About 43 million Americans hold federal student loan debt and, for some, paying off that debt can be a burden. Many borrowers have access to programs that can pause or reduce their payments, but a new survey finds some borrowers may be forgoing the proper channels and stopping repayment entirely in hopes of student loan forgiveness.
Nearly one in three (31%) student loan borrowers have slowed the repayment of their loan(s) because they hope to see their loans reduced or forgiven by the federal government, according to a recent NerdWallet survey conducted online by The Harris Poll among more than 600 U.S. adults who currently have student loans. And nearly one in four (23%) have stopped their student loan payments altogether for the same reason.
Notably, the survey didn’t ask whether borrowers who slowed or stopped their repayments did so after entering into forbearance or deferment plans. Further, student loan delinquencies have remained largely unchanged since the COVID-19 payment pause ended last October, according to data from the New York Fed. This is likely due to a one-year “on-ramp” grace period set to expire Sept. 30, during which the Department of Education is not reporting any borrowers who miss payments as delinquent.
A worry for borrowers, and a top election issue
Despite the Supreme Court blocking the Biden Administration’s broad plan to cut up to $20,000 in student loan debt per eligible borrower last June, the White House has forgiven roughly $168.5 billion over the last four years, largely through existing forgiveness programs like Public Service Loan Forgiveness and income-driven repayment plans. The president’s current “plan B” student loan forgiveness plan would reduce or eliminate loan debt for a more targeted group of individuals.
There’s no guarantee this plan or anything resembling it will go into effect. Just as legal challenges derailed the administration’s first, broader push for debt relief, lawsuits could force the administration or its successor to further scale back this set of proposals. This fall’s elections could also determine how debt relief proceeds — if at all.
Borrowers seem to have taken note.
A quarter (25%) say they are concerned recent student loan forgiveness efforts will be reversed by the courts. And more than one in five (22%) say that student loan forgiveness is one of the most important issues when choosing a presidential candidate.
Not paying student loans can hurt you
There are consequences if you fail to keep up with your student loan payments.
If you have federal student loans, loans become delinquent as soon as you miss a payment. Loan servicers can begin charging late fees 30 days after that. After three months, servicers may begin reporting the debt to credit reporting agencies, dragging down your credit score. Eventually, student loans enter default and your loan holder will be able to garnish your wages and withhold tax refunds and Social Security payments from you.
The default process happens even faster for student loans held by private lenders.
Pick the repayment plan that’s right for you
While the repercussions of not paying student loans can be serious, the good news is you have several repayment options for federal student loans. (Private student loan repayment options vary by lender.) Use the Education Department’s loan simulator to estimate your monthly bills and overall repayment journey under different repayment plans.
Standard repayment: Under this plan, you’ll pay the same amount each month for a decade. This is generally the fastest way to pay loans off, and therefore you may pay less total interest. You’re placed into this plan by default when repayment begins.
Income-driven repayment: If payments under standard repayment seem too high, you can apply for income-driven repayment (IDR). Under IDR plans, you’ll pay a portion (usually 10-20%) of your discretionary income each month for a set period of time (usually 20-25 years), after which your remaining debt will be forgiven.
Graduated payment: Consider the graduated payment plan if an IDR plan isn’t a good fit, but you want to lower your monthly bill right now. Under this 10-year plan, your payment will start low and increase every two years. The advantage is you’ll be able to free up money in the short term for other needs. The downside is you may end up paying more in interest than under the standard repayment plan.
Extended repayment: If you owe more than $30,000 in loans, you can apply for the extended repayment plan. This plan gives you up to 25 years to repay your loans and you can choose to pay the same amount each month or a gradually increasing amount as under the graduated plan.
Borrowers seem to be taking advantage of these options, as a third (33%) say they’ve changed their student loan repayment plan in order to make their payments more manageable, according to the recent survey.
Before defaulting on your loans, consider deferment, forbearance or an IDR plan
If you simply can’t afford to make any student loan payments right now, you still have options: namely, deferment and forbearance. More than a quarter (27%) of student loan borrowers have used one or both of these programs to pause their federal loan payments, according to the survey.
Both pause your payments and protect your credit from taking the hit it otherwise would if you simply stopped making payments. But the similarities end there.
First, look into deferment. Under deferment, interest does not accrue on your subsidized federal student or Perkins loans while payments are paused (interest will continue to accrue on unsubsidized federal or private student loans).
You must meet a qualifying life event in order to qualify for deferment. Qualifying events include attending school at least half time, being active duty military or in the Peace Corps, experiencing unemployment or earning less than 150% of your state’s poverty guidelines, receiving some forms of public assistance or undergoing cancer treatment.
If you don’t qualify for deferment, consider forbearance. Under forbearance, interest will continue to accrue on your loans (whether federal student loans or private loans) while repayment is paused, and you’ll be limited to a 12-month break from payments.
An income-driven repayment plan can also help you manage payments. If you’ve lost your income, or you earn under a certain threshold, you may qualify for $0 payments under an IDR plan — and you’ll still make progress towards IDR forgiveness while making these $0 payments. Even if you don’t qualify for $0 payments, IDR plans can lower your bills to a more manageable level.
METHODOLOGY
This survey was conducted online within the United States by The Harris Poll on behalf of NerdWallet from July 16-18, 2024 among 2,076 U.S. adults ages 18 and older, among whom 625 have student loans. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.5 percentage points using a 95% confidence level. This credible interval will be wider among subsets of the surveyed population of interest. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact [email protected].
Disclaimer
NerdWallet disclaims, expressly and impliedly, all warranties of any kind, including those of merchantability and fitness for a particular purpose or whether the article’s information is accurate, reliable or free of errors. Use or reliance on this information is at your own risk, and its completeness and accuracy are not guaranteed. The contents in this article should not be relied upon or associated with the future performance of NerdWallet or any of its affiliates or subsidiaries. Statements that are not historical facts are forward-looking statements that involve risks and uncertainties as indicated by words such as “believes,” “expects,” “estimates,” “may,” “will,” “should” or “anticipates” or similar expressions. These forward-looking statements may materially differ from NerdWallet’s presentation of information to analysts and its actual operational and financial results.
In the Blue Mounds Driftless Area of Black Earth, Wisconsin, a $4,500,000 property offers ranch-worthy acreage, a grand 5-bedroom home, a custom horse barn, and a slew of standout amenities.
Among them: a private airstrip and helicopter pad, so the future owners won’t have to spend any time in traffic trying to get here.
The property is listed with Shelly Sprinkman of Sprinkman Real Estate — but not for long. The listing is already marked as “Contingent” on Zillow.com, which means Shelly may have already secured a buyer in the short time the house has spent on the market (it was listed merely a month ago).
So let’s take a quick look at this sprawling Wisconsin property — before a buyer takes it off the market.
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A 234-acre spread anchored by a 5-bedroom main house
Summing up the merits of the Blue Mounds property, listing agent Shelly Sprinkman with Sprinkman Real Estate tells us that “This beautifully updated home sits on an expansive 234 acres, offering a unique combination of amenities rarely found in one place.
“With its own airstrip, helicopter pad, private pond, and a custom barn featuring five horse stalls, this property is truly one-of-a-kind. It’s not just a home; it’s a lifestyle.”
The main house has over 5,000 square feet
At the center of it all stands a two-story home with 5,180 square feet of living space, 4 bedrooms, a gourmet kitchen, and a primary ensuite with vaulted ceilings.
The interiors have been extensively renovated
Originally built in 1993, the Wisconsin house has been extensively renovated at the hands of Associated Housewrights, a Madison-based residential design-build firm specializing in remodeling, additions, and new home projects for south-central Wisconsin clientele.
And feature an open floorplan and gourmet kitchen
Inside, we find bright, light-filled interiors thanks to the open floor plan with soaring wood-planked ceilings. Highlights include a captivating grand staircase, and a gourmet kitchen with premium Sub-Zero + Wolf appliances.
There’s a barn with 5 horse stalls
Also on the grounds of the property, we find a masterfully constructed barn featuring 5 horse stalls and panoramic views.
See also: Inside a luxury $7.75M Southampton house with Kentucky Derby-winning horse ties
An equestrian lover’s dream
“The custom barn, designed with five horse stalls, adds to the property’s unique appeal, making it perfect for equestrian enthusiasts or those looking for unparalleled space and luxury,” Sprinkman says.
A collection of outdoor amenities
Outside amenities include a spacious deck, a sweeping paver patio, covered seating areas with al-fresco dining, and a large pond visible from inside the house (and from most of the seating areas). The generous acreage also allows for many more amenities to be added.
Including an airstrip & helicopter pad
The highlight of the property’s amenity roster caters to the ultra-rich: the Wisconsin house has an airstrip and helicopter pad, ensuring future owners won’t have to spend time in traffic when heading to their 234-acre Wisconsin compound.
“Nothing else like it” on the market
As the listing agent rightfully points out, “This property represents a once-in-a-lifetime opportunity in this area. There is nothing else like it currently on the market. With the combination of a beautifully updated home, extensive land, and extraordinary amenities, it’s an exceptional value at $4.5 million.”
But interested parties should act quickly, Shelly shares: “Given the current market conditions, this property is a rare gem that is unlikely to be available for long.”
Window of opportunity closing fast
As previously mentioned, the house is already under contract, a little over a month after listing for sale, an unusually short amount of time for million-dollar listings, which typically take far longer to secure a buyer. This means Shelly was proven right when she said that it likely won’t be available for long.
Nevertheless, potential buyers should still reach out to her — just in case the deal falls through.
More stories
You can buy the house Prince built for his mom near Minneapolis for $699K
Taliesin, Frank Lloyd Wright’s Wisconsin house and its three (tragic) lives
Where does Warren Buffett live? The billionaire’s modest house in Omaha
In the not-so-distant past, aka before August 17th, 2024, real estate commissions worked a lot differently. Or at least the rules governing them did.
Back then, listing agents would put a property on the multiple listing service (MLS) that included an explicit, stated commission (offer of compensation) to the buyer’s agent.
This commission was actually paid for by the home seller, who also paid their listing agent, out of the sales proceeds.
The offer of compensation ensured both agents would be paid for their services and representation.
Real Estate Commissions Inflated?
While that setup was all good and well on the surface, some argued that it allowed agents to collude with one another and keep commissions inflated.
At the same time, there was an argument that agents didn’t exactly highlight the fact that commissions were negotiable either.
So both buyer and seller were often told the fee is 2.5%, or 3%, end of story.
The end result was a 5-6% commission paid by the seller to both agents on the transaction. A pretty penny to be sure.
Perhaps more problematic, buyers were often told they didn’t have to pay for representation and that the buyer’s agent services were “free.”
After all, they didn’t have to pay anything out of pocket. It was funded via the sales proceeds of the transaction.
Of course, the argument was that the home buyer actually did pay for it via a higher sales price needed to absorb some or all of that cost.
But wait, there’s more!
This arrangement also allowed a buyer’s agent to search for homes on the MLS by commission offered.
In short, they could steer their buyer client to just the homes that offered the highest compensation.
For example, only to properties that offered 3% commission to the buyer’s agent. If it was only 1.5% or 2%, they’d maybe skip those.
Clearly all of this wasn’t OK, and it’s what ultimately led to the big NAR lawsuit and settlement.
“Concessions Considered”
Fast forward to today and those compensation fields on the MLS have been removed entirely.
In their place might be a new field called something like “Concessions Considered,” complete with a yes/no option.
This tells buyer’s agents that the seller will consider offering concessions, which can be used to cover their compensation.
Knowing this, an agent will feel more comfortable representing a buyer, who may not (probably won’t!) have money to pay their agent out of pocket.
After all, buyers often barely have enough cash for down payment and other closing costs. Now they have to worry about paying their agent too.
However, it can’t reveal how much they’ll offer as that would again amount to steering concerns.
Instead, it’s just a signal that the seller is willing to negotiate and take the compensation burden off of the seller.
But that’s just the MLS rule. They can put the exact amount on their brokerage website, or on social media, or verbally communicate it. So it’s semi-pointless. More on that in a moment.
Buyer’s Agents Need to Set Their Comp in Advance
On the other side of things, buyer’s agents now have to set their compensation in advance and stick to it.
Again, the idea here is to have separate negotiations with their own client, which are not influenced by a seller or listing agent.
To take it a step further, the buyer’s agent should really have a set fee for their services that has nothing to do with what a seller/listing agent might offer.
Why? Because it’s their service! They shouldn’t earn more for a duty they perform simply because a seller says, “Here, we can get you more!”
Anyway, the settlement now requires buyers to enter into a written buyer agreement before they can tour a property.
At that time, the agreement must also “specifically disclose the amount or rate of compensation an agent or broker will receive or how this amount will be determined.”
“The amount must be objectively ascertainable and must not be open-ended. For instance, $X or X% is permissible, but a range of commission is not.”
For example, buyer and agent will sit down ahead of time and agree on say 2% of the sales price. Or $7,500. Etc.
That amount of compensation should not change, regardless of what a seller or listing agent offers on a given property once they begin touring and making offers.
The Original Fee Agreed Upon Drives the Compensation
Now let’s imagine buyer and agent are finally ready to make an offer. Remember, they had to sit down and discuss compensation before touring homes.
When that took place, the buyer and agent agreed to a 2% buyer agent fee. They don’t want to pay it out of pocket, so they scan listings where they think or know the seller will pay it.
They see in the MLS notes that concessions are considered on X listing and schedule a tour. They like the property but the listing agent doesn’t explicitly tell them what they’re offering.
Remember, this is apparently OK to do now outside the MLS, but this particular agent keeps their cards close.
So they prepare an offer and ask for the 2% fee and offer X price for the home. The listing agent comes back and says my seller will only offer 1.5%.
At this point, the buyer’s agent could theoretically accept it and try to get the missing 0.5% from their buyer directly. But I don’t believe the buyer is under an obligation to do so.
Alternatively, they could try to counter to get that extra 0.5%, or simply agree and move forward.
This could also work the other way where the buyer’s agent originally agreed to a fee of 2% but sees that the seller is offering a full 3% compensation.
In this scenario, the listing agents tells the buyer’s agent upfront exactly what they’re willing to offer in terms of compensation.
Depending on the state, the buyer’s agent can’t collect the additional 1% being offered. And if they do try to amend their agreement with their buyer, the buyer needs to sign off on it.
At that point, the buyer may ask why the agent is earning an additional 1% of the sales price. They could also say they want that 1% to cover their own closing costs instead.
This situation could evolve as time goes on, and might vary state by state. But it seems the spirit of the settlement calls for agents to stick to their originally agreed upon commission.
Not hope it increases if a seller or listing agent happens to offer more. That could amount to steering, especially if it’s openly advertised.
Another issue I foresee is buyer’s agents lowballing their compensation upfront, then hoping to earn more by scanning higher-compensation listings.
For example, they’ll agree to work with the buyer for a low 1% fee, then steer the buyer to properties they know offer 2.5% or 3%.
Again, that’s against the spirit of the changes, and I believe it’s not even allowed in the state of California.
If you’re a buyer, watch out for an amendment where the agent is all of sudden earning more. Tell them you want the excess instead to pay your closing costs!
How Real Estate Agents Can Still Be Paid
– Fixed fee by the home buyer – Via listing agent (cooperative commission) – Via seller concessions
You might be wondering how real estate agents can still be paid in light of these changes.
There are actually more ways to get paid because some buyers will now pay their buyer’s agent directly.
This was always technically an option I suppose, but never really happened. Going forward, it could happen a lot.
This is especially true if listing gents and their sellers offer nothing to the buyer’s agent, which I’m hearing happen quite a bit.
It might also become more common if the fee comes down, or is an hourly or flat rate that’s more reasonable to be paid out of pocket.
However, buyer’s agents can still be compensated via traditional means, such as by cooperative commission where a listing agent will share a portion of their compensation.
For example, if the seller says you get 4% total, either 2% to each agent, or some other split.
Lastly, there’s the possibility of seller concessions being used to cover the buyer agent’s commission.
This typically results in a higher sales price to cover the concessions. So if the agent’s fee is $10,000, the purchase price is adjusted higher by $10k and needs to appraise.
Note that you cannot currently finance real estate agent commissions in the loan amount.
Key Takeaways to Remember
Real estate commissions are completely negotiable and are not set by law
As a home buyer you need to negotiate your buyer agent fee upfront before touring homes
As a seller you have options to offer zero to buyer’s agent or what was typical in your market (e.g. 2.5%), or something in between
Commissions can no longer be listed on the MLS (but seller can say concessions considered)
Compensation offer can be communicated via brokerage websites and all other channels like social media, text, email, phone call, etc.
Listing agent may or may not share exact offer of compensation upfront
There are a variety of ways for the commission to be paid to the buyer’s agent
Watch out for amendments where buyer’s agent commission increases (careful what you sign)
If your agent wants more commission than originally agreed upon ask for a closing cost credit in lieu so the money goes to you
Keep reading: How much do real estate agents make?
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 18 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on Twitter for hot takes.
You may think of a bank as simply a safe place to put your money. But banks do a lot more than accept deposits. They also extend loans, facilitate payments, exchange currency, set monetary policy, and provide a range of other financial services to individuals, businesses, and governments. Here are key things to know about banks, including how they work, how they make money, and the different products and services they offer.
What Is a Bank?
By definition, a bank is an institution that accepts deposits in checking and savings accounts and makes loans. In serving both functions, banks act as intermediaries between depositors (who essentially lend money to the bank) and borrowers (to whom the bank lends money). The money the bank pays to depositors and charges on loans is called interest.
Banks also offer a range of other financial products and services, including:
• Credit cards
• Investment accounts
• Wealth management services
• Individual retirement accounts (IRAs)
• High-yield savings accounts
• Certificates of deposit (CDs)
• Money market accounts
• Currency exchange
• Safe deposit boxes
Banks also facilitate payments — from employers to employees, buyers to sellers, and taxpayers to the government — and play a major role in the nation’s economy. There are also many different types of banks, including retail banks, corporate banks, and central banks.
How Do Banks Make Money?
Banks typically generate revenue through a variety of channels. These include:
• Interest on loans: Banks lend money to individuals and businesses at higher interest rates than what they pay on deposits, earning the interest rate spread.
• Fees: Banks may charge fees for various services, including account maintenance, overdrafts, wire transfers, and out-of-network ATM usage.
• Investment income: Banks may invest in securities, bonds, and other financial instruments, earning returns on these investments.
• Interchange fees: When customers use their debit or credit cards, banks earn fees from merchants processing the transactions.
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A Brief History of Banks
The concept of banking dates back to ancient civilizations, when temples were used as safe places to store valuable items and grain, and priests would lend these resources to local farmers and merchants. The temples were also responsible for keeping records of these transactions, laying the groundwork for bookkeeping.
The first modern banks emerged in Renaissance Italy, with institutions like the Medici Bank setting the standard for banking operations. Over centuries, banks evolved, expanding their products and services and adopting technological advancements to meet the growing demands of consumers and businesses. Today, banks are integral to the global economy.
Modern Bank Products for Consumers
Modern banks offer a variety of products tailored to meet the financial needs of consumers. Common banking products include:
Loans
Banks provide various types of consumer loans, such as mortgages, personal loans, and auto loans. These loans help individuals finance large purchases and manage their cash flow.
Savings and Checking Accounts
Savings and checking accounts are fundamental banking products. A savings account is designed to hold cash you don’t need right away and allow you to earn interest and grow your money over time.
Checking accounts are set up to offer easy access to funds for everyday transactions. They come with checks and typically a debit card that can be used for purchases or to withdraw funds at an ATM. Checking accounts generally earn little or no interest, though some banks now offer high-yield checking accounts.
Mortgages
Banks offer mortgage loans to help individuals purchase homes. These long-term loans typically come with fixed or variable interest rates and generally require you to use the property being purchased as collateral for the loan. Mortgage terms are typically 15, 20, or 30 years.
Investing Accounts
Many banks offer investment accounts, including IRAs and taxable brokerage accounts. These accounts enable customers to invest in stocks, bonds, mutual funds, and other financial instruments designed for long-term growth.
Credit Cards
Credit cards provide consumers with a revolving line of credit, allowing them to make purchases and pay for them over time. Banks earn interest and fees from credit card users, making it a significant revenue source.
Certificates of Deposit (CDs)
CDs are time deposits that offer a fixed interest rate for a specified term. You agree to leave your money in the account for a set period of time (which generally range from three months to five years). In return, these accounts typically pay a higher interest rate than a standard savings account.
Money Market Accounts
A money market account is a hybrid account that offers competitive interest on your balance, along with the conveniences of a checking account, such as a debit card and checks. However, you may be limited to a certain number of withdrawals per month. Some money market accounts also have minimum balance requirements.
Useful Bank Features
In addition to products, banks offer various services to help customers manage their money. Here are some features you may want to look out for when exploring different bank options.
Customer Support
Banks typically offer customer support through various channels, including phone, email, online chat, and in-person assistance. Whether you need assistance with your checking account or help choose between two banking products, a customer service rep can generally point you in the right direction.
Credit Score Checkers
Many banks offer tools that allow customers to monitor their credit scores for free. This service allows you to stay informed about your credit health and, if necessary, take steps to build your scores. Having strong credit can help you unlock credit cards, mortgages, and other types of loans with attractive rates and terms.
ATMs
Whether you open an account at a traditional brick-and-mortar institution or an online-only bank, you’ll typically have access to a wide network of fee-free automated teller machines (ATMs). This allows you to withdraw cash or make deposits without needing to visit a branch during business hours.
Online/Mobile Banking
Online banking and mobile banking apps allow you to monitor your accounts, transfer money, pay bills, and deposit checks from your computer or mobile device.
Financial Planning Tools
Many banks offer financial planning tools that help customers budget, save, and invest wisely. These tools can include calculators, goal-setting features, and personalized financial advice.
Bank Regulations
While banks are typically privately owned entities that must answer to their shareholders, banking is a highly regulated industry. Regulatory bodies, such as the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC), oversee banks’ operations, ensuring they adhere to laws and maintain sufficient capital reserves. This is to minimize disruptions and ensure the U.S. banking system runs smoothly.
The majority of U.S. banks are also insured by the FDIC. This covers deposit accounts up to $250,000 per insured bank, per depositor. Co-owners of joint accounts at the same bank are typically each insured up to $250,000. The agency’s BankFind site can help you identify FDIC-insured banks throughout the country.
Types of Banks
There are several different types of banks, each serving different purposes and customer bases. The large global banks often operate separate arms or divisions for each of these categories.
Retail Banks
Retail banks focus on individual consumers, rather than businesses or other banks. They provide personal banking services, such as checking and savings accounts, personal loans, mortgages, auto loans, short-term loans like overdraft protection, and credit cards. They may also offer access to investment products, such as mutual funds and IRAs.
While some retail banks offer in-person services through brick-and-mortar locations, others operate exclusively online. Due to lower overhead costs, online banks tend to offer higher yields on savings accounts and charge lower (or no) fees.
Recommended: What Is Neobanking and How Does it Work?
Corporate Banks
Corporate banks (also known as commercial banks) cater to large businesses and corporations. They also serve government agencies and institutions like colleges and universities. Along with business checking and savings accounts, these banks offer business loans and lines of credit, letters of credit, payment processing, foreign exchange transactions, and more for their clients.
Investment Banks
Investment banks serve as intermediaries in large, complex financial transactions. They specialize in initial public offerings (IPOs), raising capital, facilitating mergers and acquisitions, and providing advisory services to corporations and governments. Unlike retail banks, they do not take deposits from or provide loans to the general public.
Central Banks
Central banks manage a nation’s monetary policy, regulate the banking industry, and act as a lender of last resort. The central bank in the U.S. is the Federal Reserve (a.k.a, “the Fed”). The Fed sets the federal funds rates, which impacts everything from the annual percentage yields (APYs) you earn on savings accounts to the interest rates you pay on credit card balances and loans. Unlike the banks types listed above, central banks do not deal directly with the public.
Pros and Cons of Banks
Retail and commercial banks offer myriad benefits, but they also have some downsides. Here’s a look at how the pros and cons stack up.
Pros
Cons
Safe and secure
Potential fees for various services
Easy access to funds
Lower interest rates on deposits
Wide range of services
Potentially complex fee structures
Highly regulated
Potential for poor customer service
Pros
• Safety: Banks provide a secure place to store money, reducing the risk of theft or loss. Deposits in most banks are federally insured (up to certain limits), which means that even if the bank were to fail, customers will still recover their funds, up to the insured limit.
• Convenient access to funds: Banks offer easy access to funds through a network of branches, ATMs, and digital banking platforms.
• One-stop shop: Banks provide a variety of financial services beyond basic checking and savings accounts, allowing you to manage all aspects of your finances under one roof.
• Regulatory protection: Banks are heavily regulated by government agencies. These regulations protect consumers from fraud, ensure the safety of deposits, and promote ethical banking practices.
Cons
• Fees: Banks often charge fees for their services, including fees for account maintenance, overdrafts, and wire transfers.
• Low interest rates: Many banks offer relatively low interest rates on savings accounts and other deposit accounts. These rates often fail to keep pace with inflation, which can diminish the purchasing power of your savings over time.
• Complex fee structures: The complexity of bank fees can create confusion for customers and result in unexpected expenses.
• Potential for poor customer service: Large banks may offer impersonal or poor customer service due to their size and scale.
Banks vs Credit Unions
While banks and credit unions offer similar financial services, there are key differences between them. Here’s a closer look:
Ownership
Banks,typically, are owned by shareholders and operate for profit. Credit unions, by contrast, are owned by their members and operate on a not-for-profit basis. The main goal of a credit union is to benefit its members.
Fees and Interest Rates
Credit unions often offer lower fees and better interest rates on loans and savings accounts compared to traditional banks, as they are not driven by maximizing profits.
Membership
Banks are open to the general public. Credit unions require membership, which may be based on specific criteria such as employment, geographic location, or affiliation with a particular organization.
Customer Service
Credit unions tend to provide more personalized customer service due to their smaller size and member-focused approach. While small banks can also offer personalized customer service, larger banks may lack the personal touch.
Getting Started Banking With SoFi
A bank is an excellent resource to help manage your money. You can deposit funds for safekeeping, manage everyday spending, and invest for the future. Understanding the products, services, and perks offered by different banks can help you find the institution for your needs.
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FAQ
How do banks make money?
Banks primarily make money by lending out deposits at higher interest rates than they pay to depositors, earning the interest rate spread. They also earn money from the fees they charge for account maintenance, overdrafts, and transactions. Additionally, banks may invest in securities and earn returns.
Why do they call it a bank?
The term “bank” is thought to originate from the Italian word “banca,” which means bench or counter. In medieval times, moneylenders conducted their business on benches in marketplaces, and the term evolved to represent financial institutions.
What is a bank, simply put?
Simply put, a bank is a financial institution that accepts deposits and makes loans. Banks also play a key role in a nation’s economy, facilitating the management and movement of money for individuals, businesses, and governments.
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Renting a house is different from renting an apartment, and it’s important to be prepared. In this guide, we’ll cover 10 essential tips to help you navigate the process. Whether you’re looking to rent a house in Austin to settle down, a quiet one-bedroom house in Seattle, or a lease in Miami, these tips will help you find the right place and avoid common pitfalls.
How does renting a house work? 10 steps for success
When looking for a house to rent you may find the application process and search are a little similar to renting an apartment. To help you navigate the process smoothly, here are the key steps you should follow when renting a house.
1. Assess your needs
Before diving into the rental market, it’s crucial to understand your needs and preferences. Consider the size of the house that suits your lifestyle—do you need multiple bedrooms, or is a smaller space more practical for you? Think about the type of house that aligns with your daily routine. For example, if you work from home, a house with a dedicated office space or a quiet environment might be essential. Consider creating a list of all the amenities you’re looking for.
Location is another key factor. Do you want to be close to work, schools, or public transport? Perhaps a neighborhood with parks or a community appeals to you. Decide on your non-negotiables, like a backyard for your pets, a garage for your car, or a house that allows for modifications like gardening. Having a clear idea of what you need will help you narrow down your options and focus on houses that truly fit your lifestyle.
2. Set a budget
Once you know what you’re looking for, the next step is to set a realistic budget. Start by evaluating your financial situation to determine how much rent you can afford. A general rule of thumb is that your rent should not exceed 30% of your monthly income.
But don’t forget about other costs. Utilities, security deposits, renter’s insurance, and possible maintenance fees should all be factored into your budget. For instance, a house with central air conditioning may have higher utility costs, so it’s essential to consider these expenses upfront. Staying within your budget not only ensures financial stability but also allows you to enjoy your new home without the stress of overextending yourself.
3. Research the rental market
With your needs and budget in mind, it’s time to explore the rental market. Start by using online platforms like ApartmentGuide, Rent.com, Redfin, or work with a real estate agent to find available houses. It’s essential to understand the market trends in your desired area. For example, if you’re renting in a competitive neighborhood, you might need to act quickly when you find a house that meets your criteria.
4. Prepare necessary documentation
Before you can secure a rental house, you’ll need to gather essential documents. These typically include identification, proof of income (like pay stubs or tax returns), and references from previous landlords or employers.
A good credit score is often crucial, as it reflects your reliability as a tenant. If your credit score is less than stellar, consider offering a larger security deposit, looking for houses and apartments without a credit check, or providing a co-signer to strengthen your application. Organizing your rental application package in a professional and complete manner can make you stand out to landlords, especially in competitive markets. This preparation shows that you’re serious and ready to move forward, giving you an edge over other applicants.
5. Contact landlords or property managers
With your documentation ready, the next step is to reach out to landlords or property managers. Effective communication is key during this stage. Be polite, clear, and prompt in your emails or calls. Express your interest in the property and ask important questions about the lease terms, maintenance responsibilities, and any specific rules or regulations.
If you have pets, it’s crucial to confirm the landlord’s pet policy upfront to avoid any surprises later. Understanding the importance of clear communication from the start can help build a positive relationship with your potential landlord, which can be beneficial throughout your tenancy.
6. Tour houses
Touring the house in person (or virtually, if necessary) is a critical step in the rental process. While the house might look perfect online, seeing it in person allows you to assess its true condition. Look beyond aesthetics—check for signs of wear and tear, test appliances, and inspect safety features like smoke detectors and locks.
Create a checklist to evaluate the property, including plumbing, heating, and electrical systems. Ask questions during the tour, such as when the house was last renovated or how often maintenance is performed. Taking notes or photos during your visit can help you remember details when comparing different properties.
7. Apply to rent the house
Once you find a house you like, the next step is to submit your rental application. Ensure that your application is complete and includes all required documents, such as proof of income, references, and identification. A well-prepared application can make a strong impression on the landlord and increase your chances of securing the property. After submitting your application, be ready to respond quickly to any additional requests from the landlord or property manager to move the process forward smoothly.
8. Sign the lease agreement
Before signing the lease, take the time to thoroughly review the document. Ensure you understand all the clauses, terms and policies, including those about rent increases, renewal options, and procedures for early termination.
Keep a copy of the signed lease for your records. If you encounter any issues with the lease agreement, such as unexpected clauses or terms that were not discussed, address them before signing. Being diligent at this stage can prevent future misunderstandings and ensure a smooth rental experience.
9. Prepare for move-in day
Once the lease is signed, it’s time to prepare for move-in day. Coordinate with the landlord to confirm the move-in date and process. You’ll also need to set up essential services like utilities, internet, and possibly waste removal.
Conduct a final walkthrough of the house before moving in, documenting the property’s condition. Take photos or videos of any existing damage and note them in the move-in checklist. This documentation is vital to avoid disputes when it’s time to move out and can protect your security deposit.
10. Settle into your new home
After moving in, take steps to make the house feel like home. Personalize your space with decor that reflects your style, and take the time to explore the neighborhood and meet your neighbors.
Establishing a good relationship with your landlord from the beginning can be beneficial. For example, promptly reporting any maintenance issues helps ensure they’re addressed quickly, maintaining the property’s condition. Regular communication with your landlord about any concerns or changes can also lead to a positive rental experience, making your house truly feel like home.
Pros and cons of renting a house
Pros:
Customization and personalization: Renting a house often allows for more opportunities to customize your living space. Landlords may be more flexible with allowing tenants to paint walls, hang pictures, or even make minor improvements, giving you a chance to create a home that feels more personal and unique.
Outdoor living: Many houses come with outdoor spaces like gardens, patios, or backyards. These areas can be ideal for gardening, entertaining, or simply enjoying fresh air, offering a lifestyle that is typically not available with apartment living.
Pet-friendly options: Houses are often more accommodating for pets, especially larger breeds that might not be allowed in apartments. Having a yard can be particularly beneficial for pet owners, providing a safe space for pets to play and exercise.
Cons:
Isolation: While privacy is a benefit, living in a house can also lead to a sense of isolation, particularly if the home is in a suburban or rural area. Unlike apartments, where neighbors are close by, houses may not offer the same immediate sense of community.
Limited access to public transportation: Houses, especially those in suburban or rural areas, may be further from public transportation options. This can make commuting more difficult and may require a reliance on a personal vehicle, adding to transportation costs.
Longer commute times: If the house is located outside of the city center, you may face longer commute times to work, school, or social activities. This can impact your daily schedule and add stress to your routine.
Higher move-in costs: Renting a house often comes with higher upfront costs, including security deposits, potential maintenance fees, and possibly even first and last month’s rent. These expenses can add up quickly, making the initial move more costly compared to renting an apartment.
The key differences on renting a house vs. renting an apartment
Space and privacy: Houses usually offer more space and greater privacy, ideal for people who value solitude. Apartments are more compact, often with shared walls, which can limit privacy.
Maintenance responsibilities: Renting a house may involve handling more upkeep tasks like yard work and snow removal. In an apartment, maintenance is generally managed by property staff.
Amenities and facilities: Apartments often include shared amenities like gyms and pools, while houses might offer more personalized features, like a private yard, but lack communal facilities.
Cost and utility bills: Houses typically have higher rent and utility costs due to larger space and less energy efficiency. Apartments often include some utilities in the rent, making them potentially more cost-effective.
Lease flexibility: Apartments usually offer more flexible lease terms, such as short-term options. Houses often require longer commitments, which can provide more stability.
Neighborhood and community: Houses are often in quieter residential areas, while apartments are more likely found in urban settings, offering closer access to city amenities but with more noise and activity.
Storage: Houses typically provide more storage space, including closets, attics, basements, and garages. Apartments generally have limited storage, often requiring creative solutions or external storage units.
I started making extra money and side hustling around 15 years ago, and since then I have done over 20 different side hustles. I started so that I could stop living paycheck to paycheck, and so that I could pay off my student loans quickly (I ended up paying off $40,000 in student loans in…
I started making extra money and side hustling around 15 years ago, and since then I have done over 20 different side hustles.
I started so that I could stop living paycheck to paycheck, and so that I could pay off my student loans quickly (I ended up paying off $40,000 in student loans in just 7 months thanks to side hustling!).
Some were short-lived, while others turned into steady streams of income (and are even my full-time income today). Each side job taught me something valuable about money, time, and effort. I juggled everything from reselling clothes online to being a virtual assistant, mystery shopping, answering online surveys, having roommates, and more.
There isn’t one best way to make extra money; it depends on what you’re good at, what you like, how much time you have, and more.
If you want to start a side job, my experiences can help you decide. I’ll tell you what I learned from each one I tried, so you can see the pros and cons of each.
My Side Hustles Review
Below is my review of the different side hustles I have tried over the years. These are in no particular order.
1. Blogging
Blogging can be a great way to earn money while writing about topics you love. I’ve done it for years and have seen how it can grow from a hobby into a full-time job.
I enjoy blogging for many reasons such as:
It’s flexible – You can blog from anywhere, anytime.
It’s affordable to start – You just need a computer and internet.
It’s a great creative outlet – Share your thoughts and passions with the world. I enjoy blogging and running a website.
While there are a lot of great reasons to start a blog, there are some challenges such as it can be time-consuming and there is no guarantee that you will make money.
When I first started my blog, I was working over 40 hours a week on it and making nothing. It took me 6 months to make my first $100 from it, actually!
But, it was all worth it in the end.
Blogging used to be my side hustle and it is now my full-time job where I have earned over $5,000,000 over the years.
I would definitely say that blogging is my favorite side hustle.
For me, it was a great second job because I could work on my blog before my day job, during lunch, after work, and on weekends. You can make your own schedule, which is a big bonus!
You can learn more about how to begin in my free How To Start a Blog Course here.
2. Paid online surveys
Paid online surveys are a way to make some extra cash when you have spare time. With just a few clicks and some honest answers, you can see money rolling in.
Companies want to know what customers think about their products and services and that is why they pay for surveys. By sharing your opinions, you help them improve and develop better offerings. In turn, they pay you for your time and insights.
You usually can earn anywhere from $0.50 to $5 per survey, depending on the length and how hard the survey is. And, surveys can take anywhere from around 10 minutes to an hour, so they are not high paying.
I’ve taken a lot of surveys over the years, and what I like about them is that you can do them whenever you want – in the morning, during lunch, before bed – whenever it works for you. There’s no strict schedule, and they are really easy to do.
My tips for success:
Sign up for multiple sites: This increases your chances of getting more surveys and making more money.
Complete your profile: Some survey sites match you to surveys based on your profile.
Be honest: Giving truthful answers ensures you stay eligible for more surveys.
Payment methods are typically cash via PayPal, bank transfer, or free gift cards (such as to Amazon, Walmart, Starbucks, and more).
You won’t get rich from these surveys, but it’s a nice way to earn some side cash. I know that some people think that surveys are a waste of time – but I know several people (including myself) who liked doing them because they are so flexible. I think the right mindset to have is that they will definitely not make you rich, and some can take a long(er) time to earn $5.
The survey companies I recommend signing up for include:
American Consumer Opinion
Survey Junkie
Swagbucks
InboxDollars
Branded Surveys
Prime Opinion
Five Surveys
PrizeRebel
Pinecone Research
3. Focus groups and paid research studies
You can make money by participating in focus groups. Companies pay for your opinions to improve their products and services.
This is similar to paid online surveys, but paid research studies and focus groups typically pay more.
User Interviews is a popular site where you can find paid research studies and focus groups.
Big companies like Pinterest, Spotify, Macy’s, Home Depot, Trip Advisor, and Amazon use User Interviews to get feedback on their new products, apps, and websites.
You can make $50 to $100 per hour, or even more, just by sharing your thoughts and feedback.
I did a user interview myself and got paid $400 for just one hour of work. It was easy, and everything was done online through a video call where they asked for my opinion on a new feature for a website.
Please click here to learn more about User Interviews.
Also, if you’re interested in paid medical research studies, then that can be a high-paying option as well. When my husband was younger, he took part in a few medical research studies to help us make extra money. He usually got paid about $1,000 for a week’s worth of time.
4. Dividends
Okay, so this isn’t exactly a side hustle, but it is a way that you can make more money so I wanted to include it here, especially since it’s one of my favorite ways to increase my income.
Dividends are an awesome way to earn passive income. You don’t need to do much work, and the money comes in. Many companies pay dividends to their shareholders regularly.
Here are a few benefits of investing in dividend stocks:
Regular income: You can receive payments quarterly or even monthly.
Low effort: Once you buy the stock, you don’t have to do much else.
A dividend is a portion of a company’s profits given to its eligible shareholders. You can receive dividends in cash, stock, or even options to buy more stock.
If you own shares in a company that pays dividends, you’ll get a dividend for each share you own.
For example, if you have 10 shares in Company XYZ and they pay $5 in cash dividends each year, you’ll get $50 in dividends for the year. Dividends are usually paid out quarterly, which means 4 times a year. So, in the example, the $5 in yearly dividends would likely be paid as $1.25 per quarter for each share you own.
You can learn more at What Are Dividends & How Do They Work? A Beginner’s Guide.
5. Buy and sell flipping
Flipping items is a great side hustle, and this is when you buy items at a low price and sell them for more.
The benefits of buy and sell flipping include:
Flexibility: You can flip items in your free time.
Profitable: Potential to earn anywhere from $50 to $5000 a month.
Fun: The thrill of finding good deals and making a profit.
I have flipped many items for resale over the years, and I even had a small reselling business at one point. It’s a fun way to make extra money.
While flipping items by buying and selling them for profit can be exciting, it has some downsides. One big risk is that you might not always make a profit, especially if the market drops or you overestimate the item’s value. It can also take a lot of time to research products, find good deals, and manage your listings. There’s tough competition too, as many people are trying to flip items, which can lower prices.
You can learn more at How I Made $40,000 In One Year Flipping Items.
6. Sold clothing
Selling used clothing can be a great way to make extra money. You can find clothes to sell in many places: thrift stores, clearance aisles, garage sales, and even your own closet.
For me, I liked to sell clothing on eBay as well as in person to places like Plato’s Closet. There are many more options these days, such as Poshmark and Facebook Marketplace.
Selling used clothes as a side hustle has its ups and downs. On the plus side, it has low start-up costs because you can start with clothes you already own, and it’s eco-friendly, supporting sustainable fashion. You also get to work on your own schedule, and there’s a high demand for secondhand clothes, especially trendy or vintage items. But it can take a lot of time to sort, clean, photograph, and list the clothes. Plus, shipping costs can cut into your profits, especially for heavier items.
I’ve sold a lot of clothing over the years, both online and in person (I also used to work at a secondhand clothing store for many years). I even had a small clothing resale business at one point, so I have plenty of experience in selling used clothes!
You can learn more at 16 Best Places To Sell Clothes For Cash.
7. Social media management
Social media management is a great side hustle if you enjoy creating content and engaging with people online.
Social media managers handle businesses’ social media accounts like Facebook, Instagram, and Twitter. They create posts, reply to comments, and help grow their followers.
Some benefits include:
Flexible hours: Many times, you can work anytime, making it easy to fit around your main job. This is because you can schedule social media posts to go out at the exact time that you want.
You can be creative: You can express your creativity through different types of content.
Work from anywhere: All you need is a laptop and internet.
But, there are some cons too. This wasn’t my favorite side hustle, mainly because it was stressful at times. It is very time-consuming (creating good content and engaging with followers can take a lot of time), there is constant learning (social media trends change quickly, so you need to keep learning new skills), and some clients may have high expectations and tight deadlines.
If you like being creative and spending time online, social media management can be a fun and rewarding side hustle.
8. Virtual assistant
Being a virtual assistant is one of my favorite side hustles. It’s flexible, and you can work from anywhere. You handle tasks for other people or businesses, like managing emails, scheduling appointments, or doing research.
Why I like virtual assisting:
Flexible hours: You set your own schedule.
Work from home: No need to commute.
Variety of tasks: You can decide what virtual assistant tasks you want to provide.
Working as a virtual assistant is a great way to make extra money. It gives you flexibility, a variety of tasks, and you can get started with just a computer and an internet connection.
You can learn more at Best Ways To Find Virtual Assistant Jobs.
9. Freelance writer
As a freelance writer, you get to write for different clients and websites. You can work from home and set your own hours. This side hustle can be very flexible, especially if you enjoy writing.
I’ve been a freelance writer for many years, and I really enjoy it. I’ve written for lots of different websites and companies, and I’ve made good money doing it.
The positives of being a freelance writer include:
Flexible schedule: You can write during your free time.
You get to decide what you want to write about: You get to write about different topics.
Work from home: No need for a commute.
There are some cons, though, such as income can vary, with some months being busy while others are slower. Finding clients requires actively searching to keep work steady. Plus, meeting deadlines can also be stressful, adding pressure to the job.
Freelance writing is a great side hustle if you love to write and want to make extra money. It takes time to build a steady income, but it can be very rewarding.
You can learn more at 14 Places To Find Freelance Writing Jobs – (Start With No Experience!).
10. Receipt scanning apps
Using receipt scanning apps is an easy way to earn some extra money. You just take a picture of your receipts from shopping, and these apps give you points or cash back. Here are some of the best apps to try:
I’ve been using receipt-scanning apps for years, and I love how easy they are to use. You can earn points or cash without spending much time. Plus, since I already have the receipts, it’s great to make some extra money by doing almost nothing.
My favorite receipt-scanning apps are:
I like to use both Fetch Rewards and Ibotta on all of my receipts (yes, at the same time to stack rewards).
Receipt-scanning apps can be handy, but they do have some downsides. One of the main drawbacks is that the rewards are usually small, so it can take a while to earn a significant amount. You also have to remember to scan receipts regularly, which can be time-consuming and easy to forget.
For me, though, I like to use them on all of my receipts as it only takes a quick moment to do.
11. Mystery shopping
When I had student loans to pay off, I turned to mystery shopping to make extra money. It didn’t make me rich, but it helped increase my income and allowed me to enjoy some free meals and free stuff (like free makeup and household goods).
Mystery shopping involves acting like a regular customer and then reporting on your experience. You might review a restaurant, shop at a store, or even evaluate a phone call. Companies use your feedback to improve their service.
What I like about mystery shopping:
Extra cash (typically $10 to $15 per mystery shopping task)
Free items or meals (you’re usually given an amount to spend in the store or restaurant)
Flexible schedule
Mystery shopping helped me make around $100 to $200 a month.
Joining a reliable mystery shopping company is important, though, as there are a lot of scams. I used Bestmark and had a good experience with them.
Mystery shopping won’t replace a full-time job, but it’s a fun way to make some extra money.
You can learn more at How To Become A Mystery Shopper.
12. Babysitter
Being a babysitter is a flexible side hustle. You can choose your own hours and accept jobs that fit your schedule.
Parents often need help on weekends or evenings, which can be perfect if you are busy during the day.
What I liked about babysitting:
Good pay – around $15 to $25 per hour (depending on where you live)
Helps develop responsibility
Flexible hours
Of course, there are downsides to being a babysitter, such as it can be tiring watching kids for long periods, and sometimes this side job means that you’ll be working late nights or weekends.
I was a babysitter when I was younger and I really liked it. The kids I babysat were fun to be around!
13. Coaching
Coaching can be a great side hustle. You get to help people grow and achieve their goals. It also offers flexibility because you get to be your own boss and decide your work hours.
I used to offer blog coaching in the past, and I enjoyed helping people learn how to grow their blogs and make money blogging.
It was also really easy for me to do, as I have been blogging for many years and have learned a lot about what to do and what not to do.
If you have the expertise and enjoy motivating others to improve, then there is probably a topic that you can coach others on.
14. Course creator
Creating an online course can be a game changer for your income. I launched my first course, Making Sense of Affiliate Marketing, in July 2016. Within the first year, it brought in around $434,698. This wasn’t due to any fancy marketing techniques but mainly through word-of-mouth.
Even though the course was successful, it didn’t come easy. I was nervous about it, especially since it was my first. I had worries that no one would be interested. Plus, many people said that your first course usually isn’t great.
Yet, the desire to help others understand affiliate marketing kept me going. By sharing my knowledge, I aimed to help bloggers increase their income. Online courses are beneficial because they can include interactive materials, workbooks, and community support, which go beyond what an ebook offers.
Here are some success stories from my course:
One student increased their monthly income from $272 to $4,400.
A new blogger got their first affiliate sale just two days after taking the course.
Another went from earning $87 a month to over $1,700 the next month.
And I have helped countless bloggers earn well over $100,000 a year from their blog and turn it into a full-time income.
Creating a course is a lot of work, but it can also be very rewarding. It allows you to reach a wider audience and can become a substantial income stream. If you have knowledge to share, you may want to try creating your own online course.
This is a business idea that I recommend more people start! I enjoy taking courses from people and sign up for them all the time. I love learning, and so do others.
You can learn more at How I’ve Made Over $1,000,000 From My First Course Without a Big Launch.
15. Affiliate marketing
Affiliate marketing is one of the most popular side hustles. It’s easy to start and doesn’t need a lot of money up front.
You promote products and earn a commission for every sale made through your referral link. This can be done on social media, a blog, a YouTube channel, and more.
What I like about affiliate marketing:
Low start-up cost: You don’t need much money to start.
Flexible schedule: Work when you want.
Passive income: You can earn money even when you’re not working.
Affiliate marketing can be a fun and profitable side hustle. Just remember to stay patient and persistent!
You can learn more at What You Need To Know About Affiliate Marketing For Beginners.
16. Rent out a room in your home
Renting out a room in your house can be a simple way to make extra money. If you have unused space, like a spare bedroom or basement, you can turn it into a rental.
I have had several roommates in the past, and I liked this side hustle a lot.
What I liked about making extra money by renting out a spare room:
Extra income to help pay the mortgage
If you have unused space, then this can be a good way to fill it
Of course, there are challenges to having a roommate, and it isn’t always perfect. Sometimes, it can be hard to share common spaces (like the kitchen and bathroom), and it can also take time to adjust to someone else’s lifestyle.
Renting out a room isn’t for everyone, but it can provide steady income with minimal effort.
17. Shop at cash back websites
Shopping at cash back websites is an easy way to earn extra money. These sites give you a percentage of your purchase back as cash. You just have to sign up, shop through their site, app, or browser extension, and earn rewards.
I like cash back sites because they are easy to use and you don’t have to pay anything extra for using them.
Shopping through cash back sites can give you a nice little bonus on things you already planned to buy. It’s like getting paid to shop.
My favorite cash back sites are:
Rakuten (for online shopping like clothing, home goods, etc.)
Upside (for gas)
Honey (for online shopping like clothing, home goods, etc.)
Fetch Rewards (for groceries)
18. Earn credit card rewards
Using credit cards (the smart way) can help you earn rewards like cash, travel points, and more.
I’ve been using rewards credit cards for years, and now they’re the only cards I use. They help me save money on travel, earn cash back, and more.
By choosing the right credit card and using it wisely, you can enjoy great rewards and make the most of your spending.
Remember, carrying a balance on your credit card can lead to interest charges, which can outweigh the benefits of rewards. Always try to pay off your full balance each month to avoid these fees.
You can see my favorite credit card rewards at Best Rewards Credit Cards For This Year | What You Need To Know.
19. Brand ambassador
Being a brand ambassador is one of the more popular side hustles.
You represent a company and help promote its products. Often, you act as a public spokesperson. You can find opportunities on Facebook and many cities have brand ambassador groups where gigs are posted.
Brand ambassadors can earn between $15 to $20 per hour. Some high-end gigs can pay up to $100 per hour.
Benefits of this side hustle include flexible hours and the chance to work for brands you like. You may be able to get free products or swag, too, and this is one thing I really liked about being a brand ambassador in the past.
20. Newspaper delivery
Delivering newspapers can be an easy way to make money. It’s a job you can do before school or work, and it lets you get exercise too. You may drive, ride your bike, or walk to each house and leave the newspaper by the door.
The benefits of newspaper delivery include:
Exercise: If you walk or ride your bike, you can get plenty of fresh air and exercise.
Scheduling: Most routes are in the early morning, so you still have the rest of the day free.
Tips: Some customers might give you tips during holidays or for good service.
But, there are some downsides, with the main one being that you typically have to wake up really early for this job. For newspaper delivery, you usually have to wake up very early in the morning, often around 3:00 to 5:00 AM. The exact time depends on how big your delivery route is and what the newspaper company requires. The goal is to have all the newspapers delivered by the time most people wake up, usually around 6:00 or 7:00 AM, so starting early is really important.
The other main negative is that a big collection of newspapers is, of course, heavy!
When I was younger, I helped a friend’s family with their newspaper run whenever I slept over at their house. They used their van to deliver a bunch of newspapers, and I got to tag along.
21. Help others with their resume
Helping others with their resume can be a rewarding side hustle. You can earn extra money while also making a big difference in someone’s job hunt.
When I was in my last year of college as well as about a year after I graduated, I helped several people with their resumes. I didn’t charge a lot (and many times worked for free or for a free meal), but I liked looking at resumes and finding ways to make everything sound better.
I was also really good at it and it came so easy to me!
Some benefits of this side hustle include:
Flexibility: You can do this from home.
High demand: Many people need help with their resumes.
Work at your own pace: There’s no rush, and you can take on as many clients as you want.
By helping others with their resumes, you can earn money and provide help. It’s a great way to use your skills and make a difference in someone’s life.
22. Enter contests and giveaways
Entering contests and giveaways can be a fun and rewarding side hustle. You will definitely not win every time, but the more you enter, the higher your chances. People have won cash, gift cards, vacations, and electronics through these events.
You can spend a little time each week entering different contests. You can find them online, on social media, and in emails from brands you follow. Some people set aside about an hour each week to enter as many as they can find.
I found success this way. For example, I once won $10,000 from a financial blog’s anniversary contest, and this was a major win early on in my side hustle journey.
Remember, entering contests should be fun. Think of it as a hobby that could pay off with some great surprises. You most likely won’t get rich nor win the lottery doing this.
23. Rewards sites (GPT sites)
Rewards sites, also known as GPT (Get-Paid-To) sites, are platforms where you can earn money by doing simple tasks online.
Tasks you might do include:
Taking surveys
Reading emails
Playing games
Shopping online
Trying new apps and services
Clicking ads
Rewards sites have been around for a while and have proven to be a reliable way to earn some extra cash. Though the payouts are often small, they can add up over time. For instance, Swagbucks has paid out over $80 million to its users.
Using multiple sites can help maximize your earnings. It’s easy to do tasks during your free time, making it a flexible way to earn money without a huge time commitment.
It’s key to choose reputable sites to make sure that you get paid for your efforts, so I recommend that you stick with popular, well-reviewed platforms to avoid scams.
Rewards sites will most likely not replace a full-time income, but they can be a fun way to get some extra spending money.
Here’s a quick list of the best GPT sites:
24. Test websites (User Testing)
Testing websites, also known as user testing, is a popular side hustle. You get paid to visit a website or app and give feedback on your experience.
You will need a computer, a reliable internet connection, and sometimes a microphone.
User testing is flexible. You can do it in your free time from the comfort of your home. This side hustle is great if you like trying new things and providing feedback.
I have personally been paid to do user testing in the past, as well as paid others to do user testing on this very website, Making Sense of Cents. I thought it was an easy side hustle where you just share what you honestly think of a website.
25. College textbook resale
Selling your college textbooks is a great way to make some extra money.
When I was in college, I sold all of my college textbooks once I was done, and I always tried to make the most money (so, that typically meant that I never sold it directly back to my college bookstore, because they usually paid the least amount).
Reselling college textbooks as a side hustle has its ups and downs.
On the plus side, there’s a high demand for cheaper, used textbooks, so you can make good money if you buy low and sell high. It’s easy to start, especially if you begin with your own used books, and it’s a great way to encourage reusing materials.
But the market is seasonal, with most demand at the start of each semester, so your income might be inconsistent. New editions can come out, making older books less valuable, and storing a lot of books can be tough. Plus, shipping heavy textbooks can cut into your profits if you’re not careful.
Recommended reading: 17 Best Places To Sell Used Books For Cash
Frequently Asked Questions
Below are answers to common questions about finding the best side hustle.
What are the top side hustles that can bring in good money?
Top side hustles that can bring in good money include freelancing, blogging, flipping items for resale, and renting out rooms in your home.
How can I find side hustles that pay me every week?
You can find weekly pay side hustles through gig economy platforms like Uber, Lyft, and DoorDash. Freelancing on websites like Upwork or Fiverr might also pay weekly, depending on your agreement with clients. Another option is finding part-time jobs at local businesses that pay weekly wages.
Can you suggest some side hustle ideas I can do from my house?
There are several home-based side hustles. You can start freelancing in areas like writing, graphic design, or social media management. Another idea is to sell virtual assistant services. Teaching online courses or tutoring students in subjects you excel at is also a great way to earn from home.
What side jobs are out there for someone with no experience?
There are many side jobs for beginners. You can try pet sitting or dog walking through apps like Rover. Babysitting is another option if you like spending time with children. Delivery driving for companies like Uber Eats or Instacart doesn’t require much experience and can be started quickly too.
My Favorite Side Hustles – Summary
Now that we have gone over my full list, I want to talk about one of the main deciding factors of a side hustle.
Your time is important. Some side jobs take a lot of time but don’t pay well, while others pay more with less time.
Think about how much free time you have after your main job and how much money you want to make. This balance is very important. Track the hours you work and the money you earn to see if it’s worth it. The best side job fits into your life without stressing you out.
Also, another important deciding factor is choosing a side hustle that aligns with your skills and lifestyle. If you’re good at something, you’re likely to enjoy it more and perform better.
So, I recommend thinking about your current skills and hobbies. Matching your side hustle to your skills makes it easier and more enjoyable. Plus, you’re more likely to find success and earn extra income.
Homebuyers have a variety of financing options to consider. If you’re a current homeowner, a bridge loan and a home equity line of credit (HELOC) are two possible choices that let you use the equity in your home to finance your next home purchase.
But there are key distinctions in how these funds can be used, as well as pros and cons for each. Let’s take a closer look at how bridge loans and HELOCs compare.
What Is a Bridge Loan?
Bridge loans, sometimes referred to as swing loans, interim financing, or gap financing, are a short-term, lump-sum financing option that’s typically used to purchase a new home before the sale of an existing property.
If you’re figuring out how to buy and sell a house at the same time, coming up with a down payment on the new house when you haven’t yet received payment for your current house can be challenging. This is when a bridge loan could come in handy — by filling the gap in funding so you can secure your new home without having to make a sale-contingent offer or feel pressured to accept a low bid on your current home.
Borrowers typically approach bridge loans in one of two ways: A common scenario involves using a bridge loan to cover just the down payment and closing costs on a new home. Alternatively, borrowers can apply for a larger bridge loan — potentially up to 80 percent of the value of both properties. With this second approach, borrowers pay off the entire mortgage on their current home and apply the remaining funds toward closing on their new home.
When comparing a bridge loan vs. a HELOC, note that both financing options are often secured using an existing home as collateral. An important difference is that bridge loans aren’t meant to be used for long-term financing, as they come with relatively higher interest rates and loan terms between six months and a couple years.
What Is a Home Equity Line of Credit?
A home equity line of credit, or HELOC, is a type of financing that leverages home equity to fund a variety of expenses. Borrowers can typically take out between 75% to 85% of their home equity — the value of their home minus the mortgage balance — with a HELOC.
A HELOC works much like a credit card, providing a revolving line of credit that can be drawn upon as needed. However, a HELOC offers lower interest rates than a credit card since it’s secured by an existing property.
When you consider a HELOC, there are two phases to keep in mind: the draw period and the repayment period. During the draw period, which often spans 10 years, borrowers can access available funds as needed while only having to pay interest on the amount that’s withdrawn.
Once the draw period ends, funds can no longer be withdrawn and the repayment period kicks in. Borrowers will need to make regular payments on the principal, plus interest, until the balance is paid off. On a HELOC with a 10-year draw period, borrowers can expect to have a 20-year repayment period. This extended repayment time frame is a notable distinction between a bridge loan vs. a HELOC.
You may have heard about a home equity loan, which also uses your home as collateral. When comparing a HELOC vs. a home equity loan, some key differences are that with the latter, funds are disbursed immediately as a lump sum and repayment begins right away. If you’re weighing a bridge loan vs. home equity loan, note that home equity loans usually have fixed interest rates and terms ranging from five to 30 years.
Recommended: Home Loan Help Center
Pros and Cons of Each Financing Option
Both bridge loans and HELOCs can provide quick and flexible financing. But each comes with its advantages and drawbacks.
Pros
Here’s a look at the benefits for each financing option.
Bridge Loan:
• Quick access to funds for time-sensitive transactions
• Avoids the need to make a sale-contingent offer on a new home
• Could help buyers put 20% down and avoid private mortgage insurance
• Faster processing than conventional mortgages
• Often begin with more affordable, interest-only payments
HELOC:
• Flexibility to draw on credit line whenever you need it
• Lower interest rates than bridge loans
• Interest is only charged on the funds you withdraw
• Longer repayment period than bridge loans
• Interest can be claimed as an itemized tax deduction if used for home improvements. (This tax benefit is slated to expire after 2025.)
Cons
Here are some potential disadvantages to consider when comparing a bridge loan vs. a home equity line of credit.
Bridge Loan:
• Higher interest rate than other second mortgage options
• Shorter repayment period than a HELOC
• Often requires borrowers to also use the lender for their new home mortgage
• Puts home at risk of foreclosure for missed payments
• Limited borrower protections if sale of old home falls through
HELOC:
• Typically have variable interest rates that are subject to change over the repayment period
• Risk of running up balance quickly
• Potential for large jump in payment amount when moving from the draw to the repayment period
• Uses a home as collateral like a bridge loan
• May include prepayment penalties for paying off the balance early
Is a Bridge Loan or HELOC Better for You?
It’s important to consider what you’ll be using financing for and your ability to repay the money you borrow when deciding whether a HELOC vs. bridge loan is a better bet. Situations that require funds over a longer period of time, or at different times, could be a good fit for a HELOC. Home renovations are a popular use for HELOCs, since the costs and timeline may be subject to change as the project unfolds. Funds from a HELOC may be used for other expenses like medical bills, tuition, or making a down payment if the line of credit provides sufficient funds. Note that these expenses are not eligible for a tax deduction.
A bridge loan, by comparison, is ideal for borrowers looking to buy and sell a home at the same time. Since bridge loans often start with interest-only payments, they can be an affordable option if borrowers can sell their old home soon after buying a new one. If there’s a good chance that the original residence won’t be sold for an extended period, it might be more cost-efficient to go with a home equity line of credit vs. a bridge loan.
Standard Qualifications and Requirements
Before you consider borrowing against your home equity and putting your property on the line, look closely at the qualifications and requirements. Both bridge loans and HELOCs require that borrowers have at least 20% equity in their home. Lenders factor in your creditworthiness for either loan, too. For a bridge loan, borrowers typically need a minimum credit score of 700, though some lenders may allow borrowers with lower scores. While it’s possible to qualify for a HELOC with a credit score of 620, this comes at a higher interest rate.
Requirements on how the funds are spent differs between the financing types. A HELOC offers greater flexibility in how the funds are spent, whereas bridge loans may be limited to the purchase of a new home while selling an existing property.
Application Process
Early on in the home-buying process, you’ll want to look into applying for financing. For either a bridge loan or a HELOC, you’ll need to provide documentation of homeownership, proof of income, mortgage statements showing you’ve been making on-time payments, and information on any existing debts. With either form of financing, lenders may require a home appraisal to determine the property’s market value, which is the basis for the loan or line of credit amount.
The application and underwriting processes for a bridge loan and HELOC are usually quicker than conventional mortgages, making them an ideal choice if a homebuyer needs to act fast.
Recommended: Mortgage Prequalification vs. Preapproval
The Takeaway
Both a bridge loan and a HELOC can provide quick access to financing to buy a home. There are pros and cons to each financing type, so it’s important to determine which works best for your financial situation. Remember that both financing options use your current home as collateral, meaning that lenders can foreclose on your house if you fall behind on payments.
SoFi now offers flexible HELOCs. Our HELOC options allow you to access up to 95% of your home’s value, or $500,000, at competitively low rates. And the application process is quick and convenient.
Unlock your home’s value with a home equity line of credit brokered by SoFi.
FAQ
Can you pay off bridge loans and HELOCs early?
Yes, both types of financing can be paid off early. Note that some lenders may charge prepayment fees if you pay off a HELOC within the first few years of the repayment period.
What is the average interest rate on a bridge loan?
The interest rates on bridge loans are generally 2% higher than prime mortgage rates.
What happens if you take out a HELOC, but don’t use it?
You may have to pay an inactivity fee if you open a HELOC and don’t use it. Minimal withdrawal requirements are typically outlined in your HELOC contract.
Photo credit: iStock/MicroStockHub
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
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.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
²To obtain a home equity loan, SoFi Bank (NMLS #696891) may assist you obtaining a loan from Spring EQ (NMLS #1464945).
All loan terms, fees, and rates may vary based upon individual financial and personal circumstances and state.
You may discuss with your loan officer whether a SoFi Mortgage or a home equity loan from Spring EQ is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit brokered through SoFi. Terms and conditions will apply. Before you apply for a SoFi Mortgage, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and loan amount. Minimum loan amount is $75,000. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria.
SoFi Mortgages originated through SoFi Bank, N.A., NMLS #696891 (Member FDIC), (www.nmlsconsumeraccess.org). Equal Housing Lender. SoFi Bank, N.A. is currently NOT able to accept applications for refinance loans in NY.
In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
Sacramento often flies under the radar compared to its flashier neighbors, but those who live here know it’s a gem worth discovering. Known for its abundant sunshine, farm-to-fork dining, and rich tree canopy, Sacramento offers a unique blend of urban amenities and natural beauty. As a city that has grown rapidly in recent years, it attracts new residents with its relatively affordable cost of living, thriving job market, and laid-back vibe. Not sure if Sactown is for you? Read on to find out what to expect if you’re considering a move to the Sacramento area in 2024.
You know it from: Lady Bird, Sacramento, Step Brothers
Average 1 bedroom rent: $2,022 | Sacramento apartments for rent, Sacramento houses for rent
Average home price: $520,000 | Sacramento homes for sale
Average cost of full-service moving services: $182/hr for 2 movers
Average cost to rent a moving truck: $19 – $39/day
Top industries: Agriculture, Health Care, Education
Move here for: Farmer’s markets and fresh food, tree-lined streets, great biking and outdoor opportunities
Be sure to bring: Your bike and your sunscreen
1. Sacramento’s weather is perfect for sun lovers
Sacramento enjoys over 260 days of sunshine each year, making it a haven for anyone who craves warmth. Summers can get scorching, with temperatures often exceeding 90°F, but the low humidity makes it bearable. Winters are mild, with occasional rain but rarely dipping below freezing. If you love basking in the sun or enjoy outdoor activities year-round, Sacramento’s climate won’t disappoint. Just be prepared with sunscreen and stay hydrated during those hot summer days.
2. The farm-to-fork capital lives up to its name
Sacramento takes pride in being the “Farm-to-Fork Capital” of the U.S., and it’s not just a catchy slogan. With its proximity to fertile farmland, the city boasts an impressive array of fresh, local produce. Farmers markets abound, and restaurants highlight seasonal ingredients, making it a food lover’s paradise. Dining out in Sacramento means enjoying meals that are fresh, flavorful, and locally sourced. Whether it’s a casual café in Midtown or a high-end restaurant Downtown, you’ll taste the difference.
3. The cost of living is rising but still reasonable
Compared to other California cities like San Francisco or Los Angeles, Sacramento’s cost of living remains relatively affordable, but that gap is closing. Housing prices have been climbing steadily, with the average home costing around $520,000. Renters will find that decent apartments are still available, but they go fast. While Sacramento’s cost of living is 20% higher than the national average, it’s still more manageable than in other major California cities.
Moving Tip: Be prepared to act quickly if you find a house or apartment you like. Competition is fierce, whether you’re looking to rent or buy a home. The average single family home only stays on the market for 11 days. If you are looking for buy, working with a local real estate agent can help ensure you find the perfect home.
4. Traffic can be a frustrating reality
Sacramento’s traffic isn’t as notorious as L.A.’s, but it can still be a headache. I-5 and Highway 50 see regular congestion, especially during rush hour. The city’s rapid growth has outpaced its infrastructure, leading to bottlenecks and delays. On the bright side, Sacramento is investing in its public transportation system, which could ease some of the traffic woes in the future.
Moving Tip: If you’re commuting from suburbs like Elk Grove or Roseville, expect to spend a fair amount of time in your car. If you’re hoping to rely on pubic transit, you’ll want to live closer to the city center.
5. Sacramento is a cyclist’s dream
With its flat terrain and bike-friendly streets, Sacramento is a cyclist’s paradise. The American River Parkway offers 32 miles of scenic bike trails, perfect for weekend rides. Midtown and Downtown are particularly bike-friendly, with ample bike lanes and easy access to local shops and restaurants. If you’re looking to ditch your car, Sacramento makes it easy to get around on two wheels.
Moving Tip: Sacramento’s commitment to cycling extends to its community, with frequent bike events and a growing network of cycling clubs.
6. The local craft beer scene is thriving
Beer enthusiasts will feel right at home in Sacramento, which boasts a vibrant craft beer scene. With over 50 breweries in the region, there’s always something new to try. Midtown, in particular, is a hotspot for craft beer, with popular spots like Device Brewing and Urban Roots offering diverse selections. Sacramento’s beer culture is laid-back and welcoming, making it easy to strike up a conversation with fellow beer lovers. Whether you’re into IPAs, stouts, or sours, you’ll find plenty to satisfy your palate.
7. The tree canopy is something to behold
Sacramento is often called the “City of Trees,” and for good reason. The city’s tree canopy is one of the densest in the nation, with over 100,000 trees lining its streets. Walking through neighborhoods like Land Park or East Sacramento, you’ll be greeted by towering oaks, elms, and sycamores that provide shade and beauty. The trees not only enhance the city’s aesthetics but also help keep temperatures cooler during the hot summer months. If you appreciate nature, Sacramento’s lush greenery will be a daily delight.
8. The job market is growing but competitive
Sacramento’s job market has been expanding, particularly in government, healthcare, and tech sectors. Major employers include the State of California, Sutter Health, and Intel, offering a variety of career opportunities. However, the job market can be competitive, especially for those seeking positions in specialized fields. Networking is key, and connecting with local professionals through events or LinkedIn can make a difference. If you’re relocating for work, it’s wise to have a job lined up or at least a solid plan for your job search.
9. Public transit is improving but still lags
While Sacramento’s public transportation is better than it used to be, it still has room for improvement. The Sacramento Regional Transit (SacRT) system offers light rail and bus services, but coverage can be spotty outside of the city center. If you live in Downtown or Midtown, you can get by without a car, but suburban areas might find it less convenient. On the plus side, SacRT has been expanding its services and improving reliability, making it a viable option for some commuters.
10. Sacramento’s art scene is flourishing
Sacramento’s art scene is experiencing a renaissance, with murals, galleries, and performance spaces popping up across the city. The Wide Open Walls mural festival has transformed the city into an open-air gallery, with stunning street art around every corner. Midtown and Downtown are hubs for creativity, featuring galleries and institutions like the Crocker Art Museum and monthly art walks. Whether you’re into traditional art, modern installations, or street performances, Sacramento offers a thriving cultural experience that’s worth exploring.
11. The proximity to nature is unbeatable
Living in Sacramento means being just a short drive away from some of California’s most stunning natural landscapes. Lake Tahoe, Yosemite National Park, and the Napa Valley are all within a few hours’ reach. Whether you’re into skiing, hiking, or wine tasting, weekend getaways are a breeze. Even within the city, parks like William Land Park and the Sacramento River provide plenty of opportunities for outdoor activities. If you love nature and adventure, Sacramento’s location is a major perk.
12. Sacramento’s food scene is diverse and delicious
Sacramento’s culinary landscape is as diverse as its population, offering everything from authentic Mexican tacos in South Sacramento to upscale dining in Midtown. The city’s food scene reflects its agricultural roots, with farm-to-table dining being the norm rather than the exception. Food trucks are also a big deal, especially at events like SactoMoFo, where you can sample a variety of cuisines in one place. Whether you’re a foodie or just love a good meal, Sacramento’s dining options won’t disappoint.
13. Sports fans have plenty to cheer about
Sacramento might not have as many professional sports teams as larger cities, but it’s home to some passionate fans. The Sacramento Kings have a loyal following, and game nights at the Golden 1 Center are electric. Soccer enthusiasts can catch Sacramento Republic FC in action, with plans for the team to join Major League Soccer in the works. If you’re a sports fan, Sacramento offers plenty of opportunities to get in on the action.
Moving Tip: Local sports bars like The Zebra Club are always buzzing with excitement, whether it’s for NBA, NFL, or college games.
Methodology: Average rent prices sourced from Rent.com August 2024. Home prices sourced from Redfin August 2024. Average moving costs sourced from MoveBuddha. Employment data sourced from Executech.
Newark, often referred to as the “Gateway City,” is a place of rich history and cultural diversity. With its historic neighborhoods, vibrant arts scene, and close proximity to New York City, it’s no wonder that many people dream of calling Newark their home. However, life in this dynamic city comes with its own set of challenges. So whether you’re searching for a modern apartment in the Ironbound District or a historic brownstone apartment in Forest Hill, you’ve come to the right place.
In this ApartmentGuide article, we’ll explore the various pros and cons of living in Newark, helping you decide if this vibrant urban center is the right place for you.
Fast facts about living in Newark
What is Newark known for: Gateway to New York City, diverse cultural heritage, and major transportation hub
Fun fact: Newark Liberty International Airport was one of the first major airports in the United States, opening in 1928
Population: Over 310,000 residents in Newark proper; over 19 million in the NYC metro area
Average rent: $2,425 per month for a one-bedroom apartment
Median home sale price: $1,400,000
Days of sunshine: Approximately 220 days per year
Public parks: More than 70 parks within the city
Average summer high temperature: 86°F (30°C)
Major industries: Transportation, healthcare, education, and finance
1. Pro: Proximity to New York City
One of Newark’s biggest advantages is its proximity to New York City. Just a short train ride away, Newark offers easy access to all that NYC has to offer, from job opportunities to cultural attractions, without the sky-high living costs. Whether you work in the city or simply enjoy visiting, Newark provides a more affordable base while keeping you close to the action.
2. Con: High cost of living relative to other NJ cities
While Newark is more affordable than New York City, it still has a relatively high cost of living compared to other cities in New Jersey. Overall, the cost of living in Newark is about 16% more expensive than the national average. Housing costs are a significant factor, being 41% higher than the national average, with the median sale price for a home in Newark around $1,400,000 and average rent for a one-bedroom apartment in Newark at $2,425 per month.
Additionally, utilities are 9% more expensive, groceries are 3% more, and transportation costs are 9% higher than the national average. On a positive note, healthcare costs are slightly lower, at 1% less than the national average. However, lifestyle expenses, including dining out and entertainment, are about 7% more expensive, making it essential to consider your budget carefully when moving to Newark.
3. Pro: Rich cultural and historical heritage
Newark is a city with a rich history, dating back to its founding in 1666. This history is reflected in its architecture, museums, and cultural institutions. The city is home to the Newark Museum of Art, the New Jersey Performing Arts Center (NJPAC), and the historic Ironbound District, known for its Portuguese and Brazilian communities. These cultural assets contribute to a vibrant and diverse atmosphere, offering residents plenty of opportunities to explore and enjoy.
4. Con: Traffic congestion and limited parking
As a major transportation hub, Newark experiences significant traffic congestion, especially during rush hours. The city’s layout and infrastructure can make parking a challenge, particularly in densely populated neighborhoods. Many residents rely on public transportation to avoid the hassle of driving, but for those who need to use a car, traffic and parking can be a daily headache.
5. Pro: Strong transportation links
Newark is a transportation hub with excellent links to New York City, the surrounding region, and beyond. Newark Penn Station is a major train station served by Amtrak, NJ Transit, and PATH trains, making commuting to NYC and other cities straightforward. Additionally, Newark Liberty International Airport is one of the busiest airports in the country, offering direct flights to destinations around the world. For residents, the city’s strong walk and transit scores indicate that many Newark neighborhoods are accessible without a car, making it easier to navigate daily life. However, the bike score suggests that while biking is possible, the city’s infrastructure is more car-oriented.
Newark’s transportation scores
Walk score: 76
Transit score: 65
Bike score: 51
6. Con: Economic diversity with areas of growth
Newark, like many urban areas, has a mix of economic conditions, with some neighborhoods experiencing rapid growth and revitalization, particularly in downtown and the Ironbound District. While these areas are thriving, offering new opportunities and developments, other neighborhoods are still in transition, working to overcome challenges related to income and employment. This economic diversity reflects the city’s ongoing efforts to improve quality of life and expand access to resources across all communities.
7. Pro: Diverse dining and food scene
Newark offers a vibrant and diverse food scene, heavily influenced by its multicultural population. The Ironbound District is particularly well-known for its Portuguese and Brazilian restaurants, offering everything from casual dining to gourmet experiences. The city’s diverse communities also mean that residents can enjoy a wide range of cuisines, from Caribbean to Italian to African.
Popular restaurants in Newark
Forno’s of Spain
Casa Vasca
Adega Grill
Fornos Portuguese BBQ
Tops Diner
Seabra’s Marisqueira
Mercado Tomato Pie
8. Con: Limited shopping options
While Newark has a variety of local shops, markets, and boutiques, it lacks the extensive shopping districts and large malls found in some other cities. For those who enjoy shopping at high-end stores or large retail centers, options within the city may be somewhat limited. Residents often travel to nearby cities like Jersey City, Hoboken, or even New York City for a more diverse shopping experience. This can be inconvenient for those who prefer to do their shopping closer to home.
9. Pro: Educational institutions
Newark is home to several respected educational institutions, including Rutgers University-Newark, the New Jersey Institute of Technology (NJIT), and Seton Hall University’s Law School. These institutions not only provide education but also contribute to the local economy and culture. Additionally, Newark Public Schools, while facing challenges, offer a range of specialized programs and magnet schools that provide educational opportunities for local students.
10. Con: Aging infrastructure
Like many older cities, Newark has aging infrastructure that can lead to issues with public services, transportation, and utilities. While there are ongoing efforts to modernize and improve the city’s infrastructure, residents may still encounter challenges related to outdated facilities and services, particularly in older neighborhoods.
11. Pro: Access to outdoor recreation
Despite being an urban center, Newark offers access to a variety of outdoor spaces and activities. Branch Brook Park, known for its stunning cherry blossoms in the spring, is one of the largest parks in the city and a popular spot for jogging, picnicking, and enjoying nature. Additionally, Weequahic Park offers a golf course, sports fields, and walking trails, providing residents with plenty of options for outdoor recreation.
Other outdoor activities in Newark
Riverfront Park: Offers scenic views of the Passaic River, walking paths, and spaces for community events.
Lincoln Park: A historic park that hosts concerts, festivals, and community gatherings throughout the year.
Military Park: A revitalized downtown green space featuring gardens, a reflecting pool, and cultural events.
Newark Bay: Ideal for boating, fishing, and enjoying waterfront views.
Essex County Turtle Back Zoo: Located nearby, this popular destination offers animal exhibits, a treetop adventure course, and a mini-golf course.
South Mountain Reservation: A short drive away, this expansive nature reserve offers hiking trails, a scenic overlook, and a reservoir for kayaking and fishing.
12. Con: Limited nightlife options
While Newark has a growing arts and cultural scene, its nightlife options are somewhat limited compared to nearby New York City or even other cities in New Jersey. There are bars, lounges, and music venues, but the city’s nightlife is generally more low-key. For those seeking a vibrant and diverse nightlife, the proximity to NYC offers an easy escape, but Newark itself may not satisfy those looking for more variety.
13. Pro: Strong community ties
Newark is a city with strong community ties and a deep sense of pride among its residents. Neighborhoods often have close-knit communities where people know their neighbors and support local businesses. This sense of community is particularly strong in areas like the Ironbound, where generations of individuals have lived and worked, contributing to a rich cultural and social fabric.
14. Pro: Growing job market in key sectors
While Newark has faced economic challenges, there is growth in key sectors such as transportation, healthcare, and education. The presence of major institutions like Prudential Financial and Audible, as well as the growing influence of tech startups, is helping to revitalize the local economy. Newark’s strategic location also makes it an attractive place for businesses looking to access the New York City market without the associated costs.
Top employers in Newark
Port Authority of New York and New Jersey
University Hospital
Rutgers University-Newark
New Jersey Institute of Technology (NJIT)
PNC Bank
Horizon Blue Cross Blue Shield of New Jersey
Pros & cons of living in Newark (summary)
Pro: Proximity to New York City
Con: High cost of living relative to other NJ cities
Whether you’re getting your ducks in a row to buy a house, trying to secure a lower interest rate on a future auto loan, or simply monitoring your credit as a personal finance best practice (good on you!), even a small dip in your credit score can make your stomach drop.
The good news: In the big scheme of things, a credit score drop of 10 points isn’t a huge deal — or at least it doesn’t have to be. While it’s smart to keep an eye on what’s going on, a 10-point drop could be due to a new credit application or an increase in your credit utilization, both of which are often temporary and easily made up for with positive credit behavior over time.
Below, we’ll look into some of the most common reasons your credit score may have taken a quick dip.
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Why Did Your Credit Score Drop 10 Points?
Credit scores usually run from 300 to 850, so 10 points really isn’t that significant of a drop. Of course, if you happen to be just a few points shy of having “good” or “exceptional” credit, that drop could feel like a more substantial loss. Fortunately, these fluctuations are normal and usually easily made up for with on-time payments, which have the largest effect on your credit score.
Some common reasons for a 10-point credit score drop include:
Hard Credit Inquiries
If you’ve recently applied for a new loan or line of credit, the credit check the lender makes to assess your creditworthiness can affect your score. This category, known as “new credit,” accounts for 10% of your FICO score. The effect can be compounded if you apply for many new loans or lines of credit in a short amount of time.
Balance Increases
Fully 30% of your FICO score is based on the total amount you owe versus the amount of credit you have available. So if you recently made a larger purchase on credit or took out a new personal loan, you could see a ding to your score.
Account Closures
While paying off a credit card or loan could help increase your score (by lowering your total balance), closing an account can affect the age of your overall credit history. This accounts for 15% of your FICO score. In the case of a credit card closure, it could also lower your total available credit, which could actually increase your credit utilization ratio even as your total balance decreases. So if you’ve recently closed an account, again, you may see your score take a small dive.
Errors or Identity Fraud
Scary but true: An unexpected dip could point to something fishy on your credit report, be it a payment misreported to the credit bureaus as late or a brand-new account you don’t recognize.
In any case, unexpected changes to your credit score are a great reminder to take a look at your in-depth credit history at least once per year. (A credit score update typically occurs every 45 days.) There are plenty of ways to check your credit score without paying, and you can pull your full reports annually at annualcreditreport.com. From there, you can file disputes with the credit bureaus — and the reporting lenders.
Recommended: Why Did My Credit Score Drop After Dispute?
Should You Be Worried About Your Credit Score Dropping?
As unsettling as a small credit score dip can be, if you’re carefully monitoring your credit and actively working on good financial habits, it’s usually not something to worry about. (Credit score monitoring lets you keep tabs on your score and earn rewards points when it increases.)
If, however, your credit score is dropping because you’re borrowing more than you can afford to pay back, taking out too many new loans or lines of credit at once, increasing your utilization ratio, or making late payments, it could be a wake-up call to start moving back toward healthier financial habits.
And, of course, if your dropping score alerts you to fraudulent or erroneous information on your credit report, it’s well worth the effort it takes to file a dispute and clear up that misinformation — before it wreaks even more financial havoc in your life.
Reasons Your Credit Score Went Down
As mentioned above, some of the most common reasons a credit score could drop include increased credit utilization (even if only temporarily), hard inquiries on your report, account closures, and errors or fraudulent information in your credit history.
Keep in mind, too, that the younger and less robust your credit history, the more weight each individual occurrence will have in your score. For example, if you’re a young adult who got their first credit card only a year ago, and still has only that single line of credit, a hard inquiry or balance increase could affect your score more profoundly than it would for someone with 15 years of credit history, thousands of dollars in available credit, and several different types of credit lines and loans.
What Can You Do If Your Credit Score Dropped by 10 Points?
If you notice your credit score has dropped by 10 points, you’re likely already monitoring your credit — which is a great habit to be in. Depending on why exactly it dropped, you may simply need to wait the fluctuation out. (For instance, if your score dropped due to multiple hard inquiries, there’s little else to do but wait — and stop applying for new lines of credit or loans.)
If you’ve recently increased your credit utilization or made a large purchase on a credit card, focusing on paying the balance back as soon as possible may also help. As always, making on-time payments in full on every account you have is one of the most important steps toward building and maintaining a healthy credit history and credit score.
Examples of Credit Score Dropping
Here are a few scenarios where you might notice a dip in your credit score.
Say, for example, you just successfully applied for a new credit card and then decided to apply for an auto loan, too. Even if your credit score was healthy enough to handle both of those inquiries — and get you qualified for both the new card and the loan — you may see a temporary dip because of the multiple hard inquiries.
Or maybe you regularly use a credit card for everyday purchases and then pay it off in full each month to take advantage of cash-back rewards. But one day, your car breaks down, and you find yourself needing to quickly fork over $800 you weren’t expecting to spend — and you reach for your everyday credit card. Even if you pay the total off in full at the end of the month, the temporary increase in your balance could diminish your score for a while, depending on when the amount is reported to the bureaus.
How to Build Credit
If you’re paying close attention to your score because you’re figuring out how to build your credit, the good news is, you’re already on the right track. While it’s impossible to build great credit overnight, awareness of your score and the factors that contribute to it is a great first step toward excellent credit.
There are plenty of ways to build credit over time, but here are some of the most important tips:
• Make your payments in full, on time, every time. Since payment history accounts for the largest chunk of your FICO score, being consistent with payments is a key to building credit. If you can, paying off your credit cards entirely each month can help you build your credit without paying interest or carrying a revolving balance.
• Avoid taking out too many loans or lines of credit at once. Along with the negative impact of multiple hard inquiries, getting yourself into too much debt too fast can make it impossible to keep up with payments and keep your utilization ratio low.
• Don’t unnecessarily close accounts. Even if you stop using one of your credit cards, consider leaving the account open so it can help lengthen your overall credit age. (Try to remember to use the card every once in a while and then immediately pay it back. The card issuer may automatically close the account if it’s inactive for too long.)
Allow Some Time Before Checking Your Score
Rome wasn’t built in a day, and neither was your credit score. While it can be tempting to constantly check in on your score to ensure it’s trending the right direction, it can take some time for the 10-point dip you noticed to pass — or for the changes you make in your daily habits to reflect in your score.
What is worth checking every day, however, is your spending. Knowing where every dollar you earn is going can give you insight into areas where you could afford to cut back and save more. Using a money tracker app can help.
Closing a Credit Card Account Can Hurt Your Score
As discussed above, closing a credit card account can hurt your score, even if you’ve paid off the card and no longer plan to regularly use it. That’s because having the account open can increase the length of your credit history and also provide you with more available credit, which can help keep your credit utilization low. In short, think twice before you close a credit card account once you pay it off!
What Factors Impact Credit Scores?
According to Experian, these are the factors that affect your credit score and how heavily they’re weighted in the calculation:
• Payment history, which refers to your record of making on-time payments to all of your accounts: 35%
• Amounts owed, which refers to the ratio of money you owe versus your available credit (aka credit utilization): 30%
• Length of credit history, or the average age of your credit accounts: 15%
• New credit, which takes into account the number of recent hard inquiries: 10%
• Credit mix, which favors those who have different types of accounts (a mortgage, auto loan, and credit card rather than only credit cards, for example): 10%
Pros and Cons of Tracking Your Credit Score
Tracking your credit score is one of the best ways to ensure you’re fully informed about what’s going on with your report. It also gives you the biggest leg up on nipping potential fraudulent charges or errors in the bud before they can have a deeply negative impact on your file.
But there are cons, too. For instance, if you’re paying hyper-close attention to your credit score and checking every single day, small, normal fluctuations of 10 points or less could stress you out.
As with everything else in life, the key is balance. Keep track of your score, sure, but don’t obsess over it every single day. This is especially true if you’ve checked your report and ensured it’s free of errors or fraud. Just keep paying your bills on time and avoid overspending, and your score will eventually catch up with your good habits. (A spending app can help you manage budgeting and bill payment.)
How to Monitor Your Credit Score
These days, there are nearly endless ways to keep track of your credit score without having to pay for the privilege. Many credit card companies offer FICO score tracking as a free perk, and you may also be able to access your score via your online bank account.
Keep in mind, though, that your score is not the same as your report, and only viewing your full report gives you the comprehensive details about what factors are going into your score. Examples include payment history, how long your accounts have been open, and how many accounts you even have in the first place. Checking your credit report is the best way to get ahead of fraudulent or erroneous information, so make sure you give them a look at least once a year.
The Takeaway
While a credit score drop of 10 points can be unsettling, in many cases, it’s perfectly normal — and will normalize so long as you continue to maintain your good credit habits. If it’s an unexpected fluctuation, however, it’s worth looking over your credit report for errors or fraud.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.
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FAQ
Why did my credit score randomly go down 10 points?
There are many reasons why a credit score might drop 10 points, including temporarily increased credit utilization, one or multiple hard inquiries on your file, or a recent account closure. To understand why your score is dropping, it’s a good idea to access your full credit report, which will help you ensure there’s no fraudulent activity or erroneously reported information in your file.
Is it normal for your credit score to fluctuate 10 points?
A credit score fluctuation of 10 points is fairly minimal and often normal, especially for those whose credit histories are younger and slimmer. If you only have a few accounts and they’re all relatively new, even small changes can have a relatively large impact on your score. However, as long as you keep making your on-time payments and avoid running up a large revolving credit card balance, these should automatically neutralize over time.
Why is my credit score going down if I pay everything on time?
Although payment history is one of the largest factors impacting credit score, it’s not the only one. Other reasons you might see your score decrease include a recent account closure, a change in your credit utilization ratio (caused by an account closure or taking out more debt), or a recent spate of hard inquiries on your file.
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SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.
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