclusively.
This guide will explore online college costs, the least expensive online colleges, and strategies to pay for an online degree.
Overview of Online College Costs
Whether studying in-person or online, college costs typically include more than just tuition.
Students taking online classes may have to pay technology fees and purchase books and materials depending on their area of study. The cost of an online degree can also vary by institution and in-state vs. out-of-state residency.
Here’s a closer look at the main cost considerations for online colleges.
Recommended: Guide to Paying for College
Tuition and Fees for Online Programs
Like traditional college, tuition and fees account for most of the cost of attending online college.
Tuition usually varies based on enrollment status or, in other words, whether you’re a full-time vs. part-time student. Part-time students pay per credit hour, whereas full-time students taking 12 to 18 credits per semester may pay a flat rate.
Online programs may also include fees on top of tuition, such as a technology or distance learning fee, to access virtual resources and technical support services.
Cost Comparison: Online vs. On-Campus
Students considering studying online vs. on-campus may ask which is cheaper. In short, it depends on the institution, degree program, and location, but studying on campus tends to be more expensive.
For example, a first-year, in-state undergrad at Penn State’s University Park campus would pay $19,672 in tuition and fees for the 2024-2025 academic year. Meanwhile, an online undergraduate student would be charged $7,678 per semester, or $15,356 for the academic year.
Looking at tuition and fees is just part of the cost comparison. The total cost of attendance for studying on campus could include transportation expenses, room and board, and a meal plan — all costs that may not be incurred with the cheapest online colleges.
In-State vs. Out-of-State Online Tuition
The cost of online college can vary based on where you live.
At public institutions, students with in-state residency may benefit from subsidized tuition, even for online degree programs. However, most private schools do not differentiate tuition costs between in-state and out-of-state students.
Recommended: In-State Tuition: A Look at Establishing Residency
10 Affordable Online Colleges to Consider
Looking for the cheapest accredited online colleges? Here’s a short list of affordable online colleges to consider.
Factors Contributing to Lower Online College Costs
Why are online colleges cheapest for earning a degree? For starters, traditional colleges with in-person learning offer a range of experiences and infrastructure for students that online colleges don’t.
With online college, students have a much wider range of institutions and degree programs to choose from, increasing their options for an affordable education. Taking classes from home also avoids having to relocate and pay for moving costs.
Here are some additional factors contributing to lower online college costs.
No Campus Facilities or Housing
Dormitories, campus quads, athletic facilities, and many other facilities that define a quintessential college campus require a considerable budget to maintain. Besides tuition, students taking classes in-person may be required to pay for on-campus housing and meal plans for a portion of the full duration of their enrollment.
Meanwhile, students enrolled in online college are typically spared from paying housing and campus facility costs, including parking and recreation fees.
Recommended: Cheapest States to Go to College in the United States
Lower Administrative Overhead
Besides teaching faculty, traditional colleges require onsite staff to support student life on campus. This may include health services, campus events, dining services, and other areas related to student well-being.
With less support staff, online colleges have comparatively less overhead cost to meet the needs of their students.
Technology and Course Delivery Methods
Online colleges may charge additional technology fees for students enrolled in distance learning. However, online students could save on the cost of books and materials if primarily using digital resources for their coursework.
Taking classes online vs. in-person lectures can save on transportation costs, too, which average $1,360 annually for students who commute to college.
Flexible Scheduling and Self-Paced Options
Self-paced online programs allow students to watch lectures and complete assignments at their own speed. This approach can make it possible to take online classes while working or juggling family commitments, helping to pay for school and save on childcare costs.
Additional Cost-Saving Strategies
Though online college can be more affordable, students might consider other options for lowering costs.
Wondering how to pay for college? Here are some additional ways to reduce the cost of going to online college.
Transfer Credits and Prior Learning
Students who previously attended another institution could save on their online education by transferring credits. Transferring college credits usually involves an application fee or enrollment fee, but that’s still cheaper than taking the credit hours anew.
Financial Aid and Scholarships
Around 87% of college students receive some form of financial aid. Most colleges with free tuition or income-based tuition are in-person institutions, though students enrolled in online programs may qualify for financial aid and scholarships to help cover the cost of tuition.
When browsing online programs, keep in mind that colleges and universities must be accredited for students to be eligible for federal student aid, such as Pell Grants and federal student loans. Online students may also leverage private student loans and state and institutional financial aid in the form of scholarships or grants.
Already in the workforce? There are jobs that pay for your degree through scholarships or tuition reimbursement that could be a fit for your academic and professional goals.
Recommended: How to Complete the FAFSA Step by Step
Accelerated or Competency-Based Programs
An online competency-based or accelerated program is another option for students to learn at their own pace instead of following a set semester schedule.
Generally, students can choose when to take an assessment to demonstrate they’ve mastered a competency, potentially earning their degree faster and at a reduced cost.
The Takeaway
The cheapest online colleges can make earning a college degree more affordable. Besides the cost of tuition and fees, financial aid and long-term career goals are important considerations when comparing schools and degree programs.
To pay for your online education, you can use cash savings, grants, scholarships, and student loans.
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.
FAQ
What is the cheapest accredited online college?
The cheapest accredited online college on our list is University of North Carolina at Pembroke. Note that the cheapest online college can differ based on a student’s chosen program, credit hours, and residency status.
Are cheap online degrees worth it?
A cheap online degree can offer a flexible and affordable path to higher education and career advancement. When evaluating online degrees, consider the program’s cost, curriculum, and reputation.
How can I maximize cost savings for an online degree?
You can save on online college by enrolling in a program offering cheaper in-state tuition or self-paced learning to earn a degree in less time.
Do employers value cheap online degrees?
Employers will value a cheap online degree the same as a traditional degree if it’s from an accredited institution and meets the same academic standards. Earning an online degree while working also demonstrates time management skills to potential employers.
Photo credit: iStock/DisobeyArt
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Businesses that need cash quickly but don’t have strong credit will sometimes turn to an alternative type of funding called a merchant cash advance (MCA). With an MCA, a financing company gives you an upfront sum of cash that you repay using a percentage of your debit and credit card sales, plus a fee.
An MCA can be helpful for covering cash flow shortages or short-term expenses, but if you end up taking out more than one merchant cash advance, you can end up paying different (and potentially high) interest rates and fees for each. Plus, you have to deal with different payment schedules for each MCA.
A merchant cash advance consolidation is an option that lets you roll up all of those advance payments into one. Ideally, an MCA consolidation has the potential to reduce what you’re paying in interest and fees. Here’s what you need to know about this type of consolidation loan.
What Is a Merchant Cash Advance?
Not every business qualifies for a traditional bank loan. Perhaps it hasn’t been in business long enough to be eligible, or maybe it doesn’t meet the credit requirements for a small business loan. That’s when a merchant cash advance may be useful.
An merchant cash advance is not a loan, but rather an advance on future sales. To determine eligibility, MCA providers may not rely heavily on criteria like time in business and/or credit scores, but instead focus on revenues. That can make it easier to get than other types of financing.
How MCAs Work
When you get an MCA, you receive a lump sum payment. Typically, MCAs express the interest they charge as a factor rate (often ranging from 1.1 to 1.5) rather than as a percentage. The factor rate does not include any additional fees the merchant cash advance company may charge you, such as administrative or underwriting fees.
How MCA Repayment Works
The repayment on an MCA works differently than other types of business loans. Typically, the MCA provider automatically deducts a daily (or weekly) percentage of your debit and credit card sales until the advance is repaid in full. Repayment periods can range anywhere from three to 18 months. Generally, the more you make in credit card sales, the faster you’ll repay the advance.
The downside is that MCAs tend to have much higher fees and interest rates than traditional small business loans, making them a costly financing option.
When you convert factor rates plus fees into an annual percentage rate (APR), the APRs on merchant cash advances can run as high as 350%, depending on the lender, size of the advance, fees, business revenue, and how long it takes to repay the advance.
What Is Merchant Cash Advance Consolidation?
A small business owner might take out a merchant cash advance to see their way through a slow period. Then, when they struggle with repayments, they may apply for another MCA to help repay the first. This is a process known as loan stacking. The company could then end up with multiple repayment schedules and paying different factor rates and different amounts for each advance.
A merchant cash advance consolidation rolls multiple MCAs into a single new loan. The consolidation loan typically pays off your existing MCAs and allows you to make one payment, often monthly, to the consolidation lender. Ideally, the consolidation loan will have a lower interest rate than the average of the multiple advances.
Recommended: Loans for Sole Proprietors
Signs You Need Consolidation
Signs you need a merchant cash consolidation include:
• Multiple MCA loans: If your business has taken out many MCAs, a consolidation loan can help you streamline your payments and possibly save money on interest.
• High interest rates: MCAs often come with steep fees, so consolidating into a lower-rate loan could reduce overall costs.
• Falling behind on payments: Missing or struggling with payments is a strong indicator consolidation is necessary.
However, there are a few things to consider before you jump into MCA consolidation. One is whether or not your existing MCA lenders will charge you a prepayment penalty fee if you pay off your advances early. You’ll also want to find out if there are any upfront fees you have to pay for the new consolidation loan, since this can eat into your savings.
If, after running all the numbers, it looks like you can save money and streamline repayment, it may be a good time to consider a merchant cash advance consolidation.
Recommended: How Does Debt Consolidation Work?
What to Consider Before Applying
Before applying for a consolidation loan, you’ll want to look at what you’re currently paying in interest and what you’d qualify for with a new loan. Also, consider any fees for the new loan and any payoff penalties you’ll owe your current lenders. If, once you crunch the numbers, your total debt hardly goes down, there’s probably no sense in taking on a new consolidation loan.
When deciding whether it makes sense to do an MCA consolidation, you also want to look at the repayment period and what your payments with the new loan will be. A shorter repayment period can mean larger payments that you might not be able to afford. And, while a longer repayment period can mean smaller payments, it will likely mean paying more in total interest.
Examining the options can help you find the best path forward for your business.
Potential Drawbacks and Risks
Merchant cash advance (MCA) consolidation loans can provide relief, but they come with potential drawbacks and risks, including:
• Extending the repayment period, which potentially increases the overall interest costs.
• Paying high fees, which could negate the benefits of combining advances.
Additionally, if you’re consolidating to manage cash flow, it could be a sign of deeper financial issues, and relying on more debt may worsen the situation.
Refinancing vs Consolidation
If you’ve heard of business loan refinancing, you may think it’s the same as merchant cash advance consolidation, but these aren’t exactly the same.
It’s true that both can potentially lower your interest rate and/or change your payment term. However, when you refinance, you’re replacing one MCA with a new one or with a small business term loan. When you opt for an MCA consolidation, you’re rolling multiple MCAs into a new MCA or other type of business loan.
Recommended: Refinancing Your Student Loans While Starting a Business
Types of Consolidation Loans
Lenders may have different approaches to help you with consolidating your loans. Some will buy out the loan and pay it off directly, while others will lend you the money, after which it’s your responsibility to pay off your existing MCAs.The following types of loans can be used to consolidate your MCAs:
Merchant Cash Advance
If you’ve taken out multiple MCAs, it’s likely because your business doesn’t have great credit and may not qualify for other types of loans. If that’s the case, you might consider a new, larger merchant cash advance to consolidate your existing MCAs, ideally with more favorable terms.
Be aware that you will likely have a short repayment period, perhaps between a few months and three years.
Online Lenders
Another consolidation option if you don’t have excellent credit is taking out a consolidation loan with an online lender. Interest rates may be lower than with a merchant cash advance and repayment terms may be longer. A longer repayment term typically means your monthly payment will be lower; however, you’ll pay more in interest overall than with a shorter repayment term.
SBA Loans
SBA loans like the 7(a) program can be used to consolidate business debt that is approved by your lender, if you qualify. Repayment terms can be up to 25 years, and rates on SBA loans are among the lowest of any financing option for businesses.
Traditional Bank Loans
If you’ve been able to build your business or personal credit since taking out the MCAs, you may qualify for a bank loan with lower rates and longer repayment terms. You can then use the proceeds of the loan to pay off your existing MCAs.
The Takeaway
If you feel like you’re drowning because you’re paying too much, too often, for multiple merchant cash advances, consolidating with a new advance or small business loan may be a solution that could help you lower your costs and roll everything up into one monthly payment.
If you’re seeking financing for your business, SoFi can help. On SoFi’s marketplace, you can shop top providers today to access the capital you need. Find a personalized business financing option today in minutes.
Get personalized small business financing quotes with SoFi’s marketplace.
FAQ
What is a merchant cash advance consolidation?
A merchant cash advance (MCA) consolidation combines multiple merchant cash advances into a single MCA with more manageable repayment terms. Ideally, you’ll receive better rates and terms with your new merchant cash advance.
What happens if I don’t repay my merchant cash advance?
If you don’t repay your merchant cash advance (MCA), the lender may increase withdrawal amounts, freeze business accounts, or pursue legal action. Your personal and business assets could be at risk, and your credit score could be negatively impacted. This could affect financing options down the line.
Why consolidate your merchant cash advances?
The main reason to consolidate your merchant cash advance (MCA) is to simplify your payments. Rather than making multiple payments each week or month, you’ll only have to make one. Consolidating could also reduce your interest rate, saving you money over the life of the loan.
Photo credit: iStock/ipopba
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Whether you’re a dedicated DIYer or prefer to lean on professional guidance, the truth is clear: smart financial planning can save you a lot of money over time.
Below, I’ll share some recent examples of tactical planning moves I participated in, including how much money was saved.
COVID Panic
In March 2020, you could be forgiven for thinking: “the world is ending, and I want to sell everything.”
But with proper perspective and an investment policy statement – both hallmarks of sound financial planning – many investors stayed the course.
They rode the stock market down more than 30% from peak to trough. Ouch. Nevertheless, they rebalanced along the way, selling stable assets (like bonds and money market) to buy stocks. This is not natural behavior – in fact, it’s the opposite of natural (“run from the threat” not “run toward the threat”). It’s learned behavior through experience and education.
In the end, while others made portfolio mistakes that cost them 10%, 20%, or more – permanent impairment of capital that can never be recovered – the intelligent investor has a better portfolio than if the COVID crash hadn’t occurred.
What’s the value of a 10% mistake on $1M?
Bring Me a Higher Yield
A friend-of-the-blog recently sold his successful small business for ~$10M or so. Not your everyday event, to be certain. But it’s more common than I realized.
We sat down to spitball some ideas, and my honest advice to him was:
Put together a financial plan, which details future planned inflows and outflows of money. This would include some well-deserved near-term spending!
Pick an asset allocation that corresponds with that plan.
Then, dollar cost averages the money into that asset allocation (e.g. 4 large tranches of investment over 12 months, or something similar)
The problem: the idea of investing millions into the stock market concerned him. I believe good investing education can help this problem, but that education doesn’t occur overnight.
As we discussed next steps, I asked him, “Where is the money right now?”
The answer? In a large US bank savings account, earning 0.05% interest per year. That’s $5000 in annual interest on a $10M deposit.
So while we continued are long-term conversation about investing in the stock market, I gave him some vital near-term advice: seek out a higher yield via a brokerage money market fund.
In the ~18 months since I gave him that advice, his average yield has been ~4.5 – 5.0%. That’s ~$475,000 in interest on a $10M deposit.
Yes – a simple tip to be sure. But sometimes financial planning is all about identifying the simple fixed in your financial ecosystem that will provide $475,000 per year instead of $5,000.
He bought my coffee that day. Don’t tell Suze Orman.
The Car Loan
One of my clients bought a new car a few months ago and came to me with a simple question:
“Should I take advantage of the 0% financing they’re offering me?”
$40,000 cash out of pocket, or a $40,000 loan with zero interest?
The math is simple:
If she takes the loan, she can keep her $40,000 in a high-yield account (such as our previously mentioned money market account) and earn ~$1500 – $2000 per year in interest. There’s no downside. There’s no loan interest accruing against her.
$2000 a year isn’t life-changing money. But it’s easy money. Small, easy percentage points can move the needle over long periods of time.
Sneak Through the Backdoor
Another client of mine came to me as follows:
Early 30’s couple
High earners (total income ~$350,000 per year)
Using 401(k) accounts wisely, putting lots of extra money into a Joint Taxable brokerage account
I asked them if they’d looked into saving money in an IRA…
“Yep, we looked into it, but we earn too much money.”
They were partially correct. They do earn too much for “normal” IRA contributions, but they’re the perfect candidates for backdoor Roth IRA contributions.
I think we can conservatively calculate that backdoor Roth contributions will earn this couple an extra $100,000+ over the next 30 years.
Which House?
Another client lives in the greater Washington D.C. area and, with her growing family, faces an interesting question?
Where should we buy our forever home?
Their three options – Washington D.C. itself, Maryland, or Virginia – each come with their own financial pros and cons. We helped her weigh the following:
The cost of the homes themselves (e.g. how far a dollar goes)
The long-term cost of property and school taxes
The state tax benefits of home ownership
The impact of state income taxes on their earnings over the coming decades
The impact of state capital gains taxes on their long-term investing
Of course, this family must pick a home that’s right for their lifestyle. Finances come second.
But the maximum vs. minimum we calculated puts their range of possible at a net present value over $500,000. In other words, “House A” in the most expensive locality would cost them $500,000 more than that same house in the least costly locality, as measured in today’s dollars, over the next 30 years.
Then, as always, we should ask how our lifestyle and life plan might change with an extra $500,000?
The Value of a Basis Point
Portfolio reviews are vital.
If an expert looks at your investments and says, “You can accomplish the same asset allocation as you already are but could save 20, 30, or 50 basis points if you do it this way.” …what’s the value of that recommendation?
FYI: A basis point equals 0.01%. So, 50 basis points equals 0.50%
Smart, simple investing strategies don’t need to be overly expensive. While professional financial planners do need to charge for their time and expertise, they can and should also save their clients money by keeping investing costs low.
What’s a basis point worth?
Imagine a simple scenario. An average investor might invest for 35 years, socking away $10,000 per year and achieving a long-term average return of 8.00% per year. This investor’s final portfolio would be worth $1.86M. And in this case, each extra basis point of expenses along the way decreases the final portfolio value by $4500.
11 basis points adds up to $50,000.
The lesson is simple: keep fees low where you can, and make sure you’re getting value above and beyond the basis points you are paying.
What’s a “Cash Balance Plan?”
Finanical planning is a deep subject area, with many nooks and crannies I haven’t even heard of yet. One such example occurred this year, when my colleagues recommended a “cash balance plan” to one of my clients.
He’s a successful solopreneur who last year grossed about $700,000 in income. A lot of those dollars were taxed at the highest possible levels. His effective tax rate was north of 40%.
A cash balance plan is a defined benefit retirement account (whereas a 401(k) is a defined contribution account). In other words, it is like a self-funded pension.
Cash balance plans are especially beneficial when all of the following are true:
Solo business owners, or with a very small staff.
Business owners with high incomes who would benefit from putting away more tax-deferred dollars.
Business owners who are higher in age (as you’ll see below, the annual contribution limits are very high for older business owners).
This client can contribute about $200,000 into his cash balance plan this year, saving ~$80,000 on his 2024 tax bill. Those savings are likely to increase every year between now and his retirement.
Of course, he will eventually have to pay taxes on those dollars when he withdraws them in retirement. But in the meantime, he benefits from tax-free growth and, more importantly, from the flexible and planned nature of retirement withdrawals; we will help him plan those withdrawals at a much lower than ~40% tax rate.
Ugly Annuities
I dove deeply on annuities in episode 86 of The Best Interest podcast.
In short, the vast majority of annuities are:
Vastly over-costed.
Disappointing in terms of return on investment.
For that reason, 99% of us are best off never touching annuities in the first place. But what if you’ve already bought an annuity – what should you do then? As always, an essential part of financial planning is to “let the numbers be your guide.”
Annuities typically have “surrender fees,” which charge the owner an extra fee to exit the contract. These fees range up to 10% of the total annuity amount (e.g. $100,000 on a $1M annuity), and typically decay in size as the annuity matures. It’s common to see, for example, an 8% surrender charge in Year 1 of the annuity decay to zero surrender charge after Year 10.
Again, I have a client example. I’m working with an gentlemen who owned multiple annuities at various maturity level. We analyzed each one and showed him the potential upsides and downsides of dissolving those annuities, paying surrender fees, and then investing the proceeds into a moderate investment portfolio.
Together, we created a multi-year schedule to flip his portfolio to the light side of the force.
In the long run – say, over the next 20 years – I can confidently say he’ll save 1.5% per year on fees. And I can conservatively predict his new allocation will outperform the annuities by 3% per year (up to 5-6% per year if I’m being less conservative).
On his $750,000 portfolio over those 20 years, my conservative assumptions above lead to an extra $1.3M in compounding in his pocket.
The Power of Financial Planning
Smart financial planning is not about outperforming the stock market. Instead, it’s about identifying places in your personal financial ecosystem where you can and should be saving money, pay less taxes, earning better returns, reallocating assets, pay fewer fees, taking advantage of special accounts, etc. etc.
It’s about knowing all the rules of the game, and then playing it effectively. This article showed you just a few examples, including:
Avoiding 6- or 7-figure mistakes when the stock market panics
Earning simple higher yields on large sums of money. 3% on a million bucks is $30,000 per year!
Backdoor Roth contributions to earn someone an extra $100,000+ over 30 years
Optimizing a home purchase to the tune of $500,000 over 30 years
Keep investing fees low, or saving $4500 for every 0.01%
Utilizing complex tools, like a cash balance plan, to save 6- or 7-figures in lifetime taxes
Detangling ugly annuities, resulting in an extra $1M+ over 20 years
These are just a few of many examples, and none of them involved picking the winning stocks.
The real value of financial planning lies elsewhere.
Thank you for reading! If you enjoyed this article, join 8500+ subscribers who read my 2-minute weekly email, where I send you links to the smartest financial content I find online every week. You can read past newsletters before signing up.
-Jesse
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Snapshot: As of September 18, the Federal Reserve cut interest rates by .5%. Although consumers shopping for a mortgage may not see rates come down within the year, people shopping for auto loans or paying off credit card debt may see interest rates come down faster.
On September 18, 2024, the Federal Reserve announced that it was cutting interest rates by .5%. This is the first time the Fed has lowered interest rates since 2020. During that time, the Fed has been raising interest rates to keep inflation in check and prevent a recession.
Although half a percentage point may not seem like a huge cut, it is expected to have an impact and the Fed has indicated that more cuts may be coming later on.
What happens when the Federal Reserve cuts interest rates
In a nutshell, when the Federal Reserve cuts interest rates, it makes it cheaper to borrow money. Here’s how that can directly affect you:
Lower Borrowing Costs: Banks can borrow money from the Fed at a lower cost, and they often pass those savings on to consumers. This means loans for things like cars, homes, or credit cards can have lower interest rates.
Encourages Spending: When borrowing is cheaper, people are more likely to take out loans and spend money. This can help boost the economy because businesses benefit from increased sales.
Investment Boost: Lower rates can also encourage businesses to invest in new projects since financing is cheaper. This can lead to more jobs and economic growth.
Impact on Savings: On the flip side, lower rates can mean less interest earned on savings accounts, which might discourage people from saving money.
So, in short, when the Fed cuts interest rates, it’s aimed at stimulating the economy by making borrowing cheaper and encouraging spending and investment.
Will interest rates keep dropping?
It looks like rates will continue to drop: members of the Federal Reserve’s rate setting committee have said that they expect to see interest rates come down another half a percentage point in 2024 and then another full point in 2025.
How will this affect my debt?
The decrease in interest rates is most likely to have an immediate effect on APR – annual percentage rate. If you’re looking to take out an auto loan or a credit card, APR is what determines the interest on those lines of credit.
If you already have a car loan, this probably won’t affect you. Generally, the APR on a fixed-rate car loan does not change after you take out the loan. It remains constant for the duration of the loan term. However, if you have a variable-rate loan, the APR could change based on market conditions or specific terms outlined in your loan agreement.
If you already have a credit card, it is possible for the interest rates (APR) on your credit card to change even after you get the card. Many credit cards have variable interest rates that can fluctuate based on changes in the prime rate or other benchmarks. Check your card’s terms and conditions to understand how and when rates might change
Will the rate cut help mortgage rates?
Although the rate cut may not affect mortgage rates immediately, it might have more of an impact later on. As it is, mortgage rates have already shown signs of decreasing even before the Fed announced it was making cuts, dropping to an average of less than 6.05%.
If you’re thinking about buying a home, applying for an auto loan or getting a new credit card, lower interest rates could mean this is a better time than before. Before you apply for anything, make sure you check your credit to make sure that you’re ready to qualify for the best interest rates possible.
You can see your FICO score and a free summary of your credit profile with our Credit Snapshot tool.
Do you want to get paid to give advice? A few years ago, I never would have thought that giving advice could turn into a way to make extra money. But after starting my website and sharing what I knew about personal finance, I quickly realized that I could make extra income. It’s amazing how…
Do you want to get paid to give advice?
A few years ago, I never would have thought that giving advice could turn into a way to make extra money. But after starting my website and sharing what I knew about personal finance, I quickly realized that I could make extra income.
It’s amazing how your skills, whether they’re in medicine, cars, law, tech, relationships, or anything else, can become a profitable business. I love helping others and, at the same time, earning money from what I enjoy!
In this article, I’ll go over:
Ways to get paid to give advice
Type of professionals that get paid to give advice
How to get paid giving advice online
How To Get Paid To Give Advice
Here’s a list of 16 ways to get paid to give advice.
1. JustAnswer
JustAnswer is a site that pays people to give advice and answer questions in different fields such as legal, tech, medical, veterinary, antique appraisers, and more.
If you’re an expert in a field that people usually have questions in, you can monetize your expertise on JustAnswer by sharing your expert opinion.
You may be wondering what kind of questions are asked on JustAnswer. Here are a few examples:
How much is my antique worth?
How can I lower my business taxes this year?
What can I do if a sinus infection won’t go away?
How do I fix my car’s alternator?
To get started on JustAnswer, you need to go through an application process (with a background check) and get verified that you’re an expert by providing proof of qualifications like degrees, certifications, or other relevant experience.
Recommended reading: 21 Ways To Get Paid To Answer Questions
2. Start a blog
I run a personal finance blog and share advice all the time (and I get paid for it!). Starting a blog is one of the best ways to share your expertise while creating a reliable source of income.
Sharing your expertise and knowledge with a blog is a great way to diversify your income. You can make money blogging by:
Affiliate marketing (where you get a commission when people make purchases through your links)
Advertising revenue
Sponsored content
Selling services like coaching
Selling products like books or courses
One of the keys to successful blogging is choosing a niche or topic that you’re both passionate about and that has an audience who wants to learn more.
Here are some popular blog niches you can try, depending on your expertise:
Education and career – If you have experience in teaching or career coaching, this niche can focus on helping others with their career goals, job interviews, or study techniques.
Personal finance – Share tips on budgeting, saving, investing, and side hustles. Many people are looking for ways to improve their finances.
Health – Topics like fitness, nutrition, mental health, and self-care are helpful.
Travel – If you love traveling, you can start a travel blog, sharing tips on budget travel, destination guides, family travel, or even remote work opportunities.
Parenting – This niche covers a wide range of topics, from newborn care and toddler tips to advice for teenagers. You can also write about balancing parenting and work or homeschooling.
DIY and crafts – Whether it’s home improvement, crafting, or upcycling projects, this niche is popular among creative individuals looking for inspiration and guidance.
Lifestyle – A lifestyle blog covers several areas like home decor, fashion, personal growth, and productivity.
Tech – If you’re knowledgeable about tech, you can give advice on the latest gadgets, software, app reviews, and even tutorials for beginners.
Beauty – This is a highly popular niche where you can share makeup tips, skincare routines, and product reviews.
Relationships – Help readers improve their relationships or personal growth by sharing advice on communication, self-improvement, or career development.
You can learn how to start a blog in the free How To Start a Blog Course.
3. Create an online course
If you’re looking for a passive way to make money by giving advice, creating an online course is a great way to do so.
My sister runs a popular online course and has done very well with it. Over the years, she has helped thousands of people with her business advice for website owners.
You can create a course on topics such as:
Meal planning and prep – Teach people how to plan meals, prep ingredients, and create healthy, budget-friendly meals.
Parenting tips – Help with topics like raising toddlers, managing screen time, or improving sleep.
Home organization – Help people declutter, organize their homes, and create better living spaces.
Fitness and wellness – Share workouts, stretching routines, or mindfulness practices like meditation or yoga.
Photography basics – Teach people how to use their camera or phone to take better photos. I recently saw a course teaching parents how to take better family photos with their phone, and it looked so helpful!
Gardening for beginners – Guide people through starting a garden, caring for plants, and growing their own fruits and veggies.
DIY home projects – Sell lessons on simple home improvement or crafting projects, like building furniture or making home decor.
Travel planning – Share tips on planning budget-friendly vacations, packing efficiently, and finding fun destinations.
Pet care – Teach new pet owners how to care for their animals, including training, nutrition, and grooming tips.
You can sell your online course on your website or course websites like Udemy, Skillshare, or Teachable (Teachable is my favorite course platform).
4. Answer surveys
You won’t get rich by answering surveys, but it’s an easy way to make money by giving your opinion.
Market research companies pay survey sites to find users to complete surveys for them. These paid online surveys help companies make better products and services.
Here are some of the recommended survey companies to sign up for:
American Consumer Opinion
Swagbucks
Survey Junkie
InboxDollars
Branded Surveys
Recommended reading: 12 Best Online Surveys For Gift Cards
5. User Interviews
User Interviews stands out from most market research companies because, rather than paying for typical online surveys, it specializes in focus groups.
This means they seek more detailed feedback from participants on different products and companies. Their studies are usually conducted via phone or video interviews, with the average study paying over $65.
Large companies like Spotify, Pinterest, GoPro, and Amazon use User Interviews to collect market insights. The platform runs over 2,000 studies each month, and last year alone, more than 77,000 participants were paid.
Michelle (my sister as well as the owner of this blog) participated in a focus group through User Interviews and earned $400 for just one hour of work. She said it was simple, and the entire process was completed online through a video call.
You can click here to sign up for free with User Interviews.
6. Financial advisor
Financial advisors are trained professionals who give financial advice to clients. You can make money as a financial advisor by charging fees for your services, receiving commissions on financial products, or both.
A financial advisor may help with financial planning, retirement, wealth management, insurance, investments, savings, and more.
To become a financial advisor, you need a combination of education and certifications. To get started, you’ll need a bachelor’s degree in finance, economics, accounting, or related field. You’ll also need an internship or entry-level job in finance, banking, or financial planning to get hands-on experience. Most importantly, you’ll need to get certified as a Certified Financial Planner and pass the licensing exams.
As of this writing, the average Certified Financial Planner’s salary is between $66,000-$122,000 a year.
7. Business consultant
One way to make money by giving advice is to start a consulting business and become a freelance consultant.
A business consultant is someone who uses their expertise to help companies improve their business, income strategy, and profitability.
Consultants get paid either by hourly rate, project-based fees, or retainer agreements. Business consultants can also make money by conducting training sessions and workshops for more money.
Business consultants are in high demand as businesses are always looking for ways to improve and make more money.
8. Personal trainer
If you love fitness and working with people, you can try making money as a personal trainer.
Getting a NASM personal trainer certification, which is one of the top certifications in the field is helpful. This is where you’ll dial in form, workout routines, and many other important fitness-related skills.
As a personal trainer, you can make money with one-on-one sessions, group classes, and even online training programs. Trainers typically charge per session or have package deals for multiple sessions. You can also make money by creating workout programs that people can purchase online.
9. Online coach
You can make money working as an online coach through digital platforms.
Some areas that you could coach on include:
Life coaching
Relationship coaching
Business coaching
Fitness coaching
Career coaching
As an online coach, you can make money with one-on-one coaching sessions, group coaching, or self-paced courses that people can buy directly from you. You can charge people one-time fees, package deals, or ongoing membership subscriptions for continued access to your guidance.
To grow your income, you can use social media platforms to build your brand and get people to trust you, such as by sharing helpful free tips in graphics or captions.
10. HelpOwl
HelpOwl is a platform where you can get paid to give advice online to individuals seeking help with different topics.
To get started with HelpOwl, register on the website and set up your profile. Your profile should showcase your expertise, skills, qualifications, and areas of advice.
You can also determine your fee structure for providing advice whether it’s per session or question.
11. Quora
You’ve likely heard of Quora since it’s a goldmine for getting any kind of question answered, but did you know you can make money with Quora?
Yes, it is possible to make money on Quora through a few different strategies.
Quora has a partner program that lets you make money by asking questions that generate high traffic and engagement to their website. You can get paid based on the ad revenue generated from the questions you ask.
Quora’s partner program is great for anyone who wants to become an online advice giver as you can share your honest opinion or answer a question in a simple comment.
12. Start a podcast
You can make money selling advice through a podcast.
This method of selling advice takes a lot of work but can be worthwhile if successful.
If you want to start a podcast to give advice, there are many great topics to choose from. You could talk about personal finance, relationship advice, or career coaching. Health and wellness podcasts are popular too, where you can cover fitness, mental health, and self-care. Parenting tips for new parents, small business advice, or life coaching are also good ideas. You could even share tech help, home improvement tips, or legal advice.
Whatever you pick, your podcast can help people improve their lives.
Once you build up your following, you can make money with ads and different sponsorships on your podcast episodes, along with affiliate links.
13. Start a YouTube channel
Starting a YouTube channel is another great way to get paid for giving advice, especially if you enjoy talking on camera.
I turn to YouTube all the time when I’m looking for answers and advice. It’s a helpful resource where I can find detailed explanations on just about any topic. Whether I need tips on personal finance, blogging, or even tech solutions, there’s usually a video that walks me through the steps. I love how I can watch experts in action, and it’s a great way to learn something new quickly and visually.
With YouTube, you can create videos in your area of expertise and build an audience of subscribers who value your knowledge. Whether you’re skilled in personal finance, cooking, fitness, or any other niche, there’s probably an audience looking for advice in a YouTube video.
To make money on YouTube, you can monetize your channel through:
Ads: Once you reach YouTube’s eligibility requirements, you can earn money from ads that play during your videos.
Sponsorships: Brands may pay you to promote their products or services in your videos.
Affiliate marketing: Include affiliate links in your video descriptions, earning a commission when viewers make purchases through your links.
Selling products or services: You can also use YouTube to promote your own products, courses, or consulting services.
Consistency is key on YouTube, so creating valuable, engaging content that resonates with your audience will help grow your channel and income over time.
14. Share advice on Fiverr
Fiverr is a great spot to sell your advice if you’re looking for an online job.
I searched on Fiverr and found 2,200 listings where people were offering to give advice. The topics included things like relationship advice, tax advice, fantasy football advice, blog advice, business advice, and more.
You simply create a profile and a listing where you share the type of advice you specialize in.
15. Website testing (such as with UserTesting)
Website testing is a simple way to make money by sharing your advice and providing feedback on the website user experience.
There are several well-known website testing sites including UserTesting, TryMyUI, and Userlytics. These sites connect you with people looking for user feedback on their websites and apps.
By using website testing platforms, selling expert advice, and building a strong reputation, you can successfully make money through website testing and sharing your insights.
16. Mystery shopping
Mystery shopping is a fun way to give your advice and feedback on a customer service experience, product, or store operations.
As a mystery shopper, your feedback tells companies how well their employees are treating customers, if customers are happy, and if any operational problems need fixing.
There are three different ways to make money mystery shopping including:
Cash and reimbursement (you’ll get paid to do the mystery shop, plus get the service/product for free).
Cash payment (an example would be a phone call mystery shop when you don’t buy anything).
Reimbursement (an example would be a restaurant secret shop – these typically don’t pay any money except for receiving free food).
BestMark is one of the biggest mystery shopping companies with a great reputation, and they have many different kinds of mystery shopping jobs available. Ath Power Consulting is another well-known mystery shopping company that has over 500,000 secret shoppers. They complete over 10,000 mystery shops each month, and they work with many popular companies.
Recommended reading: Want To Make An Extra $100 A Month? Learn How To Become A Mystery Shopper
Frequently Asked Questions
Below are answers to common questions about how to get paid to give advice.
Can you get paid for giving advice?
Yes, you can get paid for advising in many ways such as consulting (people pay for advice on specific topics), coaching (people paying for expertise in a certain area, like business, relationships, career, and life), and content creation (monetize your advice through blogs, podcasts, social media).
What type of professionals make money by giving advice?
The kinds of professionals getting paid to give advice include:
Consultants
Coaches
Financial advisors
Legal advisors
Counselors
Health experts
Tutors
Real estate agents
Educators
Creative professionals
Entrepreneurs
Public speakers
As you can see, the list is endless. By using the skills and knowledge you have, you can likely get paid to provide practical and personalized advice to people.
Can I sell life advice?
You can sell life advice if you have valuable life experiences that other people find helpful to learn from. People tend to hire life coaches, mentors, and advisors to help them with life challenges, achieve goals, and find purpose in their lives.
You can make money selling life advice in several ways including:
One-on-one coaching sessions
Online courses
Books
Blogs
Podcasts
Social media accounts
It’s important to identify your niche and who you want to help. For example, your target audience may be women looking for a career change or people who need help with relationship advice. Focusing on a specific niche will help you stand out from others and market your services more efficiently.
How can you get paid to give advice online?
There are many ways to get paid to give advice from your laptop. JustAnswer is a great way to get started getting paid to give advice and connect you to people seeking help in your field.
If you’re looking for a passive way to make money giving advice, create an eBook, course, blog, or podcast. You can make money by selling your products, advertising, using affiliate links, or creating sponsored content.
Can you get paid to give relationship advice online?
You can get paid to give relationship advice and dating advice by working as a relationship coach through platforms like BetterHelp (as a therapist) or via your own website. You’ll need specific credentials to work on sites like BetterHelp and Talkspace, whereas having a relationship blog doesn’t require certifications, but may be harder to make money at the beginning of starting your business.
How To Get To Give Advice – Summary
I hope you enjoyed this article on how to get paid to give advice.
If you have knowledge in a specific area, you can turn that into a business by giving advice. Whether it’s in fields like medical, legal, tech, personal finance, or relationships, there are many ways to get paid for your skills.
Plus, you can do this either part-time or full-time, so you can choose what kind of hours you want to work.
Loud budgeting is a money-saving trend that is encouraging people to be honest with others about their finances and feel okay about saying “No” to expensive invitations.
The concept was first introduced by TikTok content creator and comedian Lukas Battle in late 2023 as an alternative to “quiet luxury” and involves talking openly — or loudly — about your financial goals and spending limits to those around you. Since Battle first coined the term, TikTok has been deluged with videos extolling the benefits of loud budgeting and how to do it.
Is it time to get on the loud budgeting bandwagon? Maybe. While you can’t trust all the financial advice you get on social media, many finance experts say that loud budgeting is rooted in a time-honored financial principle — that people should make spending decisions based on their budgets and savings goals, rather than peer pressure or FOMO.
Here’s a closer look at what loud budgeting is and how to incorporate this approach into your own life.
Key Points
• Loud budgeting, a concept introduced by TikTok creator and comedian Lukas Battle in late 2023, encourages transparency about financial goals and spending limits.
• Benefits of loud budgeting may include: reduced financial stress, avoiding overspending due to peer pressure, building an enhanced support system, and reaching financial goals.
• It can be implemented by determining priorities, building a basic budget, and being honest with those around you about your budget.
• Budgeting tools, such as those provided by your bank or apps that track or permit you to share your spending and savings goals, can assist with loud budgeting.
• Loud budgeting doesn’t have to entail disclosing financial or personal details — it can be as simple as sharing your financial goal and/or limits.
The Psychology of Loud Budgeting
When it comes to maintaining close ties to friends and family, it can be hard to decline an invitation to a catch-up dinner, reunion weekend, or destination wedding — even if you’re not comfortable with the cost. So, you might grudgingly say “Yes,” and figure you’ll deal with the financial fallout later. Or, you might say “No,” but make up a fake reason why you can’t be there. Neither option is ideal.
Loud budgeting offers an alternative solution — bowing out while being honest about your money concerns. It’s based on the premise that staying close and connected with people you care about doesn’t have to cost a lot. Often, it just takes one member of the group to say “No,” and suggest a way to bring down the cost of a social outing or gathering.
Recommended: 7 Tips for Living on a Budget
Benefits of Practicing Loud Budgeting
While loud budgeting isn’t for everyone, it has a number of benefits. Here are some to consider.
Reduced Financial Stress
Money worries can be a significant source of stress. Loud budgeting can immediately take some of the pressure off by making it acceptable to opt out of social plans that will cause you to spend more than you can afford. Over time, loud budgeting can help you grow the balance in your bank account, pay down debt, and achieve your goals — all of which can improve your financial well-being.
Improved Financial Transparency
While talking about money has long been considered taboo and can even trigger shame, loud budgeting aims to reduce the stigma around having financial limitations. Instead, it advocates being transparent about your budget and why you’re choosing not to spend your hard-earned cash on something. By starting the conversation, loud budgeters may also encourage others in their circle to be more authentic and honest about their finances.
Enhanced Support System
Not everyone will necessarily be receptive and understanding when you get loud with your budget. But there is also a good chance that you will get support from others who (unbeknownst to you) are in the same financial boat. This can help you build a community of people working towards similar financial goals. Your community can help hold you accountable to your plan. You can also share tips and experiences and cheer each other on when you achieve success, such as reaching a savings goal.
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How To Implement Loud Budgeting in Your Life
If you’re interested in trying out this Gen Z budgeting trend, here are some tips for how to incorporate loud budgeting into your life.
Determine Your Priorities
Budgeting (loudly or quietly) is about making sure your spending aligns with your priorities. So a great first step is to sit down and lay out some specific and achievable financial goals, along with a timeframe for when you want to reach them. For example, maybe you want to pay off your credit cards in the next six months or put a down payment on a home in one year. Knowing what you want to accomplish gives you the “why” behind your loud budget and helps you stick to your plan.
Build a Basic Budget
Before you can get loud about your budget, you actually need to make a budget. To do so, you might start by looking at what’s coming in each month (on average) and what’s going out each month (on average). If your total monthly spending is higher than your total monthly income — or it’s about the same (meaning you’re not saving anything) — you’ll need to adjust accordingly.
There are all kinds of budgets, but one simple framework to consider is the 50/30/20 rule. This entails allocating 50% of your monthly take-home income to needs, 30% to wants, and 20% to saving and paying more than the minimum on your debts.
Once you come up with a basic budget, it’s a good idea to track your spending (there are budgeting apps that make this easy) to see how well you’re sticking with the plan and, if necessary, make some tweaks to your budget.
Be Honest With Others
Once you have a clear sense of your budget, priorities, and savings goals, don’t be afraid to share this information with friends and family. While you don’t have to delve into the intricate details of your finances every time you decline a social invitation, you can say that you’re trying to spend less and be better about managing your money. You might also talk about some specific goals you’re trying to achieve. Being honest in this way can help make it easier to decline costly invites and keep you accountable to your plans.
Suggest Alternatives
When someone in your circle suggests an outing that doesn’t work with your budget, consider suggesting alternative options. For example, if you can’t swing an expensive brunch, you might suggest a picnic in the park. Or if your friend group wants to spend the afternoon shopping, see if you can entice them to go hiking instead. The idea is to find some simple, wallet-friendly ways to have fun and stay connected without sacrificing your financial health.
Find Allies
Sticking to a budget can be a lot easier when you have a supportive community — or even just one or two allies — who are on the same financial page. If you can’t find any good budgeting buddies in your circle, you might search the #loudbudgeting hashtag on your social media channels to find others who are blazing the same path. This can help you build a community of people who can hold you accountable and cheer you on as you hit your goals.
Recommended: 7 Different Types of Budgeting Methods
The Takeaway
Loud budgeting promotes being more honest about your financial circumstances and goals, rather than accepting expensive invites out of fear of being a wet blanket and then dealing with the aftermath. While it can be challenging to speak your truth, being vocal about your budget can strengthen your connections and help you stay committed to your financial health — not just while it’s the latest trend on social media, but throughout your adult life.
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FAQ
How can I start loud budgeting without oversharing?
While loud budgeting involves being open about your financial situation, you don’t have to share sensitive details about your finances with everyone you know. Rather than lay out the specifics of your income and monthly bills, you can simply say that you are working toward a particular goal (like paying off your student loans or saving for a home) and trying to be more responsible about spending, saving, and managing your money. That can help explain why you are declining invitations to, say, pricey meals out or weekends away.
Does loud budgeting work for all income levels?
Yes, loud budgeting can be effective for all income levels, as it primarily involves being open about your financial goals and priorities with those close to you. While higher earners may be focused on wealth building and investment strategies, lower-income loud budgeters might share how they are working towards being free of credit card debt, building an emergency fund, or saving for a down payment on a home.
What apps or tools can help with loud budgeting?
Any budgeting app that helps you make better spending decisions can assist you with loud budgeting. Even better if the app allows you to track and share your progress with others. You might consider the tools your bank offers for budgeting. Other options include YNAB (You Need a Budget), which can help you create a plan for every dollar you earn; Goodbudget, which digitizes the “envelope system” of budgeting and allows you to share your budget categories with family or friends, or Honeydue,which helps couples sync bank accounts, credit cards, and more for easier viewing of your financial picture.
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SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.50% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
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Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:
Get expert tips on how to pack for travel efficiently and effectively, including clever ways to save on baggage fees.
How can you keep luggage costs down during holiday travel? What are the best strategies for managing carry-on luggage, especially for international trips? Hosts Sean Pyles and Meghan Coyle discuss efficient luggage management to help you understand how to save money on baggage fees. They begin with a discussion of minimizing luggage costs, with tips and tricks on rolling clothes, borrowing essentials from family members, and sticking to a carry-on bag. Then, travel writer Jessie Beck joins Meghan to discuss effective packing techniques, including the benefits of using smaller bags to prevent overpacking, creating a versatile travel capsule wardrobe, and dealing with potential issues like gate-checked bags and delayed luggage. They also cover the importance of miniaturizing items such as wallets, using airline apps and AirTags to track luggage, and understanding airline compensation policies for delayed bags.
Check out this episode on your favorite podcast platform, including:
NerdWallet stories related to this episode:
Episode transcript
This transcript was generated from podcast audio by an AI tool.
Sean Pyles:
Are you really bringing all that? Do you need everything in that bag? Are you sure? Couldn’t you do with just one pair of shoes instead of, oh, six? Well, if not, you’re probably going to pay a pretty penny for luggage when you’re traveling over the holidays. We’ve got some timely advice for keeping those costs down.
Jessie Beck:
Once you add on the cost of paying to have a carry-on bag on that basic economy ticket, you might as well just get an economy ticket and be able to be a little bit more flexible. I think that’s the most important thing for me. If I did have to make a last minute change, I can do that penalty-free.
Sean Pyles:
Welcome to NerdWallet’s Smart Money podcast. I’m Sean Pyles.
Meghan Coyle:
I’m Meghan Coyle.
Sean Pyles:
This is episode three of our nerdy deep dive into holiday travel and the costs therein. Meghan, I know there are plenty of folks out there who are strict carry-on only travelers, and I am one of them. I’ve not checked a bag in over a decade.
Meghan Coyle:
Wow! You’re one of them. Okay. There’s a lot to be said for that strategy, as long as you can live with fewer choices. There’s a whole cottage industry around figuring out the best ways to stuff small suitcases and even wear multiple articles and layers of clothing on the plane, so they’re not even in a bag.
Sean Pyles:
I have not gone that far yet. I mostly try to roll my clothes as tightly as possible, so I can still have options while fitting everything in my carry-on. There are multiple reasons to restrict yourself like this, though. One is that your luggage will never be lost.
Meghan Coyle:
Oh, man. Remember that period a couple years back, when people were losing their luggage all over European airports?
Sean Pyles:
Yeah. What a nightmare. When you go carry-on, there’s no losing your bag, no worrying about stuff getting stolen out of it. Another benefit to carry-on only is that you don’t have to pay luxurious fees to check your bags. You could put a kid or two through college for what it costs to have your bag fly in the cargo hold. I exaggerate a little bit, of course. But honestly, the fees are pretty bad when you add them on top of airfare.
Meghan Coyle:
And choosing your seat, and your airplane snacks.
Sean Pyles:
Yeah. I’m carry-on only for two main reasons. The first is that I am impatient. I do not want to wait at baggage claim to collect my suitcase after I’ve spent however many hours traveling. And two, I try to be in control of my own destiny as much as possible. Handing off my bag to some airline and hoping it gets to my final destination is just not how I roll. And yes, that’s a suitcase pun.
Meghan Coyle:
I’m also a carry-on type of person most of the time. I hate waiting at the luggage carousel after a flight. I want to be at my destination already. Sean, not everyone can smoosh everything into a bag that fits in the overhead bin or under their seat. Especially in the winter, and that includes holiday travel. If you’re going anywhere with a possibility of snow, ice, frigid temperatures, you’ve got to have the boots, you’ve got to have the sweaters, you’ve got to have the puffer coats. Or if you’re escaping to the tropics, I don’t know, maybe you need 40 sets of swimsuits. Whatever the reason, if you’re a bag checker, we’ve got some tips for you to try to bring the cost down.
Sean Pyles:
All right. Well, we want to hear what you think too, listeners. To share your ideas and experiences around holiday travel with us, the good, the bad, and the insanity, leave us a voicemail or text the Nerd hotline at 901-730-6373. That’s 901-730-NERD. Or email a voice memo to [email protected]. Meghan, who’s talking luggage with us today?
Meghan Coyle:
Our guest today is Jessie Beck. She’s a San Francisco-based travel writer for Afar, a travel magazine, and she’s done plenty of packing and unpacking in her career. She’ll share her knowledge of all things baggage.
Sean Pyles:
That’s coming up in a moment. Stay with us.
Meghan Coyle:
Jessie Beck, welcome to Smart Money.
Jessie Beck:
Hi, Meghan. Thank you for having me.
Meghan Coyle:
Tell us, what are your travel plans this year for the holidays?
Jessie Beck:
Oh, that’s a good question. For Thanksgiving, my husband and I are going back to the East Coast to visit family. But for Christmas, we’re taking advantage of the fact that we both have a lot of time PTO around that time, so we’re going to go to Japan. See the family another time, when it’s warmer.
Meghan Coyle:
Oh my goodness, that sounds incredible. Have you been to Japan before?
Jessie Beck:
Actually, we’re going back to a hotel that we stayed in in February 2020, right when the pandemic was starting in Japan. Really excited to go back and say hello again.
Meghan Coyle:
Well, let’s get right into it. How much luggage are you taking with you for each of those trips?
Jessie Beck:
I am a pretty avid carry-on only packer. Actually, that last trip I took to Japan in the winter to ski season, I only did with a 40-liter backpack and a small purse as my personal items.
Meghan Coyle:
Okay. How many coats were you wearing on the airplane?
Jessie Beck:
One very large coat, and I was very hot.
Meghan Coyle:
Are you going to do the carry-on only for both your domestic trip and your international trip?
Jessie Beck:
Yes, definitely. I think it’s almost a little easier when you’re traveling to visit family, because I’ve got a sister-in-law I can borrow clothes from. They’ll have extra hats and mittens, and all those kinds of things. If you forget your toothpaste, family will step in. Sports or ski trips can be a little bit trickier to stick to the carry-on luggage.
Meghan Coyle:
Tell us exactly what kind of bag you’re using for these carry-on only trips.
Jessie Beck:
I’ve always wondered how big the backpack cohort is, in terms of luggage enthusiasts. I’ve always used a travel backpack. I really love how much easier it is to move around the world with a backpack. I know some people will disagree with me because they’re heavy, and all that stuff.
Meghan Coyle:
For people who don’t normally travel with backpacks, can you tell us what is the difference between a travel-specific backpack and just the backpack you use to carry your laptop, or to go to school or work?
Jessie Beck:
Oh my gosh. This is so embarrassing, but when I first started traveling a lot in college and right after, I was using this massive hiking backpack that I just found in my parents’ garage. It was way too big. But it was also really difficult to get access to anything within the bag, because a traditional hiking backpack is top-loading, so you’ll usually see the opening of the backpack at the top of it. Maybe you’ll have a zipper at the bottom, to be able to access things at the bottom of the backpack.
But a lot of travel-specific backpacks will have a clamshell opening. They’re opening a little bit more similarly to a suitcase, and that makes it a lot easier to open your bag and see everything that’s inside it without having to take all the stuff that’s on the top out. A lot of them will also have some additional pockets and organizational features. Some of them will also design with carry-on restrictions in mind, so they’re really trying to keep it under that 40-liter limit.
Meghan Coyle:
Yeah. One of the features I really like about my travel backpack, I have one from Dagne Dover, is that it has the sleeve on the back of it so that it can very snugly fit over your carry-on rolling suitcase, if you decide to do both backpack and suitcase. I really love that feature.<br>Let’s get back to your travels. How much is that going to cost you to travel backpack-only?
Jessie Beck:
For just the luggage, I will not be spending anything to bring a bag with me on either flight. I’ve noticed, and this is purely anecdotal, I almost never have my bag gate-checked when I’m wearing a backpack. If there’s any other backpackers out there who have had a different experience, I would love to know. But I am operating under this theory that backpack people don’t get gate-checked as often as suitcase people. Not only am I not spending any money, but I generally keep my luggage with me.
Meghan Coyle:
For people who are going to take a carry-on bag or checked baggage, how much would you say they need to budget for bags if they’re traveling for the holidays this year?
Jessie Beck:
In terms of price for checking a bag?
Meghan Coyle:
Yeah. Or even bringing a carry-on, in some cases.
Jessie Beck:
That’s true. Some airlines are now charging for carry-on bags. I always do that calculation as I’m booking the ticket. For example, I’ve tried basic economy a total of one time.
Meghan Coyle:
Jessie Beck:
I was like, “Okay, I’m a light packer. I can do this. Personal item only, visiting a friend in Chicago in the summer, easy. No problem. Got it.” But I think for most scenarios beyond that, the things you’re losing by going from an economy ticket to a basic economy ticket don’t make that savings worth it, especially if you want to bring a carry-on bag. Once you add on the cost of paying to have a carry-on bag on that basic economy ticket, you might as well just get an economy ticket and be able to be a little bit more flexible. I think that’s the most important thing for me. If I did have to make a last-minute change, I can do that penalty-free, whereas you can’t do that with a basic economy ticket.
It definitely varies by airline. You’re probably going to end up spending somewhere between 30 and 50 each way. Definitely do that calculation and that math before you book your ticket, because if you’re traveling with a bunch of luggage, basic economy is not the way to go.
Meghan Coyle:
I totally agree. It makes it hard to compare prices when you’re looking at basic economy, versus economy, versus budget airlines. There’s so much you have to add up before you make your choice, based on price.
Jessie Beck:
I wish Google Flights had an easy feature where you could add all of that up to the total price of your ticket so you could see the actual cost of what your ticket’s going to be. But in short of that, a simple spreadsheet works. I’m super nerdy, I love a spreadsheet.
Meghan Coyle:
Same, same.
Jessie Beck:
Meghan Coyle:
Tell us what has happened to bag prices this year. If people haven’t traveled since the last holiday season, they might be a little surprised when they do go to check out and see the bag fees.
Jessie Beck:
I’m going to be totally honest, I haven’t been keeping tabs too much on this specific story because I am such a carry-on only packer. Though, one change that I was really excited to see is some airlines are now considering sporting equipment, like bikes, as just a regular bag, whereas previously they were not. That’s something I encountered recently this summer, when I was traveling with a bike. I had traveled with a bike previously on United Airlines, and they were charging me $200 each way to fly with this bike. I was like, “That is ridiculous.”
Meghan Coyle:
Yeah. That could be more than the ticket in some cases, I would imagine.
Jessie Beck:
For domestic, at least, I switched to Alaska Airlines when I was traveling with a bike because they always treated bikes as regular luggage, so as long as it stayed under 50 pounds. But recently, United changed their rules as well, so they, too, are now qualifying a bike as regular luggage. That’s probably the one change I’ve been paying attention to the most because that’s pretty much the only time I ever check a bag, is with a bike.
Meghan Coyle:
One story I’ve been following this year was bag fees not only went up across several airlines, and it’s a pretty nominal amount. Delta, United, American, Alaska, all of those airlines raised their bag fees by $5, in some cases $10. There’s a difference between if you check your bag before you get to the airport, when you’re booking your ticket, or if you wait until you’re literally at that kiosk checking in and you add a bag there. But the one that interested me the most was that JetBlue even added peak and off-peak pricing to their bags. Get this. They basically published a set of dates for peak pricing for your bags, where your bags will cost $5 to $10 more than their normal pricing. Of course, the peak pricing is during the holidays.
Jessie Beck:
Meghan Coyle:
If there is a way to, like you said, visit your family and borrow some toothpaste, I would say if you’re flying JetBlue, this might be a good time to try it out. What are some other ways to save on bag prices?
Jessie Beck:
You brought up one good point, which is that some airlines will charge you more if you’re paying at the airport versus paying for your checked bag in advance. Again, not a ton of money. No one’s going to hate on saving $5 or $10. Credit cards are another good way to save on checked baggage fees. If you have airline-branded credit cards, then you can check that bag for free. That’s a good option if you travel often. If you’re only traveling once or twice a year, I don’t know if an airline-branded credit card is really the best option. But if you are traveling frequently and you have that, that’s something to look into. Or if you’re traveling with other people, try to consolidate so you’re only checking one bag between the two of you, or something. There’s a bunch of ways to get creative and just minimize how much you’re bringing or checking with the airlines.
Meghan Coyle:
It has so many benefits beyond just saving money. If you have just one bag to worry about, it brings you so much peace of mind in other ways of traveling as well. Tell us a little bit about your travel history and when this idea of being team carry-on only really started to resonate with you.
Jessie Beck:
It’s been a process. I started by reducing from that 65-liter, to buying a 45-liter backpack. I traveled with that for quite a while. Including when I was in the Peace Corps, that’s the main luggage that I brought with me, along with a day bag. Then in my two years in the Peace Corps, I actually tried to minimize even further. Mostly because, in the country where I was at, Madagascar, you’re mostly traveling by bus. If your luggage cannot fit in your lap or under the seat in front of you on those buses, it goes above the bus. Which normally, wouldn’t sound like such a bad idea, except it’s not covered. If it rains, your luggage gets wet. I ended up with a soggy bag full of clothes and was like, “I’m never doing this again. I’m just going to bring two outfits next time I travel, because they’re going to stay dry.”
Meghan Coyle:
Oh my goodness.
Jessie Beck:
I’m never putting anything on the roof.
Meghan Coyle:
Yeah. Oh, what a bummer to have soggy luggage.
Jessie Beck:
Meghan Coyle:
What is your packing strategy, then? To be able to fit everything in such a small bag?
Jessie Beck:
It can be intimidating to try and go from a lot of luggage to a very small amount. Just start small, try to reduce what you’re carrying by maybe 10 liters, five liters. Some of the strategies that I’ve found really effective. The first one is get a smaller bag. We all have this case where, if our bag is bigger and we have extra space, we’re going to fill it. I was traveling with a friend to Portland over the weekend, and she had exactly that scenario. She packed everything she needed for the weekend. Then she said she had half of her bag empty, so she decided to just start throwing in some extra sneakers and some extra towels and all these things that she didn’t really need, just because she had the space. I think that’s a really good forcing function, is get a smaller bag. Don’t give yourself the opportunity to pack those things you don’t really need in the first place. That can be a really helpful place to start.
Meghan Coyle:
It’s like when you have a smaller dinner plate and you don’t fill your plate as much.
Jessie Beck:
Meghan Coyle:
Because there’s just less space for it.
Jessie Beck:
Yes, so true. I think there’s probably some psychological reasoning for all of this. But yeah, definitely noticed it works.
Meghan Coyle:
What else are you doing? What is a must pack for you, in terms of your carry-on?
Jessie Beck:
The other two things I do. One, I miniaturize or bring a travel-sized version of everything. I’ve even taken my giant wallet and gotten a super small travel-friendly wallet. It seems like a small thing to just go to a smaller wallet. But when you do that across a bunch of different items, you can get from a medium-sized bag to a small bag worth of things. The other thing I do is I do a travel capsule wardrobe. This is taking that capsule wardrobe approach, but travelizing it. So instead of 30 items of clothing for your full season, which is what a lot of capsule wardrobe enthusiasts will recommend, I’m focusing more on 10 to 12 items of clothing. Plus your PJs, underwear, and no more than two pairs of shoes. I think that’s a big one, too.
Meghan Coyle:
Oh, the shoes take up so much space.
Jessie Beck:
Meghan Coyle:
It’s so hard to choose just two shoes.
Jessie Beck:
I know. It really is.
Meghan Coyle:
Let’s get to what happens if your bag does get gate-checked, you get separated from your bag somehow. Are there any things you do to give yourself some peace of mind so you know you’ll get your bag back or be able to locate it?
Jessie Beck:
The number one thing, always download the airline app. Even if it’s an airline that you don’t fly very frequently, always, always, always download that app before you go. They can provide a lot of information and services just through that app on your phone. A lot of airlines will allow you to track the status of your bag through their app. Whenever the barcode on that tag is being scanned on your luggage, it’s going to update in that app. It’s going to tell you where it is. If you have a connection, it’ll tell you if your bag made the flight with you.
Another thing that other people like to do is putting an AirTag or something similar in their luggage, just to be able to see that location. I do that with my bikes, just because those are really expensive and I want to make sure that they’re not getting lost somewhere. That’s definitely a nice way to keep peace of mind with your luggage.
Meghan Coyle:
What are some airline policies around compensation for delayed or lost bags? Just in case something does happen to it, what should customers know about getting some sort of reimbursement for that?
Jessie Beck:
I know there’s more than one, but definitely Alaska Airlines. Then I think it’s Delta. Both of them will compensate you if your bag is late. I think a lot of people don’t know this, which is a super nice tip to keep in mind. If it takes more than 20 minutes to get to the carousel, you can write in and get some miles as compensation for that bag being late. I forget what Delta’s policy is.
Meghan Coyle:
I think it’s 2,500 miles if your bag doesn’t show up in 20 minutes. So yeah, very similar.
Jessie Beck:
Exactly. That’s a decent amount of miles just for being like, “My bag was 10 minutes late.” And it takes you a couple minutes to write in and say, “Hey, my bag was late. Can you compensate me?” I think a lot of people don’t take advantage of that.
Meghan Coyle:
I agree. It just takes that one extra step of looking up the online form. But then, it’s an easy way to get miles. At least you got a little something for waiting at baggage claim for so long. One other tip I always like to remind people is that your travel credit card might always have some lost luggage or delayed luggage reimbursement. This doesn’t really help in the moment when it’s happening and you’re like, “Where’s my bag?” But it could help you get reimbursement for anything new you had to buy. If they actually did lose your luggage, you might be able to get reimbursed for any valuables in your bag. Something to keep in mind is that you should try to book your travel with a travel credit card that has those kinds of protections if you have one.
Jessie Beck:
Yeah. That’s a really good one to keep in mind.
Meghan Coyle:
Jessie Beck, thank you so much for helping us out today.
Jessie Beck:
Yeah, of course. Thank you for having me. It was great speaking with you.
Sean Pyles:
Jessie’s experience of downsizing her packing is something that I can really relate to. I will admit that I am a recovering over-packer. Historically, I’ve tried to cram as much as possible into my suitcase. But over the past year or two, I’ve gotten much better at selecting just a couple of staples that I can mix-and-match. I may have fewer options on the whole, but it helps me get creative. I’m basically doing a less intentional version of that whole capsule wardrobe thing that you and Jessie talked about. I found that my suitcase is lighter, which makes traveling easier. And I also just have more room for souvenirs from my travels.
Meghan Coyle:
I think the real lesson here is that you do have options. You can take little baby steps to become someone who travels light. Sometimes, you just have to make those decisions based on who you are. Some people are fine wearing the same clothes day in and day out for a week-long holiday stay. Others want a new outfit every day plus room for shopping. We say you do you. But definitely look into some of the ways to cut down on those baggage fees through credit card benefits or other means.
Sean Pyles:
Agreed. As long as you’re prepared for the possibility that your luggage could end up hanging out somewhere in an airport, or even in another country without you, well, then it’s up to you to take that risk. Me? No giant suitcases, no problems. And then I have more money to spend on margaritas.
Meghan Coyle:
Luggage fees versus margaritas, is that what this has come to? I’ll join you.
Sean Pyles:
Meghan, tell us what’s coming up in episode four of the series.
Meghan Coyle:
Next time, we’re going to focus on people traveling internationally, either for holidays or any upcoming trip abroad, and what you should know about traveling with your debit and credit cards. Plus, how to save on getting local currency.
Craig Joseph:
As long as there’s a mobile signal, you can now use a card in a lot of situations where you previously couldn’t. That means you don’t have to carry as much cash, which is obviously safer, and credit card purchase protections cover you from fraud, in case you swipe the card in the wrong place.
Meghan Coyle:
For now, that’s all we have for this episode. Do you have a money question of your own? Turn to the Nerds and call or text us at 901-730-6373. That’s 901-730-NERD. You can also email us at [email protected]. And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeart Radio, to automatically download new episodes.
Sean Pyles:
This episode was produced by Tess Vigeland. I helped with editing. Claire Tsosie helped with fact checking. And a big thank you to NerdWallet’s editors for all their help.
Meghan Coyle:
Here’s our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.
Sean Pyles:
With that said, until next time, turn to the Nerds.
A small, steady amount of inflation is a sign of a healthy economy. But when prices rise too much too quickly, it lessens purchasing power, straining consumers and businesses.
Fortunately, the Federal Reserve (aka, “the Fed”) has a tool in its back pocket that can help tamp down inflation — the federal funds rate. By raising this benchmark rate, the government influences other interest rates, including rates for consumer and business loans. This makes borrowing more expensive and can help cool the economy, bringing inflation under control.
That said, raising interest rates doesn’t lower the pace of price increases overnight. There are also some risks involved in raising the federal funds rate too aggressively. Here’s a closer look at how interest rates and inflation interact.
Key Points
• To help control inflation, the Federal Reserve may raise the federal fund rate, which typically raises the interest rates offered by financial institutions.
• Raising interest rates makes borrowing more expensive, which tends to reduce consumer and business spending.
• Higher interest rates also encourage saving, since consumers will typically see higher interest rates on their savings accounts.
• It can take time for the Fed’s interest rate hikes to effectively ease the price of goods and services, and there are other factors that can affect pricing.
• Potential downsides to rising interest rates may include an economic slowdown, increased unemployment, and an increase in the cost of financing government debt.
The Relationship Between Interest Rates and Inflation
Inflation is generally defined as a sustained increase in the price of goods and services consumers regularly buy. While the inflation rate can be measured in a number of different ways, the Fed typically uses the Personal Consumption Expenditures Index (PCE) as its main measure of inflation. The PCE tracks changes in consumer spending on a wide range of goods and services.
The Fed has a stated goal of keeping inflation around 2% each year, as measured by the annual increase of the PCE index. To control inflation, the Fed will often take steps to influence interest rates. When interest rates are high, it costs more for consumers to use credit cards and take out mortgages and car loans. As a result, they typically start spending less. When demand for goods and services falls, it puts pressure on businesses to lower prices. Higher interest rates also help reduce spending by encouraging saving, as consumers benefit from higher yields on savings accounts.
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Mechanisms of Interest Rate Increases
In the U.S., decisions on monetary policy are made by the Federal Open Market Committee (FOMC), which is made up of the Board of Governors of the Federal Reserve as well as five of the presidents of the 12 Federal Reserve banks. Congress has mandated the Fed to set monetary policy so as to promote maximum employment and stable inflation (generally around 2% annually).
The members of the FOMC meet regularly to discuss monetary policy, viewing various economic indicators such as the employment rate, inflation rate, and current interest rates. Based on these market factors, they set the country’s target interest rate, known as the federal funds interest rate (also known as the federal funds target rate).
The federal funds rate acts as a reference for the interest rates big commercial banks charge each other for the overnight loans. A change in the rate that banks charge each other for loans impacts other market rates (like the prime rate) and, consequently, interest rates offered by banks and other financial institutions to consumers and businesses.
Effects of Higher Interest Rates on the Economy
When the Fed raises interest rates, it can have a number of effects on the economy, including:
• Reduced household spending. When interest rates on credit cards go up, consumers generally spend less on their cards. In order to afford credit card payments that now may be higher, they might also cut overall spending on goods and services.
• Slowdown in home sales. Higher rates on mortgages make it more expensive to buy a home. As a result, many consumers may decide to continue renting and hold off on purchasing a home.
• Sluggish business growth. When the cost of financing goes up, businesses may decide to hold off making large purchases or other investments in expansion and growth.
• Increased saving. Higher interest rates on savings accounts, especially high-yield savings accounts, incentivize saving, since account holders will earn a higher return on their balances.
• More foreign investment. Higher interest rates can attract foreign investors looking for better returns on their investments, which can increase demand for U.S. currency.
Recommended: APY vs Interest Rate
How Higher Rates Combat Inflation
When the federal funds rate rises, it sets off a ripple of effects in the U.S. economy. It makes it more expensive for commercial banks to borrow from each other, more expensive for businesses to finance large projects, and more expensive for consumers to get mortgages and other types of loans. This ultimately leads to less borrowing, less spending, more saving (thanks to good interest rates on bank accounts), and less overall money in circulation. Altogether, this tends to have a cooling effect on the economy, which helps to lower inflation.
It’s important to keep in mind, however, that the impacts of monetary policy set by the Fed are generally not swift. It can take upwards of 12 months for a rate hike to wend its way through the economy and actually ease prices. It’s also important to keep in mind that there are many things that impact inflation — from supply chains to labor costs to consumer demand. Interest rates are only one influencing factor.
Recommended: 10 Ways To Save Money Fast
Potential Drawbacks of Raising Interest Rates
While raising interest rates can be an effective tool for fighting inflation, it is not without its drawbacks. Here’s a look at some of the potential downsides of raising interest rates.
• Economic slowdown: As borrowing becomes more expensive, businesses may delay expansion or cut back on hiring, leading to slower job creation. Consumer spending may also decline, resulting in reduced demand for goods and services. Over time, this can lead to a slowdown in gross domestic product (GDP) growth, potentially tipping the economy into recession.
• A rise in unemployment: As businesses face higher borrowing costs, they may reduce their workforce or halt new hiring to cut expenses. Industries that rely heavily on borrowing, such as construction and real estate, can potentially see significant job losses as investment slows.
• Rise in the government debt costs: When interest rates rise, the cost of servicing the U.S. government’s debt also increases. Higher interest costs can strain the government’s budget and reduce the funds available for other important programs, such as healthcare, education, and infrastructure.
The Takeaway
Raising interest rates is a powerful tool used by the Federal Reserve, the central bank of the U.S., to control inflation, particularly in an overheating economy. By making borrowing more expensive and encouraging saving, higher interest rates reduce consumer spending and business investments, which can help cool demand and bring inflation under control.
However, this approach is not without its downsides, as it can lead to slower economic growth, increased unemployment, and higher government debt costs.
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FAQ
How quickly do interest rate hikes affect inflation?
The effects of interest rate hikes on inflation can take at least 12 months to materialize. Central banks raise rates to reduce borrowing and spending, which in turn lowers demand for goods and services, along with prices. However, it takes time for this chain of events to ripple through the economy. On top of that, inflation is influenced by numerous other factors (including global supply chains, energy prices, and labor markets), which can also delay the impact of rate hikes.
Can raising interest rates cause a recession?
Yes, raising interest rates too aggressively can potentially cause a recession. Higher interest rates increase the cost of borrowing for consumers and businesses, which can reduce spending and investment. If rates rise too quickly or remain elevated for too long, the economy may slow significantly, leading to reduced consumer demand, lower business activity, and ultimately job losses. If economic output contracts for two consecutive quarters, it generally indicates a recession.
What happens to savings accounts when interest rates rise?
When interest rates rise, savings account holders typically benefit from higher returns. In response to rising benchmark rates set by the Federal Reserve, many (though not all) banks and credit unions will increase the interest rates they offer on savings accounts This can make saving more attractive than spending.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit activity can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.50% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.50% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 8/27/2024. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
The reverse budgeting method is an approach that prioritizes savings. Budgets typically start by looking at monthly bills and expenses and allocating whatever is left over to saving. Reverse budgeting turns this approach on its head — it considers savings first and spending second.
Also known as the “pay yourself first” method, reverse budgeting starts by allocating a certain amount of your monthly income to your savings goals (such as retirement or an emergency fund). Whatever is left over after that is how much you have to spend. Essentially, it involves pretending that your paycheck is smaller than it actually is.
If your top goal is saving or you’ve tried budgeting in the past without complete success, the reverse budget might be for you. Here’s what reverse budgeting means and how it works.
Key Points
• Reverse budgeting prioritizes savings by allocating a portion of income to savings goals first, then spending the remainder on other expenses.
• Reverse budgeting simplifies budgeting since you can focus on saving a predetermined amount and then spend the rest as needed or desired.
• The reverse budgeting method can help achieve financial goals faster and allows guilt-free spending within remaining income limits.
• Reverse budgeting may not be ideal for those with high-interest debt or irregular income.
• Automating savings and periodically reassessing the budget are key steps to making reverse budgeting work effectively.
Reverse Budgeting Explained
The reverse budgeting method prioritizes setting money aside for your savings and investing goals. This might include building an emergency fund, saving for a new car or down payment on a house, or investing for retirement. Once that money has been set aside, the rest of your income can be used to cover your living expenses.
Reverse budgeting usually involves setting up automatic contributions to savings, typically on payday. As a result, the money leaves your bank account before you get a chance to spend it. That’s why this method is also known as the “pay yourself first” approach.
How Reverse Budgeting Differs from Traditional Budgeting
Making a budget typically involves listing all of your monthly expenses and assigning a portion of income to each category (e.g., housing, groceries, transportation). The goal is to ensure that expenses don’t exceed income, and any leftover funds can be saved or invested. This approach often requires meticulous tracking and discipline to avoid overspending in any category.
By contrast, reverse budgeting starts by looking at your financial goals and the things you want to save for. It helps you determine how much you need to put aside each month to accomplish them. You then subtract that sum from your monthly pay; what’s left is how much you have to spend on everything else.
Earn up to 4.50% APY with a high-yield savings account from SoFi.
No account or monthly fees. No minimum balance.
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Steps to Create a Reverse Budget
Creating a reverse budget tends to be less complicated than setting up other types of budgets. It doesn’t require establishing spending categories and totals for how much you will spend on each. That said, there are a few steps involved. Here’s a look at how to do a reverse budget.
1. Assess Your Spending
To know how to set your savings goals, you’ll need to get a general sense of your current cash flow. You can do this by pulling the last few months of financial statements, then adding up how much is coming in and going each month on average. You might also want to make a list of your essential monthly expenses, as well as how much you tend to spend each month on nonessentials.
This type of spending audit will give you a clear picture of your spending patterns. It can also help you identify any discretionary spending you may be able to reduce to accommodate your savings goals. There are also budgeting apps that can do a lot of this work for you. Start by seeing what your financial institution offers that could help with this process.
2. Identifying Your Savings Goals
Next, you’ll want to think about your savings goals. These might include building an emergency fund, saving for a down payment on a house, doing a home renovation, going on a vacation, paying for a wedding, contributing to retirement accounts, or any other financial objectives.
You’ll likely want to set your savings goals in terms of dollars as well as the timeframe within which you want to work.
3. Allocate Income to Savings
Once you’ve identified your savings goals, you might pick just a couple to start with. For each, as noted, you’ll have determined how much money you’ll need, along with a realistic timeline for reaching the goal. With that information in mind, you can then allocate a portion of your income to each goal.
For example, if you want to save $5,000 for an emergency fund over the next year, you would need to save approximately $417 per month.
As you go through this step, you’ll want to be realistic about how much you can afford to siphon off your paycheck for savings. It’s important to have enough spending money left over to cover your bills and also have some fun.
Recommended: 10 Most Common Budgeting Mistakes
4. Automate Your Saving
To ensure consistency and reduce the temptation to spend your savings, it’s a good idea to automate the saving process. If you have a 401(k) at work, you can do this by letting your employer know how much of your paycheck to put into your retirement account.
For shorter-term goals, consider setting up an automatic transfer from your checking account to a savings account for the same day each month, ideally right after you get paid. Some employers even allow you to split up your direct deposit into two different bank accounts.
5. Make Adjustments as Needed
Once you’re living on your reverse budget, you may find that you don’t have enough wiggle room to comfortably cover your bills and everyday spending. Or you might realize that you can afford to put more money towards savings and, in turn, reach your goals faster. Either way, it’s important to periodically reassess your reverse budget and, if necessary, make some adjustments in your savings rate.
This is especially important as your life circumstances and financial goals change. If you get a raise, for example, consider increasing your savings rate (this can help you avoid lifestyle creep). Conversely, if you encounter unexpected expenses, you may need to temporarily reduce your savings rate to accommodate these costs.
Pros and Cons of Reverse Budgeting
As with any financial strategy, reverse budgeting has its advantages and disadvantages. Understanding these pros and cons can help you determine if this method is right for you.
Pros of Reverse Budgeting
First, consider the upsides of reverse budgeting:
• It can help you reach your goals faster: One of the main advantages of reverse budgeting is that it takes savings right off the top of your paycheck. This can help you build an emergency fund, save for a major purchase, or invest for retirement more quickly than traditional budgeting methods.
• Low maintenance: Reverse budgeting simplifies the budgeting process. Instead of meticulously tracking every expense category, you focus on saving a predetermined amount and spend the remainder as you see fit. This low-maintenance approach can be particularly appealing for those who find traditional budgeting too time-consuming and/or restrictive.
• Spending without guilt: With reverse budgeting, you can enjoy spending within the limits of your remaining income. Since your savings goals are already met, you have the freedom to spend on discretionary items without worrying that you are derailing your future progress.
In these ways, the reverse budgeting method can help you prioritize savings and achieve financial security.
Recommended: The Most Important Components of a Successful Budget
Cons of Reverse Budgeting
Next, keep these potential downsides of reverse budgeting in mind:
• It could lead to overspending: Since reverse budgeting doesn’t require setting up spending categories and strict spending limits for each one, you could end up overspending on certain things. Then, you might have to dip into savings to cover the shortfall.
• You might be better off focusing on debt: If you have high-interest debt, paying down those balances could provide a better return on investment than saving or investing. If this is the case, a more traditional budgeting approach that prioritizes debt repayment might be more effective.
• Not ideal for people with variable income: Reverse budgeting generally depends on earning a set amount of money each month. For people with variable income, such as freelancers or those with seasonal work schedules, maintaining a fixed savings rate could be challenging.
The Takeaway
Reverse budgeting, also known as the “pay yourself first” method, prioritizes saving and simplifies the entire budgeting process. By automating saving, it also reduces the chance that you’ll spend money today that you were intending to set aside for the future. However, reverse budgeting may not be the best approach if you have a lot of high-interest debt or your income fluctuates. You might be better off with another budgeting technique.
Choosing the right banking partner can also help you budget more effectively.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.50% APY on SoFi Checking and Savings.
FAQ
How does reverse budgeting help with saving money?
Reverse budgeting helps with saving money by prioritizing savings over expenditures. With this approach, you allocate a set percentage or amount of your income to savings first and then use the remaining amount to cover your expenses. This ensures that you don’t spend money you were planning to use for future goals.
Can reverse budgeting work for irregular income?
Reverse budgeting can be challenging for those with irregular income, such as gig workers. Here’s why: It relies on setting aside a certain amount of money into savings each month — before other expenses are paid. If your income fluctuates significantly, it may be difficult to meet your savings goal monthly.
However, you may be able to make it work by taking a flexible approach. For example, you might set a minimum savings rate based on your lowest expected income and then, during higher-income months, increase your savings contributions. Building an emergency fund can also help smooth out the fluctuations.
Is reverse budgeting suitable for paying off debt?
Reverse budgeting isn’t ideal for paying off debt, since it focuses on saving first, which can divert funds from debt repayment. If you have significant high-interest debt, prioritizing debt repayment might provide better financial benefits in the long run compared to the returns from savings or investments.
However, you might consider a hybrid approach — allocating a portion of your income to debt repayment and another to savings, ensuring you address both goals.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
SoFi members with direct deposit activity can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.50% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.50% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 8/27/2024. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Do you want to learn how to make $400 fast? Making extra money can be really helpful for unexpected expenses or saving up. You might need it for rent, a car repair, or a medical bill. Or maybe you’re saving for something special and just want to earn a little more. Sometimes, you need quick…
Do you want to learn how to make $400 fast?
Making extra money can be really helpful for unexpected expenses or saving up. You might need it for rent, a car repair, or a medical bill. Or maybe you’re saving for something special and just want to earn a little more.
Sometimes, you need quick cash, and $400 can make a big difference. Finding ways to make money fast doesn’t have to be hard and can be done in many different ways that fit your skills and schedule.
Best Ways To Make $400 Fast
Below are the best ways to make $400 fast.
1. Sell printables
Selling printables can be a great way to earn money quickly. Printables are digital products that buyers download and print at home. These can be anything from planners to party decorations to holiday cards.
The best part is you only need to create them once, and they can be sold many times.
After creating your printable, you’ll need a platform to sell it. Etsy is a popular choice because it’s easy to set up and lots of people shop there for printables. When listing your product, make sure to use good photos and detailed descriptions because this helps buyers find your printables.
I have several friends who make over $1,000 each month by selling printables, and they do it all from home! It’s a side hustle that I frequently think about starting.
You can learn more at How I Make Money Selling Printables On Etsy.
Do you want to make money selling printables online? This free training will give you great ideas on what you can sell, how to get started, the costs, and how to make sales.
2. Start a blog
Starting a blog can be a great way to make $400. It may not always be fast, but once you get your blog started, you may be able to make money and create new income streams.
To make money, you can place ads on your blog. You can also write sponsored posts or review products. Another way to earn is by promoting products you like through affiliate links. When someone buys a product through your link, you get a commission.
For me, I love blogging and I make over $400 a day online with my blog. I also get to work from home and have a flexible schedule, and I love it!
You can learn how to start a blog with my free How To Start a Blog Course (sign up by clicking here).
3. Answer online surveys
Taking online surveys is a simple way to make extra money. Many companies pay for your opinions to help improve their products. You can do this from home and on your own schedule.
It would take some time to make $400 by answering surveys, but it is easy and very flexible. Or, you could combine many of the side hustles on this list to reach your $400 goal faster.
The survey companies I recommend signing up for and the best paying survey sites include:
Freecash – This is one of my favorite rewards sites right now! You can get paid to take surveys, play games on your phone, and more.
American Consumer Opinion
Survey Junkie
Swagbucks
Branded Surveys
Prime Opinion
Five Surveys
User Interviews
KashKick
Pinecone Research
Many of the survey sites above give a sign-up bonus to new members and pay via free gift cards or cash to your PayPal account.
I have taken many, many surveys over the years, and I like how flexible they are to answer because you can answer them in your free time (such as when watching a TV show).
4. Sell your old phones
Got an old phone lying around? You can turn it into quick cash, many times up to (or over) $400. Many people don’t realize how much money is just sitting in their junk drawer. Phones, even ones that aren’t the latest model, can be worth quite a bit.
You can sell your old phone on:
Decluttr
eBay
Facebook Marketplace
Craigslist
And more!
You’ll want to remember to erase all your personal data before selling your phone. This is very easy, though, so don’t let it stop you from selling your phone.
5. Join Freecash
Freecash is a website where you can make money by doing fun and easy tasks on your computer or phone. When you join Freecash, you can get paid to test apps, play games, and complete surveys.
I have personally earned $722 from this site, and I have received $720 in free Amazon gift cards. $302 of that was from playing Bingo on my phone through Freecash in just one week!
Click here to sign up for Freecash for free.
6. Bookkeeping
Bookkeeping can be a way to make money from home. You don’t need a college degree to start, and many online courses offer the training needed to get going.
Bookkeepers help businesses manage their finances. This includes tracking income, expenses, and creating reports.
Many businesses, big and small, need bookkeepers. As a result, there’s always a demand for this service. With hard work and dedication, you might earn around $40,000 a year or more.
I recommend signing up for the free training – How to start a profitable bookkeeping side hustle, that can generate $2,000 to $16,000 a month (part-time)!
You can also learn more at How I Made $10,000+ Monthly With A Bookkeeping Business Online.
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This free training will show you how to start a profitable bookkeeping side-hustle in the next 30 days—even if you have no prior experience!
7. Proofread
Proofreading is a great way to make money quickly. Many writers need an extra set of eyes to catch mistakes in their work. As a proofreader, you’ll look for grammar, punctuation, and spelling errors. This job can be done from home, and you get to choose your own hours.
You can proofread all kinds of content. This includes articles, blog posts, books, student papers, and even advertising copy.
Due to the high demand for written content, there’s always a need for proofreaders. This makes it a stable way to earn money.
You can learn more at How To Start A Proofreading Business And Make $4,000+ Monthly.
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This free training teaches you how to start a proofreading side hustle (and how to earn $1,000+ per month!), even if you are brand new and don’t have any previous proofreading experience.
8. Sell jewelry online
Selling your jewelry online can be a way to make $400 fast. If you have items like engagement rings, luxury watches, or necklaces you no longer wear, you can turn them into cash.
Start by choosing a reliable place to sell your jewelry. For example, websites like Worthy can help you sell jewelry like rings and necklaces.
You can learn more at Where To Sell Jewelry: 12 Best Places For Extra Money.
9. Affiliate marketing
Affiliate marketing is a great way to make money online and it’s one of my favorite online business ideas. You can earn commissions by promoting products and services. When someone buys through your referral link, you get a percentage of the sale.
This is my favorite way to make money, as it can all be done online. I can make money while on a vacation or sleeping, and it’s easy to share links to products that you already use and believe in.
My favorite way to do affiliate marketing is by sharing links to products on a blog. You can learn more about this at Affiliate Marketing Tips For Bloggers – Free eBook.
10. Freelance on Fiverr
Fiverr is a great way to make $400 fast by selling your skills online. You can sell services like writing, graphic design, or even voice-overs.
You can easily start freelancing by creating a free account on Fiverr. You’ll choose a username and set up your seller profile where you highlight your skills and what you can sell to clients.
Next, create your first gig. A gig is a service you provide. You can start small, with gigs priced at $5, and then increase your rates as you gain experience (yes, this means that you can earn more than $5 per service that you sell on Fiverr!).
Also, another site to look into if you want to freelance online is Upwork!
11. Pet sitting services
Pet sitting is a great way to make extra money if you love animals. Many people need help taking care of their pets when they’re at work or on vacation. This job usually involves feeding, playing with, and sometimes walking the pets.
You can start by signing up on dog walking websites and apps like Rover or Wag. These platforms connect pet sitters with pet owners. You can choose your working hours and set your rates.
We used to have a dog sitter (back when we had dogs), and we paid her $35 to watch each dog each night (she watched them in her own home). That means she was making $70 a night and we typically had her watching our dogs for 7 days or longer.
12. Sell handmade crafts on Etsy
Selling handmade crafts on Etsy is a great way to make $400 fast. You can set up your own shop and start selling right away. People love unique, handmade items, and Etsy is the place to find them.
You can sell all kinds of things on Etsy, like jewelry, woodwork, soap, and knitted items.
Etsy charges a fee for each listing and a transaction fee when you make a sale, so you’ll want to make sure to price your items to cover these costs and still make a profit.
13. Sell lawn care services
Selling lawn care services is a great way to make $400 quickly. If you have a lawn mower and some basic tools, you can sell your services to neighbors or people in your community.
Start by mowing lawns. You can charge around $30 to $50+ per lawn, depending on the size. If you mow just 8 to 10 lawns, you’ll reach $400 fast.
14. Babysit for neighbors
Babysitting is a way to make money fast. Many parents need someone to watch their kids for a few hours, so you can sell your help during weekends or evenings.
Tell your neighbors and friends that you are available to babysit, or even post in local parent Facebook groups. Let them know your rates and how they can reach you. You might be surprised by how many opportunities you get.
Babysitting rates can vary, but you can charge around $15 to $25 per hour, depending on where you live.
15. Drive for a rideshare service
One of the fastest ways to make $400 is to drive for a rideshare service like Lyft or Uber. You get paid for each trip you complete, and you can work as much or as little as you want.
To make the most money, you can focus on driving during peak hours. These are the times when people need rides the most, like mornings and evenings, making it easier for you to get more trips.
Another tip is to drive during special events or on weekends. People usually need rides for events, and requests increase, which means more money for you.
16. Sell clothes
Whenever I needed money fast, I would go through my closet and find clothes to sell. I did this a lot, especially when I was younger (and had more clothing, haha).
Selling clothes is a quick and easy way to make extra money. You probably have clothes in your closet that you don’t wear anymore. These might be items that don’t fit, are out of style, or just don’t suit you anymore. Instead of letting them take up space, you can sell them online.
There are many websites and apps where you can sell your clothes. Poshmark and ThredUp are popular choices. On Poshmark, you can create listings with photos and descriptions of your clothing. Once your item sells, you ship it to the buyer. ThredUp is more hands-off. You send your clothes to them, and they handle the selling process.
If you prefer selling in person, you can look for local consignment shops or secondhand stores. These places buy gently used clothes and resell them. You might not make as much money as selling online, but it’s fast and super easy.
You can learn more at 16 Best Places To Sell Clothes For Cash.
17. Become a virtual assistant
Becoming a virtual assistant (VA) is a great way to make $400 fast.
Virtual assistants help businesses with tasks they don’t have time for. This can include managing emails, scheduling appointments, and handling social media accounts.
You can set your own hours and work from home, which is one of the best parts of this job. Whether you want to work part-time or full-time, being a VA can give you flexibility.
As you gain experience, you can increase your rates. New VAs might start at $15 to $20 per hour, but experienced VAs can earn much more. You could make up to $50 per hour if you specialize in certain areas, for example.
You can learn more at Best Ways To Find Virtual Assistant Jobs.
18. Rent out your extra space
Renting out your extra space is a great way to make extra money.
If you have a spare room in your house, you can list it on Airbnb. Many people need short-term rentals; you can charge by the night and this can add up quickly. Another way to make money with a spare room is to find a long-term renter. Back when I had spare bedrooms, I would actually rent out each room for $400.
You can even rent out your storage space, a parking spot, and more. A site to start with for this is Neighbor.
19. Donate plasma
Donating plasma is a quick way to make some extra money. You can make around $200 a month by donating regularly. Some centers even have bonuses that can boost your earnings to $400 in your first month.
You can learn more at How To Make Money Donating Plasma.
20. Sell unwanted gift cards
Have gift cards you don’t plan to use? You can turn them into cash quickly. Many places will buy them from you and pay real money. This is an easy way to make some quick cash.
Some ways to sell gift cards include:
Raise
CardCash
CardSell
Gameflip
GiftCash
21. Join a focus group
Joining a focus group can be a great way to make money quickly. Focus groups pay you for your opinion on products, services, or ads. These groups can be either online or in person. This makes them super flexible for any schedule.
Payment varies a lot, with some focus groups paying around $20 for a quick session, while others can pay up to $400 for more detailed feedback. The amount usually depends on the length and type of study. Even a one-hour session can earn you between $50 and $100.
I once did a focus group that paid me about $400 for just 75 minutes. That’s more than what most focus groups pay, but usually, you can expect to earn between $50 to over $100 per hour. The amount you get paid depends on how long the study is and what it’s about, but there are some studies that pay more.
One focus group company that I recommend is User Interviews. User Interviews recruits participants to answer surveys and share their feedback.
22. Sell video games
Selling video games can be a quick way to make money. If you have games you no longer play, why not turn them into cash?
You can sell your old video games in ways such as:
Decluttr
eBay
Amazon Trade-In
OfferUp
Facebook Marketplace
23. Sell power washing services
Selling power washing services can help you make $400 fast. Many people need their driveways, sidewalks, and houses cleaned.
You’ll need a power washer to get started. You can buy one or rent it from a local store.
You can advertise your services on social media or in your neighborhood and create flyers and business cards to hand out.
You can charge by the hour or by the job. Typical rates can be between $50 and $100 an hour. You can clean a driveway in just a couple of hours, so you can probably easily make $400 in one weekend.
24. Tutor
Tutoring students can be a quick way to make $400. You can help kids with their homework, teach a language, or explain tough subjects like math and science. Many parents are willing to pay good money for someone who can help their children do better in school.
Online tutoring is flexible too because you can set your own hours and work from home. Websites like Tutor.com, Wyzant, and Preply are great places to start.
Tutoring can pay well too. Rates can range from $15 to $60 or more per hour, depending on the subject and your experience (for example, advanced subjects like calculus or test prep can pay even higher rates).
25. Become a freelance writer
Freelance writing is a great way to make $400 fast with an online business. You can write for blogs, websites, magazines, and companies. Since you work for yourself, you get to choose which projects to take on.
Freelance writing pays well and beginners can earn around $50 per article, but as you gain experience, you can charge more. Some experienced writers make over $1,000 per 1000-word article.
I have been a freelance writer for years and I have definitely enjoyed it. It’s a fun online job where you can work from home and choose the subjects you want to write about.
26. Sell stock photos
If you love taking pictures, you can turn that hobby into cash by selling stock photos. Many websites let you upload your images for sale.
Some popular ones include Shutterstock, Adobe Stock, and Depositphotos. People such as businesses, bloggers, and marketers buy these photos for their own use. You can earn money each time someone downloads your photo.
You might not make $400 overnight, but your earnings can add up quickly with enough photos in your portfolio.
You can learn more at 18 Ways To Get Paid To Take Pictures.
27. Rent out your car
Renting out your car can be a simple way to make extra cash. There are many platforms like Turo that let you rent your car to others.
You don’t have to do much. Just list your car, set the price, and wait for renters. These platforms handle insurance and payments, making it easier for you.
I have rented a car while on vacation on Turo several times, and I enjoyed it each time. It is an easy-to-use site!
28. Wash cars
Washing cars is a great way to make quick money.
You can start by selling your car washing services to neighbors, friends, and family. You can also make flyers and put them up around your community to let people know about your business.
29. Participate in a medical study
Participating in a medical study can be a quick way to make $400. Many research studies pay volunteers for medical research.
You can find opportunities in local hospitals, universities, and clinics.
When my husband was younger, he took part in a few medical research studies to help us make extra money. He usually earned about $1,000 for a weekend of his time. These were very in-depth, though, with lots of blood work and needles (so you may want to ask about this if that makes you squeamish).
Recommended reading: 19 Best Places To Find Paid Research Studies
30. Sell furniture
If you have any old furniture lying around, like a couch, coffee table, dresser, or dining set, then you can make quick cash by selling it.
You can start by listing your items or selling to places such as:
Facebook Marketplace
Craigslist
eBay
AptDeco
1stDibs
Consignment shops
OfferUp
Etsy
You can learn more at 15 Best Places To Sell Used Furniture For Cash.
31. Help people move
You can make $400 fast by selling moving services. People always need help moving, whether it’s across town or to a new apartment.
You can start by advertising your services on social media and local websites like Craigslist and by letting your friends and family know you are available too.
You can charge by the hour or by the job. Some movers charge $50 an hour, so you could reach your goal quickly. Make sure you have the necessary tools and equipment, such as a dolly and packing supplies.
32. Drive for a delivery service
Driving for a delivery service is a great way to make some quick cash. There are many gig economy apps like DoorDash, Instacart, Uber Eats, and Grubhub that hire drivers to deliver food and groceries. You can sign up easily and start working in a few days.
You get to pick your own hours, making it a flexible job. This means you can work in the mornings, evenings, or weekends. Plus, you can make between $12 and $20 per hour and often get tips on top of that.
33. Transcribe audio files
Transcribing audio files into text is a good way to make extra money. As a transcriptionist, you listen to audio recordings and type what you hear. This job requires good listening and typing skills.
You don’t need a lot to get started. Just a computer, internet access, and a pair of headphones will do.
Many companies pay per audio hour, not the time it takes you to transcribe. Rates can range from $15 to $30 per audio hour. Once you get the hang of it, you might earn $400 a month.
You can learn more at 18 Best Online Transcription Jobs For Beginners To Make $2,000 Monthly.
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In this free training, you will learn what transcription is, why it’s a highly in-demand skill, who hires transcriptionists, how to become a transcriptionist, and more.
34. Clean houses
Cleaning houses is a way to make $400 quickly.
People are always looking for help to keep their homes tidy. You can sell your cleaning services to friends, neighbors, or find clients online (you can post an ad on sites like Facebook Marketplace or Craigslist).
You don’t need much to start. Basic cleaning supplies like sponges, sprays, and rags will do, which is great.
You can charge per hour or per job. So, if you charge around $20 to $25 an hour, you can make $400 in just 2 days of work.
35. Sell your wedding dress
One quick way to make some cash is by selling your wedding dress.
You can get a good amount of money, especially if your dress is from a popular designer or in great condition.
There are several websites and stores that buy used wedding dresses. Or, if you want to sell locally, try visiting consignment shops. These stores may take your dress on consignment and pay you when it sells. Or, they might buy it outright, giving you money up front.
36. Do junk removal
Junk removal can be a quick way to make $400. Many people need help getting rid of old furniture, appliances, or just clutter. You don’t need special skills, just some muscle and a vehicle to carry the junk.
You can find work by advertising on websites like Craigslist or Facebook Marketplace. Local community boards are also good places to post your services.
You can charge by the hour or by the job. Many junk removal services charge a minimum fee of around $100 to $150 per load (and go up from there depending on weight and size). With some hard work, it’s possible to reach the $400 mark in a day or two.
37. Host a garage sale
Hosting a garage sale is one of the quickest ways to make $400, especially if you have items you no longer use.
You can start by decluttering your home and picking out things like clothes, toys, furniture, kitchen items, and electronics that are just taking up space. The average household has hundreds of thousands of things (yes, that’s not a typo!), so there’s probably something you can sell.
Once you’ve gathered your items, pick a weekend to host your sale, preferably when the weather is nice. To attract more buyers, advertise your sale on social media, local community boards, and garage sale websites.
You can even team up with neighbors or friends to increase foot traffic. By the end of the weekend, you can easily reach your $400 goal while also clearing out clutter from your home!
Frequently Asked Questions
Below are answers to common questions about how to make $400 fast.
How to make $400 dollars in one day?
You can make $400 in one day by selling more expensive items like old phones, laptops, or collectibles. If you have time to build a business, then you may want to try becoming a freelancer, such as with writing or graphic design.
How to make $400 dollars as a kid?
For kids who want to make $400, you may want to try selling handmade crafts or old toys. Yard work, pet sitting, or babysitting are great ways to earn money quickly too.
Are there any fun ways to earn $400 as an 11-year-old?
Yes, there are fun ways for an 11-year-old to make $400 fast! You can walk dogs, set up a lemonade stand, or sell baked goods. You might also like creating and selling crafts or printables with help from a parent.
How to make $400 a day online?
If you want to learn how to make $400 fast online, then selling items online is usually the fastest. You could list items from around your home, like furniture or old electronics, on Facebook Marketplace and possibly get paid the same day if you find a buyer quickly. If you want to eventually in the future make $400 in a single day online, then you could do things like blogging, freelance writing, and virtual assisting.
How to make $400 in a week?
You can make $400 in a week by selling items on sites like eBay or Facebook Marketplace. You can also look for quick gig jobs (such as on the Craigslist gigs section where they list random odd jobs like handyman gigs), do freelance work, or sell services like tutoring or lawn care.
What can I sell for $400?
You can sell old phones, laptops, furniture, jewelry, or clothes to make $400.
How To Make $400 Fast – Summary
I hope you enjoyed this article on how to make $400 fast.
Making $400 quickly is possible if you have the right plan. You can sell things you don’t need, sell your skills as a freelancer, take online surveys, and more.
There are lots of ways to reach your goal, and it’s important to pick something that works with your schedule and skills.
What do you think is the best way to make $400 fast?