Refinancing your loans can be a way to help reduce your monthly payments and help minimize the amount of interest you’ll pay over the life of the loan.

Whether you’re looking to refinance automotive, home or student loans, they each come with pros and cons. This ClearCheckbook Money Management Tips post will help you figure out if refinancing is right for you. Keep in mind that refinancing at the beginning of your loan while you’re still paying heavily toward interest is the best time to refinance. The closer you get to paying off your loan, the less a refinance might help.

The three most common types of loans you might have are automotive, student and home. Each of these loans has different requirements and fees associated with refinancing. We’ll cover each of these loan types and go into whether refinancing the loan might be right for you.

Why you might consider refinancing:
It might be wise to research refinancing your loans if you’ve match any of these criteria:

1. Your credit score has improved since taking the loan.
The interest rate you get on your loans usually has a very strong correlation to your credit score. If you took out a loan while your credit score was low (699 or below) but your credit score has raised up into the 700’s or higher, your chance of getting a lower interest rate is a lot higher than if your credit score was still low.

2. Interest rates have dropped since you took out the loan.
Interest rates have been at historic lows recently, but they fluctuate all the time. Assuming your credit score remained the same, refinancing when interest rates drop 1% or more from what you’re currently paying could mean a big reduction in monthly bills and interest over the term of the loan.

3. You didn’t get a good interest rate, even though you had good credit.
Just because you had good credit doesn’t mean you got the best rate when you took out your loan. Whatever the circumstances were, if you ended up with a higher rate than you think you can get now, refinancing at a lower rate could be a good choice.

4. Your financial situation has changed and you need to lower your monthly payment.
If you’ve run into some hard times financially and need access to as much cash as possible, then refinancing could potentially help get you some extra money each month.

5. You want to change your loan duration (eg: going from a 30 year fixed to a 15 year fixed mortgage).
Refinancing with a shorter term loan can help save you lots of money in interest over the term of the loan. If you’re financially stable enough and would like to pay off your home quicker, refinancing to a shorter loan term could be a good choice.

6. You’re currently facing hard times and need to reduce your monthly payments
Refinancing a loan doesn’t have to be entirely about saving money in the long term. Refinancing can also be a great option if you’re going through tough times financially and need to lower your monthly payments. This can usually be done by refinancing your loans for a longer duration. The downside is you’ll probably end up paying more over the course of the loan, but it can help alleviate any immediate financial issues. Then, when you get yourself back on solid ground you can work on refinancing again or paying off the loans faster.

How does refinancing a loan work?
No matter what kind of loan you have, refinancing works by taking out a new loan to pay off your old one. This new loan comes with a new interest rate and terms. You can refinance through your existing loan holder or with a different company. When refinancing, it’s always good to shop around and try to find a lender with the best rates and terms that fit your needs.

Automotive Loan Refinancing
Compared with other types of loans, refinancing an auto loan is about as easy as it gets. There is no appraisal and usually no fees associated with refinancing your auto loan. Credit unions usually offer some of the best interest rates when it comes to refinancing auto loans. The credit unions might require you to create a checking or savings account with them if you don’t already have one.

Assuming you meet one or more of the criteria above in the "Why you might consider refinancing" section, one of the first things you’ll want to do is get the current payoff amount from your existing lender. This is the amount left on your current loan and is the amount you’ll use when refinancing. If the payoff amount is higher than the value of your car then you might have trouble getting a new lender to refinance your loan.

You can find out how much you can potentially save by using a calculator like Bankrate’s auto loan calculator to determine what your new monthly payment might be and then subtract that amount from what you’re currently paying each month.

Like we mentioned earlier, refinancing in the first half of your loan’s term is going to save you the most monty since during that time you’re mostly paying interest. After that you’ll be paying more toward principal and refinancing will have less of a benefit.

If you need to lower your monthly payment but your payoff amount is worth more than the value of your car or you can’t find a lender to give you a new loan at a lower interest rate, you can try negotiating with your current lender to lower the rate or to extend the term of the loan. Extending the duration of your loan means you’ll be paying more in interest over time but it could lower your monthly payments.

Student Loan Consolidation / Refinancing
Before we get into the details a little more, let’s clear up what the difference between consolidation and refinancing is. Student loan consolidation is combining multiple student loans into one single loan. This makes it easier to have one monthly payment at one interest rate instead of multiple loans at varying rates. Consolidation takes the weighted average of your interest rates to come up with the new rate. Student loan refinancing on the other hand works by taking one loan out to pay off all of your existing loans, leaving you with just one payment. Refinancing has the benefit of letting you seek out better interest rates and loan terms.

Student Loan Consolidation
Like we said above, consolidation simply takes all of your existing loans and consolidates them into one single loan using a weighted average of your interest rates to determine the new rate. Consolidation can be done with federal loans through a Direct Consolidation Loan. By doing this you’ll keep all the benefits of your federal loans and might be necessary for enrollment in federal programs such as income-based repayment plans. Another drawback is that you cannot consolidate private and federal loans into a single loan.

Consolidation won’t save you any money and could potentially cost you more in interest. Consolidation makes sense if you’re struggling to pay your minimum requirements each month and want to extend the terms of your loan. You might also become eligible for income-driven repayment plans where you pay less each month if you’re not making much money, but more once you start earning more.

Student Loan Refinancing
Refinancing is a way to take out a new private loan to pay off all your existing student loans. There is no federal loan refinancing program so you’ll have to use a private lender which means you might miss out on any federal loan benefits you might be receiving. Loan refinancing has the added benefit of letting you negotiate a lower interest rate and different repayment terms which has the potential to save you a lot of money in interest.

Refinancing makes sense if you’re looking to lower your interest rates or switch to different repayment terms. Just like other loans, the rates and terms you’ll get will depend on your credit score and current income.

Why you shouldn’t refinance or consolidate your loans:
If you’re currently part of a loan forgiveness program through your work, you might want to skip refinancing or consolidating your loans or else the forgiveness terms might start over. You should check with your workplace to find out what the terms are for your specific loan forgiveness program. Additionally, loan consolidation might lead to the loss of some borrower benefits, such as interest rate discounts, principal rebates, or loan cancellation benefits as a result of switching lenders.

Home Loan / Mortgage Refinancing
Being one of the biggest purchases you can make with one of the longest repayment terms, a home loan can have a dramatic effect on your finances. This makes home loans a great option for refinancing in order to save you money each month.

Like other loan refinancing, when you refinance a home loan you’re taking out a new loan to pay off your old one. There are many reasons you might consider refinancing your home loan and may include lowering your interest rate, shortening the loan term, switching from/to an adjustable rate mortgage (ARM), consolidating debt or taking equity out on your home (cash out).

The old rule for refinancing a home loan was when the interest rate was 2% lower than what you’re currently paying. Now, most lenders will advise you to refinance even if you can only save 1% on your interest rate.

Home loan refinancing has a few drawbacks to consider. First, refinancing a home loan often includes closing costs that can be 3-6% of your mortgage. Second, you might be required to have an appraisal, title search and pay for application fees. All of these can be combined into an amount called the "break even point" which will help you determine if refinancing is right for you. The break even point is calculated by dividing the total closing costs by the amount you’ll save each month. For example, if you refinance and have $3,000 in closing costs and save $100 per month, it will take you 30 months, or 2.5 years, to break even on the cost of refinancing. If you plan on staying in your home longer than that then refinancing is probably a good option.

Another thing to consider is the rate and term of the new loan. It’s possible that refinancing your existing 30 year loan to a new 30 year loan could cost you more in interest over the lifetime of the loan. This is less of an issue if you refinance early on, but looking at these numbers will also help you figure out if refinancing is right for you.

Depending on your current interest rate and what the going rates are for loans, you could potentially switch from a 30 year fixed rate mortgage to a 15 year fixed rate mortgage with a much lower interest rate but not pay much more per month. This is the best way to dramatically reduce the amount of interest you’ll pay over the lifetime of the loan.

Cash-out or home equity loans are a different type of refinancing where you take out a new loan for more than your existing loan amount. You can then use the difference in amounts for home improvements, college tuition or paying off other debts. Keep in mind that you’ll still be paying interest on this money so using a home equity loan to pay off something like credit card debt will still result in paying interest on that. Another potential issue is transferring from an unsecured to a secured debt. If you miss a payment on your credit card you’ll lower your credit score and get calls from debt collectors. If you miss payments on your mortgage you’re at risk of foreclosure and losing your home entirely.

How much can refinancing save me?
While there are too many variables at play to give you a straight answer, there are many calculators available online that can help you determine if refinancing one of your loans is right for you. Simply do an online search for "xxxx loan refinancing calculator" and you’ll find several different tools that can help you make the decision. Keep in mind that refinancing isn’t always about saving you the most money. If you’re going through tough times and are having trouble paying your minimum monthly payments, refinancing at a longer term can help dramatically reduce those monthly payments while you get yourself back into a stable financial position.

Cutting down on your food expenses is one of the easiest ways to save extra money each month.

In this blog post we’ll use some eating habits that we believe are about normal for a single adult living and working in the US. Then, we’ll show how you can save nearly $100 each week by simply doing a better job of buying and cooking your own food. Everyone is different and your daily habits might not fall in line with the example but we hope you can take some of these ideas and apply it to your situation.

Breakfast:

This is a savings of $4.30 per day. If you don’t want to purchase a coffee maker, there are good and inexpensive alternatives for making a single cup such as the Aeropress or a french press. The cheapest solution would be to use instant coffee.

Lunch:

This is a savings of $4.65 per day. While microwavable meals may seem cheap and easy, we don’t recommend them because they usually aren’t that filling and are generally not that healthy. Another great way to cut your lunch costs even more is to eat leftovers.

Snacks:

This is a savings of $0.50 per day. Another alternative is to eat your lunch gradually throughout the afternoon so you don’t have to purchase additional food for snacking.

Dinner:

This is a savings of around $10 per day. The added benefit is you now have 2-3 extra meals for lunches or dinners later in the week. If you already eat dinner at home try to plan and cook meals that will last several days instead of buying a frozen dinner that will only last you one meal.

Adding all of this up will save you $19.45 per day. Over the course of a 5 day work week this will save you just shy of $100 per week. You can increase the amount saved by spending a couple hours once per week making a lot of food that you can refrigerate or freeze and then eat throughout the week. Investing in a slow cooker and making a hearty stew or slow cooking some meat and then pairing that with some rice and veggies makes for a filling and extremely cheap meal.

If you need to eat out at a restaurant, you can always save a couple of dollars by ordering water instead of a soda.

We recommend setting up your Spending Categories to really drill down into where your food spending is going. If you’re already categorizing all of your expenses then the next step is to set a budget for both your eating out and your groceries and work on spending less money eating out and shift that over to groceries where every dollar you spend goes much farther.

If you’ve changed your eating habits and have noticed the changes in your budgets, we’d love for you to share your experience in the comments!

Challenge yourself to save a few extra dollars each month by creating some easy-to-complete goals.

Now that you’ve already started meticulously tracking your expenses, why not take the next step and work on reducing your spending even more on one or more of your spending categories?

These goals don’t need to be difficult. They can be something as simple as buying one less coffee per week or seeing one less movie per month and watching that money stay in your bank account. The real reason you want to set some short term goals is to test yourself and see if you’re able to cut certain things out of your lifestyle or reduce spending in certain areas. If you find that making those changes is easy then you can incorporate the change permanently and have even more money available to you later on.

You can either make a mental note to spend less this week or you can adjust your budget by a few dollars and work on keeping under budget for this week or month. To edit your budgeted amount for your spending category, open up your budgets and click on the budget you want to change. This will expand the budget and you’ll see an option to Edit the budget.

When the Edit Budget form appears, simply reduce the Budget Amount by the amount you want to save and then update the budget.



We hope that by challenging yourself to spend a little less every now and then you’ll learn that it’s actually easy to keep those changes in full effect for the future. Once you start cutting back on your spending some more you can take that extra cash and apply it toward reducing your debt or putting it away into your rainy day / emergency fund.

Let us know in the comments below what you’ve decided to cut back on and if it’s helped you put a little more towards your savings or toward reducing your debt.

Don’t throw away money by letting unused memberships continually withdrawal from your account.

With so many different companies and services charging a recurring fee for upgrades or service (yes, including ClearCheckbook), there are bound to be some that you’ve forgotten about and don’t use. Cancelling these unused services can potentially save you a lot of money.

Some of these recurring fees will be from companies you recognize, like a monthly Netflix or Hulu charge. Others might be for services you no longer use, like if you have an Xbox live or Playstation Network account that you don’t use. You might have simply forgotten about some like a gym membership that you signed up for at the beginning of the year and haven’t used in a while. The hardest to catch are ones that you didn’t even know you signed up for or were tricked into when entering your billing information online. Keep an eye out for fees from companies that you don’t recognize.

How can you find these recurring membership fees? The easiest way is to stay on top of entering your transactions into ClearCheckbook and Jiving them against your bank statement. If you follow the instructions in our Jiving walkthrough then you’ve probably already found some.

If you’re just getting started with ClearCheckbook or you import your transactions via our Import Transactions tool, looking for these transactions is as easy as going through the last few months of your bank statements looking for fees from companies you don’t recognize or for services you no longer use. Remember that some services renew annually while others can renew monthly. Regularly keeping an eye on your transactions will ensure you catch any of these quickly.

What should you do when you find one of these charges? Don’t immediately file a chargeback with your credit card company against the recurring fees you don’t want. Doing so actually violates how chargebacks should be handled and can result in the chargeback being reversed and the billings continue. Instead, make sure you attempt to contact the company either via email or phone first. If you can retain proof of this attempted contact or the company responses and they still refuse to cancel your membership then you’re well within your rights to file a chargeback.

Have you found any tricky hidden recurring fees on your statements? If so, let us know in the comments below so others can be aware of them!

Reduce your energy costs at home to help keep money in your pocket. Changing a few habits and upgrading some outdated items can have a significant impact on your monthly energy bills.

In this Money Management Tips post we’ll cover 5 topics you can use to help dramatically reduce your energy bill each month. Some of these tips might seem like common sense while others you might not have thought about.

1. Replacing old inefficient incandescent light bulbs with CFL or LED lights
Countries around the world have passed or are working on legislation to phase out the use of incandescent light bulbs due to their inefficiency and short lifespan. The lifespan of bulbs is usually represented in the number of hours the bulb will provide light before burning out. The lifespan of your typical incandescent bulb is 1,200 hours. CFL bulbs have an average lifespan of 30,000 hours while LED bulbs can last upwards and exceeding 50,000 hours.

CFL (Compact Fluorescent) Bulbs
Rather than passing electricity through a coil of wire, CFL bulbs pass an electric current through a tube filled with argon and mercury vapor and are up to 70% more energy efficient than an incandescent bulb. CFLs can run about $1 more per bulb than an incandescent but the cost savings over the lifetime of the bulb can be about $150 less than an equivalent number of incandescent bulbs.

The downsides to CFLs are the fact that they do contain small amounts of mercury, cannot be used with dimmer switches and can take a few seconds to reach full brightness after being turned on.

LED (Light Emitting Diode) Bulbs
LED bulbs use a number of small LED lights to output an acceptable amount of light. LED bulbs are more expensive than incandescent and CFL bulbs but have a lifespan of 50,000+ hours and use less energy than CFL bulbs and far less than incandescent.

The downsides to LED bulbs are the price and some people have reported some buzzing or flickering from their bulbs when used on a dimmer switch.

The savings
Assuming 25,000 hours of usage (about half the life of an LED bulb) and the cost of $0.12 per kilowatt hour, you can consider the following costs per bulb type: $201 for incandescent, $48 for CFL and $38 for LED. Source. These are for ONE BULB so imagine the cost savings if you changed over more of the bulbs around your house. Even if you don’t have the means to change every bulb in your house over to CFL or LED, simply changing the most used ones (like your kitchen, living room and bathroom) could save you nearly $50 per year.

2. Better management of your heating and cooling
According to the Energy Information Administration, about 42% of home energy costs go to heating and cooling. This leaves a lot of room for improvement and areas to save money.

A 1978 research paper (“Energy Savings through Thermostat Setbacks" by Nelson and MacArthur) found that in the winter, on average, if you turn the thermostat down by one degree Fahrenheit for eight hours every night, you’ll use about 1% less energy. If you raise the temperature in the summer and lower it in the winter while you’re not home or in bed you can dramatically cut back on your energy costs.

If you install and properly use a programmable thermostat you can also easily save on energy costs without having to remember to adjust your thermostat throughout the day. Several studies have found that many people improperly use programmable thermostats however and actually end up with higher energy usage than without. This comes down to people overcompensating the assumed savings from adjusting the temperature during the day or night with dramatically more usage in the morning and evenings. Just because you have the potential of cutting back on energy by reducing demand when you’re gone or sleeping doesn’t mean you can now use more energy in the morning and evening when you’re home.

An Environmental Protection Agency (EPA) document from 2004 describing the Energy Star programmable thermostats specification [PDF] summarizes the research into their efficacy:

Consumers are often advised that installing a programmable thermostat can save them anywhere from 10 to 30% on the space heating and cooling portion of their energy bills. While reliant on proper use of the programmable thermostat, such savings are easily true in theory; however, there needs to be more field-tested data to better substantiate savings claims. Analyses from recent field studies have suggested that programmable thermostats may be achieving considerably lower savings than their estimated potential.

In 2000, the Energy Center of Wisconsin published a report entitled “Programmable Thermostats Gone Berserk? Taking a Social Perspective on Space Heating in Wisconsin" [PDF]. The study found, in part, that:

Despite the emphasis that has been placed on the use of programmable thermostats to reduce thermostat setpoints and so save heating energy, respondents with programmable thermostats report thermostat setpoints that are not substantially different from those of respondents with manual thermostats.
[…]
These details and the conclusions above lead us to suspect that the aggregate savings that can be expected from the installation of programmable thermostats in residential housing is probably quite modest.

3. Unplug unused electronics
One thing you might not think about is the power your various devices and appliances use even when “turned off". This power draw is called standby power and can account for up to 10% of your home’s energy usage (source). This can add up to $100 per year just to power unused devices.

Which of your devices and appliances might be consuming power even though they’re off? Here are some basic rules you can look for:

• Anything with a remote control (TV, VCR, cable box, stereo)
• Anything with an external power supply
• Anything with a digital display, LED status light or digital clock
• Items that contain battery chargers

What can you do to cut back on standby power? The best way is to simply unplug the unused or rarely used items when you don’t need them. One tip is to use power strips with an on/off switch so you can easily turn on or off clusters of electronics (like a TV, VCR and gaming console) without having to physically plug and unplug them.

Here are some common devices you can unplug when not being used:

• TV in a second bedroom or basement that gets used a few times a year
• Gaming consoles (Xbox, Wii, Playstation, etc)
• A printer that doesn’t get used regularly
• DVD / Blu-ray players
• Any kitchen devices with a clock or LED status that you don’t use daily

4. Changing your water usage habits
Being aware of how you use your water can affect both your power and water bills. Energy.gov has a list of 15 ways to save on your water heating bill. Some of the tips we believe will be the most beneficial are:

• Reduce your hot water heater temp to 120’F
  • Every 10’F reduction can save 3-5% on water heating costs
• Use cold water for most laundry loads and in the rinse cycle
  • This can be a difference of around $0.65 per load
• Fix any leaks. A leak of 1 drop per second can cost $1 per month and might be as easy to fix as tightening the connection on a pipe
• Don’t let the faucets run while brushing your teeth or cleaning dishes
  • Letting the faucets continually run while brushing your teeth or cleaning your dishes can waste several gallons per day. Over the course of a month this can really add up quickly and affect your water bill.

Simply being cognizant of how you’re using your water and when you’re using your hot water heater (every time you use the hot water the tank will get refilled and needs to be reheated which uses power) you can help cut back on your costs. While each of these alone might not add up to a lot, when combined and used with other tips they can help you save over time.

5. Air seal your home
Sealing your home to prevent drafts is important to keep hot air inside during the winter and cold air inside during the summer. Energy.gov has a lot of information and tips on air sealing your home.

There are a few easy fixes to help seal your house and help prevent your conditioned air slipping through the cracks.

Caulking around stationary joints
There might be gaps around your door or window frame and the wall where air is seeping through. To fix this problem, add caulk to any gaps around the frames where they meet the wall. Doing this can save 10-20% on your heating and cooling bills. Here’s an Energy.gov article that covers how to caulk around these joints.

Add weather stripping to moveable joints
After sealing around the frame and wall with caulk, the next step is to eliminate any gaps between your doors and windows and their frames. Weather stripping is usually rubber or foam that has a sticky backing that fits around the frame and will fill the gap between a door or window and frame that aren’t properly fit. If you look at your door and can see light or gaps between the door and the frame then that means air can be seeping through. Adding weather stripping can save between 5-10% on your heating/cooling bills. Here’s an Energy.gov article that covers weather stripping.

Install insulation film over windows during winter
Window insulation film is a plastic sheet that you apply to your windows in the winter to reduce heat transfer. There are two types of insulation film generally available. The first is a solar control film that works by reflecting infra-red light and absorbing UV light. This film sticks directly to the glass. The second is called a convection control film and is simply a piece of plastic that covers the window to trap a pocket of air which acts as insulation. Some types of this film are shrink wrapped by heating with a hair dryer after taping to the frame.

Summary
There are many ways to reduce your energy costs by changing some of your habits around the house or from buying some more energy efficient items. While it might be difficult to use and apply every one of these tips, we encourage you to give some a try.

If you’ve found ways to cut back on your energy bills please share your experiences in the comments below!

Do you have enough saved to cover a major car or home repair or unexpected hospital bill? If not, having money set aside for emergencies is extremely important.

In this Money Management Tips post we’ll explore some ways to help ensure you’ll be able to afford any large unexpected bills.

What is a rainy day / emergency fund?
For the sake of simplicity we’ll be referring to this money as an emergency fund through the rest of this article. An emergency fund is money you’ve set aside for any unexpected bills, job loss, illness or decrease in salary. It’s a way to make sure you’ve got some excess cash available in case of an emergency so you don’t have to rely on credit cards which can potentially lead to large amounts of credit card debt.

If the transmission dies on your car do you have the means to pay the $2,000-$3,000 to get it fixed? If the furnace in your house dies in the middle of the winter do you have a few thousand dollars to buy a new one? If you were seriously injured in an accident and need to cover a several thousand dollar insurance deductible, can you do that? Will you be able to cover a four to seven months of rent / mortgage and expenses if you suddenly lose your job?

These are all cases where having money set aside in an emergency fund will make an extremely difficult time a lot easier to manage.

How should I manage my emergency fund?
This really comes down to how you manage your own finances. If you have the discipline to keep everything in one account then all you need to do is make sure you have extra cash available in your checking or savings account (How much? We’ll cover that later).

Another option is to have separate accounts for your various emergency funds. Keeping this money in a high yield savings account is a great way to earn a little extra money as well. Using this method, you’d have one combined or separate accounts for what you’d like to cover with your emergency funds. For example, if you have a car and own your home then it might be good to have an account for each. Then, each month you’d transfer some amount of money to each of those accounts where the money stays hidden away until an emergency occurs.

If you decide to open an account for each type of emergency it’s important to make sure the account has enough money to cover your needs if an emergency occurs. Usually a few thousand dollars will cover an emergency or unexpected bill.

How much money should I have in my emergency fund?
This really depends on your financial situation and what kind of emergencies you might encounter. Someone living in a rented apartment with no car will need far less of an emergency fund than someone who owns a home and has multiple vehicles.

At the minimum we’d suggest having at least $1,000 set aside for each vehicle you own. Take a look at your health insurance information and find out what your deductible is and keep that amount. This could be anywhere between $500-$3,000 depending on your insurance plan. If you have a spouse and children, keeping the deductible amounts for them is also advisable. Owning a home comes with a lot of unexpected expenses as well. Having at least $2,000 put away for any emergency replacements would be a good start. This would let you quickly buy a new oven, a/c unit, refrigerator, etc without having to worry about the money. Having an account to cover personal expenses for a few months would also be great in the case of job loss. Simply add up all your expenses (mortgage/rent, car loan, groceries, gas, etc) for 3-4 months and keep that amount tucked away.

If you don’t have the money available to immediately transfer to your various emergency funds then you can always transfer $25-$50 per month into your accounts until you’ve reached your necessary amounts.

Here are 8 ideas that will help you make your savings work for you by taking advantage of higher interest rate and other investment accounts.

This Money Management Tips post lists some ways you can earn a little more from your money that’s just sitting in a low yield savings account.

Before we get into some of the various accounts and investments, it’s important to remember that you should always have some money available for any unexpected accidents or emergencies. You don’t want to have all of your cash tied up in investments that you can’t immediately reach.

In this post we’ll list some choices in order of how risky the investment is. Generally, the less risky an investment is the less return you’ll get. It’s up to you to determine your level of risk. We break down each investment based on risk, amount of work, liquidity of your money and potential return on investment. Balancing these categories is important to determining which investment is right for you.

1) Standard Checking / Savings Accounts
No Risk. No Work. High Liquidity. Very Low Return. FDIC Insured. 0.01-0.05%
These are your standard checking and savings accounts from most national banks. You can quickly remove money from these accounts to pay bills or to use in case of emergency.

2) High Yield Online Savings / Money Market Accounts
No Risk. No Work. High Liquidity. Low Return. FDIC Insured. 1%
These are usually online-only accounts or special accounts set up through your bank. You can usually withdrawal or transfer your money out of the account fairly easy but read the fees carefully because you can be charged for those withdrawals in some cases.

3) Certificate of Deposit (CD) Accounts
No Risk. Little Work. Medium Liquidity. Low Return. FDIC Insured. 0.5-2%
CDs are what’s referred to as a Timed Deposit. This means you deposit your money and agree to leave it in the account for a set amount of time, with longer durations generally giving higher return. Removing money early can result in fees. There is a technique called CD Laddering where you start separate 1, 2, 3, 4, and 5 year CDs. Once one of the CDs matures, you invest the money into a 5 year CD. The result is that after 5 years you’ll have a CD maturing each year.

4) Bond Index or Mutual Funds with a Brokerage Account
Low Risk. Some Work. Medium Liquidity. Low Reward. Not FDIC Insured. 1-3%
By opening a Brokerage account and letting others manage your money, the amount of work is low and you’re leaving all the investing to professionals whose job it is to pick the best investments. Since these funds are managed, there’s usually a small percentage fee associated with them. These funds are usually made up of many different investments or can be very specific in the companies the mutual funds are comprised of. For example, rather than investing in several health care companies you could invest in a health care fund that has many different health care related companies in their portfolio.

5) Purchasing Government / Treasury Bonds direct
Low Risk. Some Work. Medium Liquidity. Medium Reward. Not FDIC Insured. 1-5%
Treasury Bonds are fixed interest savings bonds issued by the government and are guaranteed to be paid out. There are Treasury Bills, Treasury Notes and Treasury Bonds. Each have different times to maturation and will have different interest rates.

6) Stock Index Funds, Mutual Funds & ETFs with Brokerage Account
Medium Risk. Low Work. Medium Liquidity. Potentially Moderate Reward. Not FDIC Insured. 6%+
This is similar to #4, but instead of investing in Bond Indexes you’re investing in Stock Index Funds and ETFs in addition to mutual funds. These generally have higher returns than other investments and depending on the fund you invest with. Research should be done to make sure the fund you’re investing in has a good history and fund managers. These funds usually have fees and minimum purchases associated with them.

7) Trading Individual Stocks
High Risk. High Work. Medium Liquidity. Potentially High Reward. Not FDIC Insured
Rather than investing in a fund that invests in many individual stocks, you’re fully in charge of buying and selling your own stocks. This means you have to do due diligence in selecting stocks you believe will give you the best return. There are fees associated with both buying and selling stocks.

8) Investing in Residential or Commercial Real Estate
High Risk. High Work. Low Liquidity. Potentially High Reward. Not FDIC Insured
This requires a high upfront investment but has the potential to provide great returns. There are several ways to invest in real estate ranging from buying, renovating and reselling a home, renting properties, buying and then leasing commercial space or Real Estate Investment Trusts (RETI).

We just want to reiterate that you should double check all fees associated with accounts and investments and do your research to make sure you know what you’re getting yourself into. Make sure you're also being smart with your money and not investing all of your savings in a very risky investment that might end up with you losing money instead of making it.

Even with a few minor changes, like opening a high yield savings account, you can potentially earn much more than you are currently if your money is parked in a standard checking or savings account.

We’ll dive into more detail for the various accounts and investments in future Money Management Tips posts.

If you have any feedback or want to share with us and others how you’ve made your money give you a better return on investment, please post in the comments!

Save $45 or more by challenging yourself not to eat out for breakfast and lunch this week!

It’s amazing how quickly the costs associated with eating out add up. With a little planning you can make your own breakfast and lunch and you’ll be surprised by how much you can save.

The Challenge:
This week’s Goals and Challenges series post is all about cutting out the high costs (both financially and for your health) associated with fast food for breakfast and lunch. Make it your goal to plan some meals ahead of time and eat them for breakfast and lunch this work week.

How should I prepare for the challenge?
The best way to start this challenge is to go into it with a meal plan. Since we’re starting this challenge easy by only having you prepare breakfast and lunch for 5 days, coming up with a meal plan will be very easy.

We recommend going and buying groceries on Saturday or Sunday and then using Sunday to prepare some of the meals ahead of time which will make it faster and easier to get out the door in the morning. Also keep an eye out for ways to save money at the grocery and find ingredients you can use for both breakfast and lunch. As you’ll see below, I buy dry black beans in bulk and get about 4x the amount for the same price.

A meal sample for the week:
In my example we’ll focus on some protein heavy meals which will help keep you feeling fuller for longer. You can certainly eat cereal or oatmeal for breakfast but the high amount of carbs and sugar will leave you feeling tired and hungry after a couple of hours which could lead to snacking or buying more food.

This is the plan I follow but you can certainly alter it to fit your dietary needs. For breakfast I make a two egg omelette filled with black beans (about ¼ cup) and some cheese, seasoned with salt, pepper and turmeric. I’ll top the omelette with a few tablespoons of salsa. If I know it’s going to be a late lunch I’ll also have a piece of toast with some butter and jam.

If you don’t have time in the morning to make breakfast, use Saturday or Sunday to prepare some meals so you can easily heat them up. Scrambling up a bunch of eggs with some diced peppers and onions and then stuffing that in a tortilla makes a really quick and easy meal to reheat in the morning.

For lunch, try to skip on the frozen microwaveable meals. They’re often times packed with sodium and focus on low calorie counts which will just leave you feeling hungry and unfulfilled after an hour or so. Instead, work on making a hearty sandwich or bringing leftovers from last night’s dinner.

I have access to a stovetop at lunch so I like to make quesadillas. I use whole wheat tortillas, cheese, spinach, diced tomatoes, lots of black beans (for that protein kick), onions and bell pepper in my quesadilla. I’ll also mash up half an avocado with a little salsa for a quick side of guacamole which gives a lot of healthy fats and will help keep me full. I’ll often bring an apple and some chips and hummus to snack on a little before or after lunch to help keep me from wandering out and buying a snack.

Rather than grilling up a quesadilla you could always opt for a filling sandwich. Buy some of the heartier bread (whole grain with nuts or seeds), throw on some cheese, tomato, red onion, spinach and any protein of choice.

As referenced above, when I go grocery shopping I try to buy ingredients that I can use for both breakfast and lunch. The cheese, black beans and salsa I use for my omelette and quesadilla are all the same. This saves me money and makes it less likely that something will go bad in the fridge from not being used.

Buying dry black beans and cooking them yourself is significantly cheaper than buying canned beans. It takes 2 hours and can be done while you’re doing other chores around the house. Add about 1 cup of dried black beans to a 3-4qt pot and cover with a few inches of water. Bring to a boil and then reduce to a simmer for an hour and a half. Drain the beans and store in the fridge for 5-7 days. No overnight soaking necessary. I don’t season the beans since I found that spoils them faster or makes them tougher. I rely on seasoning them when using them in a meal.

Mixing up what you eat is also important so you don’t get bored of cooking and then start thinking about eating out again. Stuffing the omelette with different ingredients, cheeses or seasonings will help a lot.

The amount you spend on food for breakfast and lunch for the week will probably be about what you spend in a single day on fast food if you eat out for both breakfast and lunch. These savings add up extremely fast.

The savings
Based on the assumption that eating out for breakfast and lunch will cost you $5 and $8 respectively per day, this means you're spending $65 per 5-day work week eating out. For about $20 you can easily buy all the ingredients needed for the meals listed in the example above which can save you around $45 during your work week. Other ways to help save are to make your own coffee instead of spending $3-5 per day to buy coffee out. If you buy soda, tea or juice throughout the day, try cutting those out and replacing it with water.

What next?
What can you do with all the money you’ve saved by making your own breakfast and lunch? We recommend applying it toward any credit card or student loan debt, an extra payment on your mortgage or savings / retirement funds.

After you see how easy it is to save money by making your own meals for breakfast and lunch, we challenge you to also try making all your own dinners for the week as well!

If you’ve successfully accomplished the challenge and have any advice for others on how you did it, please share it with us in the comments below!

Credit scores are one of the most important factors when it comes to getting loan approvals or getting good interest rates on those loans. If you have poor or bad credit (scores below 650) then it would be in your best interest to work on raising your score.

This blog post covers how your credit score is calculated and gives you some advice on ways to help raise your score.

Find your Credit Score / Credit Report
Before getting started we recommend checking your credit score and getting your free annual credit report. Your credit report will list all inquiries, outstanding loans and debts and all lines of credit. You’ll use this report to track down any discrepancies and work with debt collectors to lower or drop some of your outstanding debts. In the United States, you can obtain your credit report for free through AnnualCreditReport.com. This is what the credit rating agencies use to determine your credit score.

The Consumer Financial Protection Bureau provides some information on how to get your credit score. If you already have a credit card you should check to see if they provide you with your score for free. We know that both Chase and Capital One customers can check their credit score for free.

How is your credit score calculated?
Since the credit reporting companies (Equifax, Experian and TransUnion) use proprietary formulas to determine your scores, there is no way to know exactly how your score is calculated but there has been a lot of research done and some general guidelines can be used. What is known is that the calculation is broken into five major categories with varying levels of importance, all of which are taken into account when determining your overall score. These categories are (in order of importance):

• Payment history (35%)
  • The payment history category is determined by looking at how well you’ve paid your prior obligations. Past issues such as bankruptcy and delinquency are also factored into this category. The severity of issues, time it took to get resolved and how long since the problems are also factors in determining this part of your score.
    
    The best way to keep this portion of your score high is to pay your debts early or on time, every time.
• Amount owed (30%)
  • This is how much you currently owe to lenders. This category looks at current amount of debt and the number of different types of debt you currently have. If you have many different lines of credit, loans or debts, this will adversely affect your score.
    
    There is also a ratio called the 30% Credit Utilization Rule that says your score is negatively affected if you currently borrowed more than 30% of your credit limit, not just for your overall combined limits but for each individual line of credit. This means if you have a $1,000 credit limit on a credit card and you spend $400 one month, your score could take a slight hit. Keeping your spending low will help improve your credit score.
• Length of credit history (15%)
  • There’s not much you can do to affect this one. This is how long you’ve had lines of credit open. The more credit history you have the better your credit score will be. Someone with 10 years of on-time payments is a lot less risky than someone with 1 year of on-time payments in the eyes of creditors. Keep in mind that closing old credit cards can have a negative impact on your credit score since the history associated with those cards will be removed.
    
    If you don’t already have any lines of credit, it’s recommended that you open a credit card (more about that below) to start building some history.
• New credit (10%)
  • If you’re constantly opening new lines of credit this is seen as a negative in the eyes of the credit reporting agencies. Opening new cards can be seen as you having financial pressures which indicates problems to them. Opening one new card isn’t going to greatly affect your score but opening 5 new cards probably will.
• Type of credit used (10%)
  • Having a mix of credit types is seen as a positive to the credit reporting agencies. This means someone with on-time payments to a mortgage, auto loan and credit cards is a lot more trustworthy than someone who only has on-time payments made to one credit card.
    
    This is a relatively small percentage of your credit score though so it’s not recommended to go out and get a new loan just to try and improve your score.

Improving your credit score:
It becomes a lot easier to work on improving your credit score now that you know the factors that determine your credit score. If you already have one or a few credit cards, the most important thing you can do is make sure you’re not maxing the card out (try to stay below that 30% of credit limit rule) and paying your bill on time.

If you’re having trouble staying below the 30% rule, make sure you’re properly tracking your spending in ClearCheckbook and look for areas you’re overspending and can cut back on. One extremely easy way to keep your spending low and to ensure you pay on time is to use your credit card for one thing per month, like buying a tank of gas, and then immediately pay the bill when the transaction posts. This will keep your payment history excellent and you’ll also keep your debt utilization low which is very important.

Raising your credit score above 700
The technique below was taken by researching what others have done to raise their score from the 500’s up into the 700’s. We don’t guarantee that these techniques will work for everyone and the issues might not be the same ones you face which are causing you to have a low score. We hope you can take some ideas from this and apply it to raising your score.

Step 1: Get your current credit score
The first step to raising your credit score is to know what your current credit score is. We mentioned a few ways you can get your score earlier in this post but you can also sign up for a free service like Credit Karma that lets you regularly track your credit score. Credit Karma doesn’t require any billing information and is legitimately free. They make their money off targeted advertising based on your credit history.

Credit scores range from 300-850 and are broken into a few categories based on your score. The score categories are: 500 or below = bad; 550-649 = poor; 650-699 = fair; 700-759 = good; 750 and above = excellent.

Step 2: Get your full credit report
Next, you’ll want to get a full credit report that lists all accounts. Use this report to find any accounts that are delinquent or have gone to collection agencies. You’ll be using this information in the next step to work on removing some of these delinquent accounts.

Like we mentioned above, you can use AnnualCreditReport.com to get a free credit report.

Step 3: Dispute debts / Negotiate with debt collectors
Call each of your accounts and dispute each one. The hope here is that they can’t prove the account is real or that they followed the law in regards to the Fair Credit Reporting Act (FCRA) and they will remove the account from their system, and thus, your report. Also ensure that any debt collectors that have contacted you are adhering to the Fair Debt Collection Practices Act. If you believe a collection agency is breaking the terms of this act you can file a dispute with the Consumer Financial Protection Bureau.

For the remaining delinquent and/or other accounts in collections that weren’t removed, work on negotiating down the debt. Call the account holders and let them know you can’t afford to pay the entire debt but want to settle now and can pay them a certain amount (target about half of what the debt amount is). You’ll probably need to speak to a manager to get this approved but this can greatly reduce the amount owed.

An additional option is to sign up for a service that sends letters on your behalf to your remaining accounts demanding that they show proof and accuracy of any negative items on your credit report. These services do charge either an upfront or monthly fee so they may not be for everyone. While you might have ethical issues with using a service like this, it has helped people in the past get items removed from their credit report.

After doing all of this the goal is to have removed or reduced the amount owed to as many of your accounts as possible which should make it easier to pay them off.

Step 4: Pay off any remaining delinquent accounts
After negotiating debt reductions you’ll need to pay off your existing debts. If you have the money available then you should pay off the debts immediately. If not, we recommend using the ClearCheckbook Debt Snowball Tool to manage your debt payments. Paying off your existing debts will dramatically improve your credit score since the amount of debt you owe makes up 30% of your credit score.

Step 5: Start building good credit
Because payment history makes up the biggest portion of your credit score it’s important to have a good track record of on-time payments. One way to do this is to get a credit card and make one purchase per month and immediately pay the card off. An extremely easy way to do this would be to use the card once per month to buy a tank of gas for your car.

Depending on your current credit score you might not get approved for an actual credit card. If that’s the case you can sign up for a secured credit card. Secured credit cards require that you essentially pre-pay the card with a certain amount. Credit limits on these cards are generally low but that’s OK since all you care about is making the one small purchase and immediately paying it off in full each month.

Step 6: Continue with on-time payments / building credit
Since the most important aspect of your credit score is your payment history, it’s extremely important to continue to pay your loans, credit cards and bills on time. If you had a secured credit card and have been using that to raise your score, see if you can open a traditional credit card and continue making a small purchase on that and then pay it off in full each month.

Having a few different lines of credit is always a good thing but that doesn’t mean you should go buy a new car just to get an auto loan. Make sure you can afford to purchase a new vehicle or home if you’re planning on opening a new line of credit.

Step 7: Work with any account holders to remove late payment reports
This falls into the “it never hurts to try" category. If you made some late payments to a credit card or auto loan in the past but have had good payment history since then, you should try calling the companies and asking them if they will remove the late payment notices from your report. This plays into the ‘Payment history’ category which is the biggest factor to determining your credit score. If the companies will remove these late payment notices then it can have a dramatic effect on your score.

Hard vs Soft Pulls
One last thing we wanted to mention before wrapping up this blog post are the two ways your credit score can be accessed. When you check your credit score through a service like Credit Karma or through your credit card’s website, these are soft pulls and do not affect your credit score at all. Hard pulls are made when applying for a loan, a new credit card, or anything that requires a company to check your FICO score. Hard pulls do affect your credit score and will remain as inquiries for several months.

Final words
There’s a lot that goes into determining your credit score. The most important things you can do are to pay your bills and debts on time, stay within the 30% rule and don’t open as many lines of credit as possible. Everything in this post is meant to provide some information and some possible ways for you to raise your credit score. We encourage you to do some follow up research on your own before attempting any of the techniques in this post.

Setting up your spending categories appropriately is absolutely the best way to start tracking where your money is going and the first step to setting up your budgets.

In this Money Management Tips post we’ll cover the essentials of properly setting up your spending categories in ClearCheckbook, how to view your monthly spending and finally how to set up budgets to keep your spending in check.

Setting up your categories:

We automatically create some default categories for you when you sign up with ClearCheckbook. These are some commonly used categories but are definitely not all-encompassing and we encourage you to add as many spending categories as you need to properly track where your money is going.

To manage your categories, click on Settings at the top right side of the page and then click on Categories. At the top of the page you’ll see a form where you can add new categories.



To add a new parent or sub category, enter the name of the new category in the Category Name field. Next, decide if you want this to be a parent or sub category. To create a new parent category, leave the Parent drop down list set to ‘No Parent’. If you select a category from the Parent drop down list, the new category will become a child of the selected category. Finally, click the Create Category button.

You want to make sure you create categories for everything you spend money on regularly. For example, if you regularly go to the movies, you should create a Movies category (maybe put this as a subcategory to Entertainment). If you do a lot of shopping you should create a Shopping parent category and then make subcategories for various articles of clothing. We’ll look at all of these in the reports later to see how much you’re spending and help you determine places you can cut back on.

Categorizing all of your transactions:

This step is extremely important. Whenever you add your expenses to ClearCheckbook you should be categorizing those transactions appropriately. When starting out, we recommend being extremely specific with your categorizing. For example, if you go to a store that sells both groceries and clothes and you buy some of both, you should split the transaction and categorize the amount you spent on each separately. Remember, when splitting a transaction the parent should not be categorized, just the split amounts.

Viewing your spending for your various categories:

We have several great reports for tracking where your money is being spent. The first is the Category -> Text reports.



The Category -> Text reports show a breakdown of your spending per category per month along with averages and totals for the year. Using this information you can quickly see how much money is being over spent in various categories that you might not have expected.

Another great report is the Category -> Pie by Year pie chart. This chart has all of your categorized spending broken apart by category for the entire year. Seeing large pieces of the pie can really help determine areas you need to cut back on spending.



Once you’ve looked at the various reports you should determine where you think you need to cut back on spending and how much you want to work on reducing your spending on your various categories.

Creating Budgets to keep your spending under control:

After identifying some categories you think you can cut back on, the next step is to create budgets to help you keep your spending in check. To create a new budget, click on Budgets at the top of the page. If you haven’t already created any budgets then you’ll see a form where you can add a new budget. If you’ve already added some budgets, click the blue “+Budget” button near the top of the page to bring up the Add Budget form.



Using the options of the form, set up the budget that best fits your needs. Starting out we’d recommend either a Weekly or Monthly budget. You can base when the budget resets around your payday or simply the start of the month. We’d also recommend not enabling the Rollover option at the beginning. By not selecting that option you can really see how well you’re staying under your budget month after month.

To be successful, it’s important to be realistic when determining how much to set your budgets. Start off by setting the budget to about 90% of what you normally spend each month. This way you won’t feel as pressured to cut back dramatically but it’ll still be noticeable in the amount you save.

Monitoring your budgets and being cognizant about your spending:

Now that you’ve set up budgets for your various spending categories it’s time to keep an eye on them and to be mindful of how you’re spending your money. After you’ve reined in your spending by staying under budget you can challenge yourself even further by reducing the budgeted amount even further, or by cutting out spending to some categories entirely.

What to do with all the extra money you’re saving?

Since you’ve got some extra money each month that you didn’t have before, this is a great excuse to pay more toward any existing debts or to save it away for a rainy day fund or retirement. We’d recommend first paying off any credit card or other small debts first using our Debt Snowball tool to manage your debt.

We're happy to announce the launch of our ClearCheckbook Affiliate Program today. This program rewards you with 10% of the premium membership upgrade price for any user you get to join ClearCheckbook.

When you become an affiliate, you will receive a unique URL that you can send out. Once a user registers after clicking on your link and then upgrades to ClearCheckbook Premium, you'll be eligible for 10% of their upgrade and all subsequent renewals. We provide you with a dedicated affiliate dashboard where you can track all of the users who have signed up through your Affiliate URL.

In order to be paid out, a user you've brought to the site and who has upgraded must have let the membership go through one cycle. This means if they sign up for a monthly membership, you will need to wait one month before that membership counts toward your account. All payments will be made by either a mailed check (US residents only) or via Paypal.

This has been in use by a few users in the past but it's something that we wanted to make available to everyone. If you have any questions about the ClearCheckbook Affiliate Program, please let us know!

For more information and to sign up, please check out our ClearCheckbook Affiliate Program page.

The completely overhauled and revamped ClearCheckbook app for Android has been finished, tested and is now available for download on the Google Play store!

New features in the updated app include:

• Completely updated Material Design UI
• basic offline functionality
• auto-complete when adding transactions
• transaction register filtering
• addition of grouped, combo and income percent budgets
• improved support for currency formatting
• faster load times
• better crash prevention

The new app should be much faster to use and also fixes a lot of bugs and addresses a lot of feedback we received from you. You should be able to update the app through the Google Play store soon, if it isn't already available.

We were able to catch and fix a lot of issues in our internal testing and beta testing, but if you experience any other issues please let us know and we'll work on getting it quickly resolved. We'd also like to point out that we'll be adding an "All Transactions" register view to the app shortly, since it's currently not available on the app.

We'd also like to give a special thanks and shout-out to the developer of the new app, Russell Stewart, for his speediness and professionalism through the entire development process. If you're in need of getting an Android app developed, please consider Russell. You can contact him through the following outlets: LinkedIn, StackOverflow or Facebook.

The start of a new year always brings a renewed interest in keeping your finances under control. At ClearCheckbook we want to make this as easy for you as possible. To help make our Jiving (balancing / reconciling) process much easier to understand for beginners, we made a dedicated tutorial page that has a video tutorial as well as a guided written walkthrough and some troubleshooting FAQ's. This tutorial can be found here: https://www.clearcheckbook.com/help/jive

This time of year can also lead to some headaches when it comes to adding transactions. When you're adding a transaction, be very aware of which year you're adding it for. If you add some transactions for early 2017 and then go back to add some from December 2016, make sure the year is switched to 2016. Also, the opposite is true. If you're adding transactions from late last year and then want to add a transaction for January 2017, make sure the year is correct. If it's not correct, the transaction will be added as January 2016 and you won't see it at the top of your transaction list (since it'll be with all of the year old transactions).

2016 saw a lot of behind-the-scenes work plus some new features and a revamped iOS app. Plans for 2017 include a new Android app as well as a lot of enhancements to ClearCheckbook as a whole.

We've been very pleased with the continued growth of the site. You can help us even more though by spreading the word of ClearCheckbook to any friends or family members who might be looking to get a better grasp on their finances for the new year.

Thanks and happy new year!

- The ClearCheckbook Team

At ClearCheckbook, we strongly believe in the importance of financial literacy and having a good grasp on where your money is going. Student loan debt now tops $1 trillion (averaging over $24,000 per graduate) and is higher than both auto loans and credit card debt. Student loans also have the highest 90+ day delinquency rate out of mortgages, auto loans and credit card debt.

With that in mind, we want to do what we can to help university students have firm control of their finances before graduating. To play our part, we're offering a free year of ClearCheckbook Premium to anyone with a valid .edu email address.

When you register for ClearCheckbook and use a .edu email address, we'll include a confirmation link in your Welcome email. Simply click on that link to activate your premium upgrade. If you're already a member with a .edu email address, you'll see an alert on the Dashboard with a link to send a confirmation email. This free upgrade has no strings attached and no billing information is required.

The only reason for the email link confirmation is to ensure the email address is valid. Per our privacy policy, we won't send you any offers or sell off your email address. We just need to make sure you're actually the owner of the .edu email address.

I started ClearCheckbook when I was in college because I needed a way to manage my own finances. Living on your own and going to school plus all the responsibilities that comes with it can be hard to adjust to at first, but setting budgets and controlling your spending is a great way to set yourself up with a good financial foundation.