How to save money: A step-by-step guide for millennials

Once you sign up and are approved, download the Credit Karma app to help you manage your credit. It’s a free app that gives you access to your …

Put down the latte and listen up: If you’re like the millions of Americans living paycheck to paycheck, saving money needs to be on the top of your to-do list. Like, stat.

Understanding personal finance can be intimidating. You know how much money you make and you’re trying to save a little bit here and there, but the reality of mounting student loan bills and other living expenses can weigh heavily on millennials — which is why it’s difficult to think of the bigger picture.

Listen: a personal finance app (or two or three) can be your best friend in terms of getting smarter about how you save — and spend — your money. (We recommending starting with YNAB, but more on that later.)

Believe it or not, about 66% of people between the ages of 21 and 32 have nothing saved for retirement, according to a survey by the National Institute on Retirement Security. It’s no wonder that millennials are finding it difficult to buy a house.

Although retirement is still a very long way off for this generation, it’s important to be mindful of the future so you can find a clear path towards financial freedom for the end of your career, a vacation, or even an unexpected expense or accident.

The basics of personal finance and savings might be lost on some people who feel that it’s near-impossible to save when most of their money is gone within days of getting a paycheck. The cycle begins again and you just feel stuck trying to keep your head above water. However, financial freedom is very reachable through careful money management, budgeting, expense tracking, and getting smart about saving, investing, and building credit.

The good news is that it’s never too late — or too early — to get smarter about your finances. After all, the tools you need to help you along your financial journey just might be in your pocket.

Here’s a step-by-step guide to saving money by using smartphone finance apps and other clever hacks:

1. Create a budget

Knowing how much money you make is not the same as spending it wisely.

Staying organized is key to your financial freedom and budgeting apps like Mint and YNAB can help you create a budget and stay within your means every month. Mint is a free app (that’s a very important word) that you can customize and tweak to fit your income and help you set your financial goals down to the penny.

If you’re still unclear on how much you should save every month, Mint can also set your budget based on your income. It can create limits and categories on your spending habits, which you can override at anytime, while the app can connect you to your bank accounts, credit cards, and lenders to give you a full picture of your finances.

Meanwhile, YNAB, which stands for You Need a Budget, takes your monthly spending and expenses to the next level with an in-depth look at every dollar in your bank account. In fact, one of the rules for YNAB is every dollar needs a purpose, so you know it’s serious about budgets and making sure you stay on track instead of “winging it” from month-to-month.

With YNAB, you define what’s important to you and how to achieve your goals with good financial spending and saving. The app keeps you on track to use your money on the important things in life like rent, food, medical expenses, and more. It can even account for any unexpected expenses and emergencies without putting a strain on the other things going on in your life.

YNAB has a 34-day free trial available, but afterwards it’s $6.99/a month.

2. Track your spending and expenses

Now that you have a realistic and workable budget, you have to stick to it. Smartphone apps like Quicken can take your path to financial freedom to the next level. Quicken can track all of your spending habits by just taking a photo of your receipts, which automatically puts your spending into categories, dates everything, and tracks the amounts deducted from your balance with your approval.

In fact, Quicken is probably the most in-depth of all the financial apps on this list because it’s so feature rich. The app can track and record your expenses and investments, create easy-to-read spending reports, and can pay your bills online. Once you sync the app to your bank account, you can even transfer funds from one account to another with the desktop version of the app. It can even predict and forecast your cashflow for the upcoming month, so you can get a better idea of all of your finances.

One of the best things about the app is that it’s completely searchable. You can search through all of your spending habits, expenses, and reports to get easy access of your personal finances. The Quicken app is also easy to understand and use with a very intuitive interface that even works offline when you don’t have a data connection.

In addition, the app sends you notifications and alerts when your bank balance is getting low and if you’re over-budget for the month, so you don’t over spend. Think of the Quicken app as your personal accountant inside of your pocket that you don’t have to feed or clothe.

The Quicken app works with Android and iOS mobile devices and it’s free with the purchase of any Quicken product.


3. Manage your debt

According to ValuePenguin, over 44 million millennials are in crippling debt upwards of $33,000 — mostly from student loans from financial institutions. In fact, most millennials are putting off “life milestones” like starting a family and homeownership because their massive debt is in the way, while some are forced to move back home with their parents just to stay above water. Getting out of debt is not an easy feat, but if you have the right tools and a little bit of optimism, you could be debt-free sooner than you think.

Smartphone apps like Debt Payoff Planner can help ease your burden with a bird’s eye view of how much money you owe, along with reasonable step-by-step methods and techniques to get out of debt faster. The app can track your debt payments and give you a time frame to financial freedom. This means you can track your progress and feel better about your money situation with a real game plan. The best part about this app is that it’s completely free.

Another good idea? Transfer your debt to a credit card with a 0% APR introductory period and get aggressive with those payments. That way, you won’t be paying any interest and you can pay down the debt faster than if you were just making the minimum payment every month.

The BankAmericard® credit card by Bank of America offers a 0% introductory APR period on both balance transfers and purchases for 18 billing cycles, after which a variable 15.24% to 25.24% APR will apply based on your creditworthiness. The BankAmericard® credit card has a $10 or 3% (whichever is greater) transfer fee and no annual fee.

4. Get smart about saving money

“A penny saved is a penny earned.” This phrase is commonly attributed to Benjamin Franklin, who is believe to have *coined* it during the 18th century. If Mr. Franklin were around today, he’d probably enjoy using a smartphone app like Qapital (pronounced Capital), a fun way to save money by turning it into a game.

Once you download the app, start an account with Qapital and link a bank card with a checking account and begin to set your financial goals. Why are you saving money? Maybe you’re planning a trip to Paris, or want concert tickets for the summer, or are looking to buy a car. After you set your goals, add the amount you want to save.

Say you want to save $1,200 for a new laptop. Now that you’re all set, you can set up the “rule” for saving. Qapital sets “round to the nearest dollar” as the default, but you can pick and choose how you want to save. If you picked the default, every time you use your bank card, the app rounds the amount to the nearest dollar and adds it to your account automatically. So if you buy something for $5.62, Qapital will take .38 cents from your bank card and add it to your account. You can then transfer your savings into a bank account to start all over again. So you’re saving money without even realizing it.

The app has other “rules” like the “Spend Less Rule,” where you can save the difference if you spend less on one of your favorite expenses and activities, or the “Guilty Pleasure Rule,” where you save money when you do one of your guilty pleasures. You set the goals and the rules, and Qapital helps you save.

Qapital is available for iOS and Android.

5. Start investing — like right now

Now that you’ve managed to save some money, maybe it’s time to invest it and gain some personal capital. If you know next to nothing about investing, Robinhood is a good place to start. This smartphone app gives anyone free access to the stock market.

For years, buying and trading stocks were only for the wealthy and people in the know. You had to hire a stockbroker who would have to facilitate any purchases and trades on your behalf, while also taking a slice of the pie as commission.

However, Robinhood is a completely free way to enter and get 24/7 access to the stock market game with zero fees and commissions. In addition, Robinhood supports cryptocurrency like Bitcoin, Etherium, Dogecoin, and more. Crypto is supported in 30 states for now, while the app plans to gain support in more locations across the nation. This finance app is a great way to build a solid stock portfolio and net worth, while gaining confidence in investing and using cryptocurrency.

Robinhood is available for iOS and Android.

6. Build your credit

Did you know only 33% of adults ages 18 and 29 have at least one credit card? About two-thirds of millennials don’t have a credit card, according to this survey, and are shy about the proposition of adding more debt on top of their student loan debt.

If you’re afraid of getting deeper into the weeds but you want to build credit, you have to get a credit card to make your credit score soar. (We recommend Credit Cards Explained for more info on this topic.) Once you sign up and are approved, download the Credit Karma app to help you manage your credit. It’s a free app that gives you access to your credit score and credit report, while it can also offer credit monitoring.

Credit Karma can also give you information on how to improve your score, including what factors are contributing to good and bad scores, and what kind of products and services can help you achieve exceptional credit.

Credit Karma is available for iOS and Android.

7. Find a financial coach

Everyone needs some coaching to get them through hard times. Breaking through to financial freedom and happiness could be just an app download away with Joy, a financial coaching and savings app for iPhone.

Once you create an account, you’re asked to sync your checking account so you can rate your purchases and transactions. If spending money on an item makes you happy, it’s a high value purchase. If it makes you sad, it’s a low value transaction. (It’s basically like the KonMari method of finance.) Joy then tries to make connections between your mood and outlook and how that relates to your spending, which should prompt you to save more money. In fact, Joy is also a bank of sorts because you can open a Joy savings account that’s FDIC (Federal Deposit Insurance Corporation) insured.

In addition, Joy offers savings strategies by tracking your spending, as well as money coaching to help you reach your financial goals — along with a steady stream of articles about finance, happiness, and self care.

Sorry Android users, Joy is only available for iPhone.

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Best Credit Card Debt Payoff Calculator

Capital One Credit lines are a great partner of Credit Karma, and can provide tools to benefit your current credit score. We recommend that you utilize …

A good way to make sure that you stay out of debt on your existing credit cards is to make use of an online debt repayment calculator such as Credit Karma. The site calculates how long it will take for you to pay down all of your credit card debt. You enter information into the provided fields. These are titled “balance owed,” “interest rate,” “expected monthly payment,” and “desired payoff time-frame.” The credit card debt calculator will take these financial considerations into account and provide you with a plan for paying off your debt. The debt calculator will help make your existing debt more manageable, or allow you to plan for future credit card expenses.

Refinancing Your Credit Cards

One option to help improve your current credit score is to refinance your cards to have a lower annual fee. Additionally, lowering your total credit spending limit will help lower your monthly payments. These financial tactics can help you build your credit score for future business ventures. Capital One Credit lines are a great partner of Credit Karma, and can provide tools to benefit your current credit score. We recommend that you utilize the credit card debt payoff calculator in 2019 to manage or improve your current financial situation.

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What Factors into a Credit Score?

First, let’s discuss the differences between different credit scores. A credit score can range from around 300 to 850 points. A score of 700 and higher is considered a good credit score and will generally allow you to obtain loans without being denied. Obtaining a high credit score can also help to lower interest rates. An online credit card debt payoff calculator will give you financial recommendations to help you achieve a higher credit score. These suggestions may relate to changes in your credit limitations and other account relevant variables.

Where To Find Credit Card Debt Calculators?

You can obtain your credit score from Equifax, TransUnion, and right here on Credit Karma. The sign up process is quick to complete and will not result in any changes against your credit.

Credit Karma also offers a Credit Score Stimulator – This online tool will help determine what would happen if you opened a new credit card, or how large expenses would affect your credit score.

Credit Karma Features:

  • Direct Dispute – If you see any errors on your existing credit report, you can dispute it directly through the Credit Karma platform.
  • Approval Odds – Credit Karma will estimate the likelihood of the approval of any new loans or credit cards.
  • Credit Monitoring – Credit Karma can assist in the monitoring of your current credit-related status.
  • Credit Karma will alert you if any significant changes are made to your credit report, this includes any potential fraudulent activity.
  • Credit Karma offers an easy to use mobile app to pull reports in real time.
  • Credit Karma will generate recommendations for credit cards or loans that could help save you money compared to your current credit payments.

How Can You Improve Your Credit Health?

  • Pay your bills on time – Late or missed payments can significantly affect your credit score.
  • Never close old credit cards – This can lower your credit score significantly
  • Pay down debts – Keeping your overall credit card utilization amount below 30% will leave you in good shape.
  • Don’t open too many credit cards at once – Having too much credit can go against your credit score.
  • Diversify your credit mix – Lenders like to see a mix of existing credit.

VantageScore:

Many Americans complain about the lack of scoring consistency they receive for their credit scores. All three of the credit bureaus have designed a model called “VantageScore” in order to obtain a more consistent standard of credit scoring across the board. When you use a credit card debt payoff calculator you’ll be able to see how to get debt better managed and financed.

A VantageScore has three scoring models. They calculate your scores based on:

FEATURED STORIES
  1. Your payment history – They will look at the consistency of payments made and look for any late payments in your history. They will look to see how many lines of credit you have open and have had open in the past.
  2. How long you’ve had credit – They will look at the duration of the lines of credit you currently have open.
  3. Which types of credit lines you have – The different types of credit lines can be anything from home loans, auto loans, student loans, refinances, home improvement loans, etc.
  4. Current credit limits – The limit of credit on your credit cards, which is contingent upon several factors including your credit score.
  5. The amount of debt – The amounts owed for purchases. This is often coined “debt-to-income” ratio, or how much money are you bringing in (gross annual income) compared to how much you owe in debt.
  6. Any hard inquiries on your credit report – This is the act of “pulling” credit when you visit a lender. This is particularly scrutinized when applying for an auto or home loan.

When to Consider a Balance Transfer?

A balance transfer is taking existing debt and placing it into a different credit card account. There are certain scenarios where doing this may prove to be more cost effective in the long run. If you have debt with a high interest rate – If your current credit card is charging a high interest rate – it may be beneficial to search for one that offers a lower one.

You don’t want to deal with multiple payments every month, so consolidating debt into one credit card account will give you fewer credit card balances to keep track of and help you keep your finances better organized. You are often offered a great promotional offer on a balance transfer. If you are able to pay off your existing debt faster through the new offer, it could be of benefit to take advantage of the refinancing.

Credit Karma is a great option if you’re looking for a reliable and effective credit card debt payoff calculator.The recommendations provided by the debt calculators will help customers make the most of their credit situation. The site is designed to be completely secure in terms of using your financial information, and is highly accessible across your electronic devices. Additionally, the site provides an abundance of finance related reading to help you better understand how your money can start working for you. The resources and calculators provided by Credit Karma are valuable tools that everyone can benefit from.

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INSIKT Changes Name to Aura

SAN FRANCISCO–(BUSINESS WIRE)–Feb 12, 2019–INSIKT, a mission-driven financial technology company that offers affordable loans to …

SAN FRANCISCO–(BUSINESS WIRE)–Feb 12, 2019–INSIKT, a mission-driven financial technology company that offers affordable loans to hard-working families, today announced that it has changed its name to Aura to expand its focus on creating greater financial health, independence and economic stability for millions in America.

“Today, I am excited to share that INSIKT has undergone an extraordinary transformation that starts with a bold new name,” said James Gutierrez, CEO and Founder of Aura. “Aura, like your credit score, may seem invisible, but it matters a lot. Today, we commit to making the seemingly invisible role of credit, approachable, visible, clear, transparent, easy to understand and fair for all. Most financial institutions see borrowers as a number, a risk, a reflection of the past. This says nothing about a borrowers’ potential and where they can go. The difference for us — we see their Aura, not just their credit score. We see them, their potential, and their dreams.”

Since its launch in 2014, INSIKT has provided more than $390 million in affordable, credit-building loans to 320,000 borrowers at over 1,200 partner locations using technology that enables local businesses to administer credit applications.

Now, Aura will build on this success by adding a new consumer product experience that will further empower borrowers and put them on the road to financial security. Recognizing that most of its customers do not know what their credit score is or how much they should save on each paycheck, Aura will provide its borrowers with free credit scores, a summary of what’s in their credit report, and a personalized budget, including expenses, DTI and tips for savings.

Additionally, Aura is launching a new customer loyalty program, known as “Aura Hearts” that offers benefits to borrowers who pay on time such as larger future loans, lower rates, and faster pre-approvals.

“We have worked to ensure Aura makes managing debt a launch-point for personal independence,” said Gutierrez. “We want everyone to see and understand their financial history, reduce fear around personal finance in the communities we serve, and increase borrowers’ ability to navigate the financial system. Aura is here to make sure that borrowers have a true partner on their financial journey.”

Aura’s new website is located at www.myaura.com.

About Aura:

Aura is a technology-powered, Community Development Financial Institution (CDFI) that provides small, affordable loans to working families in America. Aura’s mission is to build financially healthy low-income communities by providing empowering financial services to America’s 66-million underbanked and unbanked. Aura has pioneered a cloud-based lending technology that enables trusted local businesses to submit credit applications for centralized review and approval by its proprietary scoring algorithms.

Currently available in nearly 1,200 locations across California, Texas, Illinois and Arizona, Aura has provided hundreds of thousands of credit-building, responsible loans to low-income households since launching in 2014. Aura was founded in 2012 by James Gutierrez, Kevin Kang, and Randy Wong. All three founders helped create and scale Oportun, a CDFI and one of Time Magazine’s Top 50 Most Genius Companies in 2018.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190212005204/en/

Scott Gerber | 408.202.4255 |scott@vrge.us

KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA

INDUSTRY KEYWORD: OTHER CONSUMER TECHNOLOGY DATA MANAGEMENT INTERNET SOFTWARE PROFESSIONAL SERVICES BANKING FINANCE CONSUMER

SOURCE: Aura

Copyright Business Wire 2019.

PUB: 02/12/2019 06:00 AM/DISC: 02/12/2019 06:01 AM

http://www.businesswire.com/news/home/20190212005204/en

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Pritzker appoints taskforces to look at pension fund consolidation, state asset transfers

… of the Chicago Board Options Exchange (now known as CBOE Global Markets); Pat Devaney, President of the Associated Fire Fighters of Illinois; …

Governor JB Pritzker today appointed leaders of two new taskforces created to make several specific recommendations to improve the standing of the state’s pensions funds.

“The enormity of Illinois’ pension problems at all levels of government cannot be overstated, and these two taskforces will provide concrete recommendations on two ideas that will improve the health of pension funds around the state: potential consolidation of funds to achieve the highest investment returns and transferring valuable state-owned assets to the pension funds to help address our nearly $134 billion in unfunded liabilities,” said Deputy Governor Dan Hynes, who will receive the recommendations. “Illinois has a long way to go to dig out of the fiscal mess we inherited, but with discipline and focus, we can take commonsense steps that will make life better for the hardworking people of this state and restore fiscal stability.”

Pension Consolidation Feasibility Taskforce

The state is home to 671 separate public pension funds, which each make decisions impacting their respective members. This results in a fractured system that often duplicates functions across pension funds, and that limits the smaller funds to a narrow range of potential investments. Smaller funds also pay higher fees because the amount in their funds is too low to meet institutional investor thresholds.

In total, these funds manage $170 billion in assets and have accrued liabilities totaling more than $355 billion. Of all those funds, 656 are suburban and downstate police and fire pension funds that are regulated by the Illinois Pension Code.

These liabilities have placed increased pressure on local governments and the State of Illinois, driving up property taxes and crowding out funding for critical public services. Consolidation could provide improved returns on investment, and increased efficiencies on investment and administrative fees; thereby increasing assets to pay for obligatory public workers’ pensions and alleviating the burden of growing property taxes.

The Pension Consolidation Feasibility Taskforce will be co-chaired by William Brodsky, former Chairman and CEO of the Chicago Board Options Exchange (now known as CBOE Global Markets); Pat Devaney, President of the Associated Fire Fighters of Illinois; and Christine Radogno, former Illinois Senate Minority Leader. The taskforce’s mandate is to explore and make recommendations for consolidation of pension funds, beginning with downstate police and fire funds, as well as evaluating the state’s three pension funds, in order to achieve the greatest value for pensioners and taxpayers.

Pension Asset Value and Transfer Taskforce

Currently, the state’s five pension systems have unfunded liabilities of nearly $134 billion and growing, while the state owns and maintains tens of billions of dollars in real estate and infrastructure assets, according to the Department of Insurance’s biennial pension report. These assets could be used in a way that is far more financially responsible for the state, its pension systems and the taxpayers of Illinois.

The Asset Assessment Taskforce will be co-chaired by Jaqueline Avitia-Guzman and Jamie Star. The taskforce’s mandate is to analyze state assets across Illinois and make recommendations as to their best use to help stabilize the state’s finances. Recommendations could include, but are not limited to, the repurposing or sale of these assets or transfer to state pension systems to improve their levels of funding.

Background

Jaqueline Avitia-Guzman

Jackie Guzman is a finance executive with 20 years of experience leading, creating, and implementing financial and operational strategies for Fortune 500 companies located in the Chicagoland area. Currently, she serves as Head of Corporate Development for Sears Holdings Corporation where she is responsible for M&A, inclusive of joint ventures and divestitures. Prior to Sears Holdings, she was at the University of Chicago, pursuing an MBA, where she interned for two private equity firms in Chicago. Before business school, Jackie worked in the financial services industry. She received her master’s in business administration from the University of Chicago and her bachelor’s in economics from the University of Illinois at Urbana-Champaign School.

William Brodsky

William J. (Bill) Brodsky has been a leader in the Chicago financial community since 1982. He is the Chairman of Cedar Street Asset Management LLC. After serving as Executive Vice President and Chief Operating Office of the Chicago Mercantile Exchange, (CME), he was President and CEO of CME from June 1, 1985 until February 1997 when he became Chairman and CEO of the Chicago Board Options Exchange (now known as CBOE Global Markets). He was in that position until May 2013, when he became Chairman, a position he served until his retirement in March 2017. He is the only exchange executive from Chicago to be elected as Chairman of the World Federation of Exchanges.

For over 20 years, he has served in various board positions at Northwestern Memorial Healthcare, including Chairman of the Investment Committee for 14 years, and later as Chairman of Northwestern Memorial Hospital. Since May 2013, he has been Chairman of Navy Pier, Inc. He is a member of the Commercial Club of Chicago and the Civic Committee. Bill is an attorney and member of the Bar in both New York and Illinois.

Pat Devaney

Pat Devaney is the President of the Associated Fire Fighters of Illinois. Devaney first started his career with the Champaign Fire Department and IAFF Local 1260 in 1995. He served as an elected firefighter pension fund trustee for a decade and has advocated for firefighter pension policies in Springfield for the last fifteen years.

Christine Radogno

Christine Radogno is a former Republican member of the Illinois Senate, representing a Legislative District in Cook, DuPage, and Will Counties from 1997 to 2017. Radogno served as the Minority Leader, the first female leader of a political party in the Illinois Legislature.

Prior to serving in the state senate Radogno served for eight years as a Village Trustee in LaGrange. Radogno received a bachelor’s degree and a master’s in social work from Loyola University in Chicago. She was employed in the field of mental health before entering politics.

Jamie Star

James Star is Chairman of Longview Asset Management LLC, an investment firm that oversees public and private investments on behalf of individuals, trusts, and charitable foundations. In this role and his prior role as President and CEO, Mr. Star has managed portfolios of publicly traded securities and investments in private equity and hedge funds. He has also overseen direct investments in private companies. Prior to this, he ran a top-performing securities partnership. He began his investing career as a securities analyst and portfolio manager at Harris Associates, a leading advisor to mutual funds and private clients.

Mr. Star is a director of Equity Commonwealth, a publicly-traded real estate investment trust that owns commercial office space. He is also a director of Petsmart/Chewy, the nation’s largest on line and traditional retailer of pet products and services, and Teaching Strategies, a provider of educational assessment software and curricula. He is a trustee of several pension funds and a private trust company, and formerly served on the boards of two public mutual fund complexes and multiple private companies. His non-profit work includes service as a member of the Global Advisory Board of the Kellogg Graduate School of Management and as president of the Star Family Foundation, which he founded in 2012.

A lawyer by training, Mr. Star practiced corporate law at Kirkland & Ellis following his clerkship with a federal court judge. He is a graduate of the Kellogg Graduate School of Management at Northwestern University, Yale Law School and Harvard College.

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