Happy Bobby Bonilla Day!

If you struggle to understand how compound interest can help build your retirement savings, you’ll find Bobby Bonilla Day very instructive.

Here on the OppLoans Financial Sense blog, we write a lot about how people can fix their credit scores, build their savings, and generally improve their long-term financial outlook. But sometimes it’s fun to write about—well—the opposite of that: People who luck into ridiculously sweet financial situations where all they have to do is sit back and watch the money roll in.

On that note: Happy Bobby Bonilla Day! It’s by far the world’s #1 niche sports-finance-based holiday, a time to sit back and reflect on the two most incontrovertible truths that govern this vast and mysterious universe of ours: First, that former Major League Baseball star Bobby Bonilla has it made in the shade; second, that the New York Mets are very bad at business.

What is Bobby Bonilla Day?

Bobby Bonilla Day falls on July 1st because that is the day, every year, that the New York Mets pay Bobby Bonilla $1.19 million. If that sounds like it’s a fairly run-of-the-mill arrangement, it helps to note that Bonilla has not played in the MLB since 2001 and hasn’t played for the Mets since 1999.

The first Bobby Bonilla was celebrated in 2011 and the final Bobby Bonilla day will be commemorated in 2035. In that timespan, Bonilla will collect a whopping $29.8 million from the Mets, all for doing absolutely nothing! Sounds like a pretty sweet gig right? So what happened?!

Deferred payments and compound interest.

Bobby Bonilla was a very good baseball player. He played in the Major Leagues from 1986 to 2001, collecting six All-Star appearances and three Silver Sluggers along the way. He even won a World Series ring with the 1997 Florida Marlins. But the following year, he was traded to the Los Angeles Dodgers midseason who then traded him to the New York Mets the following November.

Bonilla had already played with the Mets from 1992 to 1995, but this reunion was not exactly a happy one as Bonilla’s declining play leading to numerous clashes with Mets manager Bobby Valentine. After the 1998 season concluded, the Mets decided to wash their hands of Bonilla entirely and release him from his contract.

There was only one problem: Bonilla was still owed $5.9 million on said contract. Under these circumstances, teams who can’t find a trade partner will simply pay out the rest of the player’s contract in order to get him out of the clubhouse. If the player is eager to leave the franchise as well, their agent can also negotiate a smaller payout in order to facilitate their release.

What Bonilla’s agent did in this case, however, was slightly different. (Okay, okay, it was a lot different.) Bonilla’s agent, Dennis Gilbert, offered to have Bonilla defer payment for a full decade. In return, the Mets would let that $5.9 million accrue interest at a rate of eight percent annually starting in the year 2000. It’s similar to the structure seen in many life insurance contracts—a fact likely owing to Gilbert’s previous work as an insurance agent.

After the decade had passed, Bonilla would then start collecting a portion of the money every year until 2035. If you’ve ever wondered how compounding interest works on your retirement savings, this deal is a great example: That eight percent annual interest rate on Bonilla’s salary turned $5.9 million into $29.8 million overall.

Bonilla took his first payout on July 1st, 2011. Now, every year, July 1st is celebrated as Bobby Bonilla Day by an incredibly esoteric blend of hardcore baseball nerds, finance aficionados, and aggrieved Mets fans (otherwise known as … Mets fans). For reference, the Mets are paying Bonilla over twice as much in 2019 as they are paying rookie Pete Alonso, whose 27 home runs are good for second in the National League.

How did this deal work out for the Mets?

Frankly: not well!

If attaching an eight percent annual interest rate onto the remaining money in Bonilla’s contract seems like a curious decision by Mets owner Fred Wilpon, it helps to understand some of the surrounding contexts.

At the time that they agreed to defer Bonilla’s contract, the Wilpon family was invested in an absolutely superb New York investment fund that was enjoying unheard of annual returns of 12 to 15 percent. So even with that eight percent annual interest rate tacked on, they were still coming out ahead!

Here’s the problem. That fund’s improbable-seeming success was all thanks to one man: Bernie Madoff. Oops! Those returns that the Wilpon’s had been enjoying were actually just funds from new investors being passed off as profits. When Madoff’s multibillion-dollar Ponzi scheme collapsed during the 2008 financial crisis, it took approximately $500 million of the Wilpon family’s money with it.

Here’s the kicker: This is actually the second set of deferred payments that Bonilla has with the Mets. When they traded Bonilla to the Orioles in 1995, the two teams split a $12.5 million payment between them into 25 separate installments. Bonilla received his first payment in 2004 and will receive his last payment in 2028 for a total of $15.3 million.

Be like Bobby.

If you’re debating whether or not you should start contributing to your retirement account, take the lesson of Bobby Bonilla Day to heart. Putting that money aside now and adding some compounding interest to the mix will result in a lot more money down the line. It probably won’t be worth $1.19 million a year, but it’ll still be well worth the wait.

To learn more about the financial side of sports, check out these other posts and articles from OppLoans:

Do you have a  personal finance question you’d like us to answer? Let us know! You can find us on Facebook and Twitter.

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The Broke Person’s Guide to Gift Giving

Don’t let your desire to give awesome, thoughtful gifts to friends and family members drive you into debt—just learn how to give more with less!

You’ve probably heard some version of the 1905 O. Henry story The Gift of the Magi. It tells the tale of a husband and wife who can’t afford gifts for each other, so they each secretly sell off one of their prized possessions.

The wife cuts her hair and sells it to buy her husband a chain for his pocket watch and—in a twist worthy of a Twilight Zone episode directed by M. Night Shyamalan—her husband had sold his watch to afford expensive combs for her hair. Now both of their gifts are useless.

Well, the wife’s hair will grow back eventually and she can just use the combs then. And the husband will still probably look pretty cool with an awesome chain hanging out of his pocket.

Regardless, the moral of the story is that they still have their love, so it doesn’t matter that they can’t use their gifts in an optimal manner. But the real lesson is that they should have read this article! Then they would have known how you can give good gifts within your budget!

Set expectations appropriately.

Don’t be embarrassed to let your friends and family know you’re working on a tight budget. It’s not like they’ll want you taking out an online loan or cash advance just to buy them a present.

If they’re the sorts of people who deserve your generosity, then they’re the sort of people who will be sympathetic to your situation. And if they do have lower expectations, then those expectations are all the more likely to be exceeded. Your gift could even be time spent together.

“This summer, starting now, talk to your friends and family and suggest that you don’t exchange Christmas/holiday gifts this year,” advised Holly Wolf, Director of Customer Engagement for SOLO Laboratories (@SOLO_labs). “While it’s warm outside, it feels planned out, thoughtful, and not just panicked over money.

“My conversations go something like this: ‘I enjoy spending time with you throughout the year.  That’s a real gift to me. So rather than exchanging gifts that we really don’t need, let’s commit to spending more time together this year. Let’s hike more/take more walks/hang together more.  The holidays are busy and stressful enough. Let’s make them easier for both of us by not exchanging.’

“Nearly everyone I’ve suggested this too has agreed not to exchange. Only one person needed a bit more time to come to terms with it.”

Lina Kristjansen, the co-founder of FiveYearFIREescape, offered a similar approach: “One way to deal with the cycle of gift-giving is to break it altogether. If you want to do it without sounding like a Grinch, you could say: ‘This year we’re saving up for a vacation, let’s just get together instead of exchanging gifts!’ Of course, you can replace vacation with your own goal, like paying off debt, creating a rainy day fund, or a purchase you’re actually excited about.

“People will respect your decision when you share the bigger picture behind it, instead of just saying ‘we can’t afford it.’ Besides, your family and friends will probably welcome the chance to break the gift-giving cycle if you give them the alternative.”

But if you still feel the need to give physical gifts, you have many affordable options that won’t require a personal loan or installment loan to cover.

Dissect a gift basket.

If you think about it, a gift basket should really be called a “gifts” basket, since it contains multiple gifts. On that note:

“If you have several friends and family members you’d like to give gifts to but you’re short on funds, you can always buy one large gift basket and then create smaller gifts using the included items,” suggested Beverly Friedmann, content manager for ReviewingThis (@ReviewingThis).

“By purchasing a (neutral) gift basket you may be able to give several people different items at once, and you can include cards with each. This will likely save you a considerable amount of money in comparison to purchasing individual gifts, and your recipients will never be privy to where their present came from.”

Turn downsizing into giftsizing.

Do you have a lot of clutter and have been thinking about Kondo-ing your living space? Well downsizing could also be an opportunity to make progress on your gift list.

“Several years ago, my grandpa started giving away gifts from his past for Christmas in place of new purchases,” recounted Kelly Shea of TrialandEater.com (@TrialandEater) and TheWabiSabiLife.com. “These gifts come with a personalized note about why he is giving each of us this particular item, and a story from his life. These have turned into mementos that we all look forward to.

“This year, as I downsized and moved, I adopted the same gifting philosophy for people’s birthdays. Items that I received from conferences or other travels, kitchen items I might have otherwise given away, a new chocolate bar, books that I have finished reading—if they make me think of a particular family member I gift them and tell them why.

“This intention based way of gifting not only makes my family members feel like I truly thought of them, but it also cuts down on costs and gifting people items that end up as clutter that they don’t need.

“And they don’t have to be fancy to be appreciated—some items I have sent recently include chocolate and snacks, a free pineapple tote bag I would have otherwise gotten rid of, duplicate kitchen items, makeup samples, and a shirt that no longer fit me that I knew would fit my cousin. It’s kind of like an adult care package!”

Consider used items.

“Used” doesn’t have to mean “bad” or “broken down.” Gently used items can still make very nice, and more affordable, gifts.

“If giving something physical is important, visit a thrift store to look for a gently used gift instead of something brand new,” recommended Logan Allec, CPA (@moneydoneright), owner of personal finance website Money Done Right. “Thrift stores are great places to score great deals on treasures, especially if you are short on cash.”

Make something.

Making gifts tends to be much more affordable than purchasing them. Also the people you’re giving them to might grade the gifts on a curve. But we bet they’ll actually love them as well!

“While it may seem cliche or even impossible, if you’re very tight on funds you can always make your own gifts,” advised Friedmann. “If you enjoy art, writing, or making items at home (i.e. plants, jewelry, knitting), you may be able to use your skills to put together gifts that are even more special to your friends and family than store-purchased items.

“One of the best gifts I’ve received was a card in conjunction with a self-learned piano song. The sentiment behind the gift is always the most important part.”

Want a specific, relatively easy to replicate example? Read on!

“Since my wife and I were both from large families, our holiday gift list was always quite long,” offered Timothy G. Wiedman retired professor of Management & Human Resources at Doane University(@DoaneUniversity). “And when I was in graduate school, our finances were stretched pretty thin.

“So several years in a row, for many of our holiday gifts, my wife and I made sheets of ‘hard rock candy’ in various colors (red, green, yellow, and dark gray) and complementary flavors (peppermint, wintergreen, lemon, and licorice).  As I recall, we used a simple stove-top recipe that included Karo syrup and cane sugar (with confectioner’s sugar topping off the finished candy).

“After the basic concoction reached the proper temperature (somewhere around 300 degrees if my memory is accurate), it ‘cooked’ for several minutes before each coloring/flavoring combination was added; and then it was spread (about 3/8 of an inch thick) on cookie sheets that had gotten a thin coating of confectioner’s sugar.

“Then I took the sheets outside to cool and harden by placing them on our ancient picnic table. We lived in central Ohio, so the finished recipe hardened fairly quickly in December. Finally, each hardened sheet of candy was ‘cracked’ into smallish pieces and given a final ‘dusting’ of confectioner’s sugar.”

Now take this advice and use it in your gift-giving endeavors. There shall be no twist endings for you!

Being generous is awesome, but so is staying within your budget. There are no gifts good enough to to justify taking out a short-term bad credit loan or no credit check loan (like a payday loan or title loan to pay for them. To learn more about stretching your budget further, check out these related posts and articles from OppLoans:

Do you have a  personal finance question you’d like us to answer? Let us know! You can find us on Facebook and Twitter.

Visit OppLoans on YouTube | Facebook | Twitter | LinkedIN | Instagram


Logan Allec (@moneydoneright) is a CPA and owner of the personal finance website Money Done Right.  After spending his twenties grinding it out in the corporate world and paying off over $35,000 in student loans, he dropped everything and launched Money Done Right in 2017.  His mission is to help everybody—from college students to retirees—make, save, and invest more money.  Logan resides in the Los Angeles area with his wife Caroline.
Beverly Friedmann works as a Content Manager for the consumer website ReviewingThis (@ReviewingThis)—with a background in Sales and Marketing Management—and is from New York, NY.
Lina Kristjansen is the co-founder of FiveYearFIREescape where she blogs about her family’s early retirement. She quit working at 31 with kids and a house in a pricey city. Her husband retired one year after her, too. She got there through saving, financial savviness, and rental houses.
Kelly Shea is a former financial analyst turned writer and photographer who has a passion for wellness and vegetarian food. She loves sharing her recipe creations and her latest foodie adventures from her travels across the country on her food and travel blog at TrialandEater.com (@TrialandEater), along with wellness and alternative lifestyle topics at TheWabiSabiLife.com.
After 13 years as a successful operations manager working at two different ‘Fortune 1000’ companies, Dr. Timothy G. Wiedman spent the next 28 years in academia teaching college courses in business, management, human resources, and retirement planning.  Dr. Wiedman recently took an early retirement from Doane University (@DoaneUniversity), is a member of the Human Resources Group of West Michigan and continues to do annual volunteer work for the SHRM Foundation. He holds two graduate degrees in business and has completed multiple professional certifications.
Holly Wolf is an executive with over 30 years of experience in banking and healthcare.

How to Save Money Every Week

You aren’t going to save all the money you need at once. You need to do it gradually—and these expert tips will help you save on a weekly basis.

Building up an emergency fund is a great way to protect yourself during financial emergencies. Otherwise, you could end up relying on short-term bad credit loans and no credit check loans (like payday loans, cash advances, or title loans) to bridge your financial gaps.

Saving money can be hard—especially when you’re first getting started. But the more regular habits you build, the easier it will be! That’s why we reached out to a whole bevy of experts to ask how folks can start saving a little bit of money every week. Here’s what they had to say!

Pay yourself first.

Ben Watson, CPA, virtual CFO of DollarSprout.com (@DollarSprout) and founder of Fiscal Fluency:

“Set up an auto-draft from your paycheck and put money into a separate account reserved for savings. Just like many people do with their 401(k), split your paycheck into different bank accounts so that it limits the amount you can spend.”

Use cash.

Kristen, founder of Mom Managing Chaos:

“Studies have shown that it is harder for you to part with cash than it is to hand over your debit/ credit card. The added bonus here is that once the cash is out, it’s out. No overspending.”

Get rid of unused subscriptions.

Kinika Armstrong (@essenceoffinance), financial coach and founder of Essence of Finance:

“Beware of subscriptions that you do not use. Subscriptions that are automatically charged to your debit or credit card can add up, especially the ones that we hardly use anymore.”

Go public.

Joy Hearn, founder of Cards and Clips:

“Instead of driving around town to get everywhere utilize public transportation to get to those non-urgent places. $30 for a monthly transit pass versus $30 a week in your car is a huge difference maker.”

Top and bottom shelves.

Kristen, Mom Managing Chaos:

Top and bottom shelves at the grocery store tend to have the cheapest products. Did you know that the middle shelves are where grocery stores stock the more expensive items? Check the top and bottom shelves for the best prices.

Earn supplemental income.

Andrea Woroch (@AndreaWoroch), consumer-finance expert:

“Spending less is definitely a must for people trying to save money weekly, but just as important is making a bit more money. Luckily, today there are tons of flexible, fun ways to go about supplementing your income. For example, one way to get away from stressors and maintain some freedom is by spending quality time with fun-loving pets.

“Apps like Rover.com can connect you with good paying dog-sitting and dog-walking opportunities in your area. Sitters are able to choose their own rates and have the flexibility of scheduling work around their availability. Rover sitters/walkers can easily find a gig daily and earn well over $1,000 per month. That kind of cash influx goes a long way when trying to save.”

Eat at home.

Shelley Meche’tte (@ShelleyMechette), Certified Life Purpose Coach:

“We all do it. Grab a coffee and a donut on the road.  Decide to eat fast food for lunch because we didn’t take time to pack a lunch.  Or grab dinner on the way home because it’s easier. Statistics show that Americans spend on average about $100 per month on fast food.  That’s $1,200 per year! Imagine what could be done with that $1,200.

“For one week, keep a strict log of how much you spend on outside food.  At the end of that week, take a look at how much you spent each day and where you spent most of that money.  If most of it came simply from coffee, make a commitment to your financial success that you will limit your outside coffee intake to three days a week.  Take the money that you would have spent for the other days and place that into your savings.

“If your money was spent mainly on picking up dinner after work, decide that you will limit that by doing meal prepping a few days a week.  With just a few minor adjustments, you will be on your way to better financial security … and possibly, even a better eating plan.”

Make your savings hard to reach:

Kinika Armstrong:

“Put your savings in an account that you do not have immediate access. A bank account without a card, where you have to go in branch to withdraw. The more work we have to do to access our savings, the less likely we are to burn through it.”

Go generic.

Kristen, Mom Managing Chaos:

“Buy generic and skip the name brands. Did you know most name brands and generics are made in the same factory? Buying generics is a crazy easy way to save yourself some money without expending a lot of extra effort.”

Imagine you’re living life in the 50s.

Phoebe Howlett, founder of The Chance of Choice:

“Simply put, people in the 1950s didn’t have food on the go and easily within reach. Coffee, lunches, snacks to go, it wasn’t a thing.

“If you wanted lunch and snacks you brought the food to work with you, if you wanted a hot drink you waited until you got to work. The millennial age of convenience everywhere has made it so tempting not to save. But taking on this concept is one of the easiest areas to save money. Make your own lunches, whatever the evening meal is, make slightly more or get a loaf of bread, meat, and salad to make a sandwich. My lunches worked out to cost me on average, one dollar during the week, rather than $10-12 dollars it would cost for a drink and food on the go.

“Mid-afternoon will strike and you may be hungry. Try your best to pre-empt that you’ll probably be hungry at around four pm when you do your groceries and buy whatever you would normally go out and snack on. Live like they did in the 50s rather than in the age of convenience and you’ll save money.

“I actually did this and noted down the savings. I was a culprit for taking convenience food up on its alluring offer while I was at work. I was amazed at the results.”

Get organized.

Kristen, Mom Managing Chaos:

“The better organized you are, the better handle you have on what’s in your house, what you are spending your money on, and where things are getting off track. Yeah, getting and staying organized requires effort, but you can save yourself a lot of money and heartache if you stick with it.”

Eat your groceries.

Kinika Armstrong:

“We are all guilty of buying groceries, and the right after that going to eat out because we have now lost the energy to cook after all that grocery shopping!”

Use the three-day rule for purchases.

Kristen, Mom Managing Chaos:

“Have a limit for big expenditures. If it’s over that certain dollar amount and if it’s not a need (food, shelter, etc) then wait for three days before deciding to purchase. Many times, when you aren’t at the store looking at it, and once you’ve come home and had time to think about it, you’ll realize you don’t really need it after all.

Create a budget and savings goal.

Ben Watson:

“Prior to each month, create a budget or spending plan for your finances so that each dollar is assigned a purpose before you receive it. By following this plan, you’ll help keep money from slipping through your fingers and going to places you didn’t intend it to. Break the budget out into weeks so that a portion of each week’s income is put into savings.”

Cut the cord.

Joy Hearn

“Instead of paying high monthly fees for cable and satellite television, take advantage of streaming devices such as NetFlix, DirectTv Now, Sling, and PlayStation Vue. Users save as much as 50 percent on their home entertainment.”

Buy in bulk.

Kristen, Mom Managing Chaos:

“Buy in bulk. You can often get a much better deal per unit if you buy a lot at once. Great items to buy in bulk are diapers, toilet paper, feminine hygiene products, and meat.”

Give yourself an allowance.

Kinika Armstrong:

“Yes, just like when you were a kid. Allow yourself a certain amount to spend each week and stick to it. This will help you feel less restricted, as you still have money to spend while also achieving your goals.

Keep the change.

Shelley Meche’tte:

“One of the simplest ways to save money on a weekly (or even daily) basis is to ‘keep the change’ that you receive when breaking a bill instead of spending it.  Take that change and place it into a large empty bottle. You will be amazed at how much small amounts of change adds up. Depending on how often you break a bill, you could save several bucks a week.

“Simply dropping fifty cents per day in your change bottle will give you $3.50 by the end of the week. This may not seem like much, but without doing anything extra … if you simply allow this to multiply, you will have saved $182.00 by the end of the year.”

Open an automatic savings account online.

Joy Hearn:

“Online accounts limit access to funds making it easier for the individual to save money. Open an account with zero monthly fees and start off with an automatic transfer as low as $25. It adds up fast.”

Cook more vegetarian meals.

Kristen, Mom Managing Chaos:

“Meat is definitely one area in your grocery budget where you tend to spend more. Consider incorporating a few vegetarian meals into your weekly meal plan!”

Set a limit on when to stop spending.

Kinika Armstrong:

“This can be $50. Once you get to $50, you are no longer going to spend. The following week do not go past $100 and so on. If you do this every week at the end of the month, you should have saved $200.”

Put your savings to work.

Andrea Woroch:

“Every time you successfully score a deal, put your savings to work. Whether you save with a coupon or by comparing prices, move those extra funds into your savings at the end of the week. And always get in the habit of shopping savvy to stretch your dollars so you have more to apply to your savings goals.

“For instance, always look for coupon codes via sites like CouponCause.com which offer over 50,000 online deals to over 11,000 popular retailers like Macy’s, Kohl’s, and JCPenney for free shipping and money off your order.

“Also, compare prices using free shopping apps such as Flipp to review store circulars and deals all from your phone so you always know who has the best offers on the items you need/want to buy so you don’t waste time driving around town.”

Partner up.

Kristen, Mom Managing Chaos:

“Get an accountability partner. Having an accountability partner can help you stay on track and steer you away from bad decisions.”

Fall back.

Joy Hearn:

“Having a social life is great, but if you’re not careful it will cost you. You don’t have to go to every event you’re invited to, especially if it involves spending money you did not plan to spend.”

Be consistent.

Kinika Armstrong:

“Finally, be consistent!  Think about the long term benefits. Nothing beats consistency and a week of saving will inspire you to save for a month, and then two months and so on. The joy of seeing your savings account grow will be an inspiration to continue on.”

The more savings you have, the less likely you are to need to rely on a personal loaninstallment loan, or online loan in a time of financial need. To learn more about saving money, check out these related posts and articles from OppLoans:

Do you have a  personal finance question you’d like us to answer? Let us know! You can find us on Facebook and Twitter.

Visit OppLoans on YouTube | Facebook | Twitter | LinkedIN | Instagram


Kinika Armstrong is the founder and financial coach of Essence of Finance (@essenceoffinance). She is a certified financial education instructor. She is also a law student. After her studies led her to some alarming statistics about the saving habits of millennials, Kinika started fiercely sharing information and tips with her friends and family to help them to improve their circumstances and save for their goals. Through her business, she pursues her passion for helping millennial women manage their money!
Joy Hearn is an extreme saver to who specializes in helping people save money. Her formula is simple: spend less, save more.  In 2017 she created Cards and Clips, a Facebook page that gives weekly tips educating people on how to slash their grocery bill in half by 50 percent or more. Soon afterward she began sharing tips on how to save not only on groceries but on anything. She currently resides in Los Angeles, California.
Five years ago, Phoebe Howlett was diagnosed with illnesses that made her so ill, they said she would never be able to recover to lead a normal life again. However, she completely changed her lifestyle, diet, exercise, and attitude to life—and with these changes came her recovery. She now wants to show that everyone can make the most of their life, creating The Chance of Choice.
Kristen aka Mom Managing Chaos is frugal living and budgeting enthusiast. She lives for spreadsheets and list making. She started Mom Managing Chaos back in early 2018 with a passion for helping others simply and organize their life and finances so they can spend time living, not simply surviving.
Shelley Meche’tte (@ShelleyMechette) is a Certified Life Purpose Coach, Speaker and Women’s Change Agent, dedicated to the empowerment of women through strategized personal and professional development.  She is the author of 70 Days of Happy: Life is BETTER When You Smile and the founder of the organization The PowHERful Woman. Shelley has been featured in Ask Men, Great Work Life, UpJourney and more. She has also been seen on The Chundria Show and The YES! Show.
Ben Watson, CPA is the virtual CFO of DollarSprout.com (@DollarSprout) and founder of Fiscal Fluency, a personal finance and business coaching company. He equips small businesses and entrepreneurs with the skills and accountability to manage their businesses with confidence rather than fear. He’s also the co-creator of the Business Launch Kit—an online course with simple to follow steps of how to create your own business without making a mess.
Andrea Woroch is a nationally-recognized consumer-savings expert, writer, and TV personality who is dedicated to helping Americans find simple ways to spend less and save more without sacrificing their lifestyle. She is a regularly-featured contributor for popular shows like Today, Good Morning America, FOX & Friends, and KTLA Morning News. In print and online, her advice has appeared in popular media such as New York Times, USA Today, Money Magazine, Cosmopolitan, People, Consumer Reports, Reader’s Digest and many, many more. Read more about Andrea at AndreaWoroch.com or follow her on Twitter.

Should You Get Dealer Financing?

If you have bad credit, dealer financing might be your best option for buying a car. But dealer financing is still notorious for inflating your costs.

Since the dawn of time, humankind has wondered: What is dealer financing? The car dealer was trying to sell them on the option after they selected one of those Flintstone cars where you use your feet to move it. (Which begs the question: Why have the car at all?)

Thankfully, car science has come a long way, and we now know what dealer financing is. But is it right for you? In order to explore the ins and outs of these mysteries, we have prepared an article to explain what dealer financing is, whether it’s a good option, and what alternatives exist.

This is that article. Prepare to begin reading it in three, two, one …

What is dealer financing?

The last time you passed by a car dealership, you may have noticed a giant “Buy Here, Pay Now” sign in between two of the wavy inflatable giants. This likely indicates that they offer dealer financing.

On a basic level, this is exactly what it sounds like. It means that you can get financing—namely secured personal loan to buy a car—at the dealership itself. The dealership may lend you the money directly, or it might work with third-party lenders to offer you a deal on the spot.

Much like a mortgage, this auto loan is paid off over time and your car serves as collateral. That means if you don’t pay, you’ll lose the car along with all of the money you’ve paid towards the principal and interest.

Is dealer financing a good choice?

Now you know what dealer financing is. Is it a good option to consider when you’re looking to buy a car?

“It’s an open secret in the automotive world that financing is where a dealership really makes its money,” explained Jake McKenzie, content manager at Auto Accessories Garage (@aagarage). “Some customers may think they just agreed to a great deal on their new car and so they let their guard down. What they fail to realize is that the financing portion of the deal is where car salesman really put their sales tricks into use.

“Most dealerships are staffed with salespeople who are experts in making bad financing options sound good, and in most cases, customers are out the door before they even fully grasp what they’ve signed on for.”

You should be somewhat suspect when it comes to dealer financing. Although they might care less about your credit score, the rates are likely to be much higher than the alternatives. If you are considering dealer financing, take McKenzie’s advice and don’t just accept the offer you’re given. If the dealer is working with an outside financer, then they’ve likely been given a quote known as the “buy rate.”

The dealer may very well be offering you a higher rate than the buy rate so that they can get additional money out of you that you wouldn’t pay if you were working with that lender directly. Ask the dealer what the buy rate is and don’t hesitate to try to negotiate the rates as low as you possibly can.

“Dealer financing is different from standard bank financing in that the dealer does the searching and uses their connections to get you financing,” warned Sean Pour, co-founder of SellMax (@sellmax). “But, typically this will be at a higher rate than if you were to go to your bank directly.”

Dealer financing alternatives.

As you may have realized from reading the previous section, dealer financing is rarely, if ever, going to be the ideal way to buy a car. Some would say it’s not even worth considering as an option.

“As a rule and without exception the best option for buying a new car is paying for it outright,” declared McKenzie. “However, paying in cash is just not realistic for most car buyers, so financing through a third party like a bank or credit union is the next best option. Financing with the dealership shouldn’t even be seen as a last resort, but as something to avoid altogether.”

Of the two experts that we talked to, the other didn’t go quite as far, but still viewed dealer financing as an absolute last resort.

“In terms of better alternatives,” began Pour, “yes, there are better alternatives. After witnessing thousands of deals, the ones who always got the best rate were individuals with good credit, who went directly with a bank they had a relationship with.

“But if your credit is a little shaky, then using the dealer to get your financing might be the only option because they have the know-how and connections to get it done when other conventional banks might say no.

“Other options include getting a co-signer on the loan. If you have a family member or relative who trusts you, if they have good credit, they can essentially promise the bank they will be responsible if you don’t pay and secure you a better interest rate with a conventional bank.”

You could also consider leasing a car until your credit improves, though you also may need a co-signer in that instance as well. Unfortunately, if you don’t have access to good public transportation, a car may be required for work and … everything else. Do your research to make sure you aren’t taken advantage of!

Cars and auto loans can be a real money suck. If you’re not careful, it could even be the thing that knocks your finances out of alignment, leaving you relying on short-term bad credit loans and no credit check loans (like payday loans, cash advances, and title loans) to make ends meet. To learn more about auto-related financial issues, check out these related posts and articles from OppLoans:

Do you have a  personal finance question you’d like us to answer? Let us know! You can find us on Facebook and Twitter.

Visit OppLoans on YouTube | Facebook | Twitter | LinkedIN | Instagram


Jake McKenzie is the Content Manager at Auto Accessories Garage (@aagarage), a fast-growing, family-owned online retailer of automotive parts and accessories. He manages all written content for the website including research guides, product descriptions, and other informative articles. He also enjoys attending the annual SEMA Show, the premier automotive specialty products trade event held every November in Las Vegas. Jake often lends his opinions and expertise to a variety of online blogs, websites, and news sources.
Sean Pour is the co-founder of SellMax (@sellmax), a used car buying company based out of San Diego, California. Sean has over ten years of experience dealing with the purchasing and selling of used vehicles. He graduated with a degree in computer science from San Diego State University.

3 Tips for Managing Money in the Gig Economy

by Jessica Easto
If you’re not budgeting your money properly and building up your savings, you could end up struggling to make it from one paycheck to the next.

As you’ve likely heard, participation in the gig economy—short-term contracts, temp work, freelancing, and the like—is exploding. Recent studies estimate that 25 to 30 percent of all workers have done some form of independent work in the last month.

There is no one type of gig worker—they span all ages, genders, races, and levels of socioeconomic status. Some people rely on gig work because they cannot find full-time traditional employment that pays the bills. Other gig workers don’t want to find traditional, preferring the flexibility and control that gig work provides.

Whatever your reasons for getting into gig work, the challenges it poses cannot be overlooked. Workloads are often unreliable and paychecks may be unsteady, which means proper money management is of the utmost importance.

Due to the work’s inherent unpredictability, gig workers can be vulnerable to risky loan products such as no credit check loans and bad credit loans. These short-term loans are often called payday loans because they are marketed as cash advances on paychecks for when money gets tight at the end of the month—a real concern for many gig workers.

These loans may seem like a “band-aid” option for a gig worker trying to make ends meet while they chase down a paycheck or struggle to scrape together enough paying jobs. But between their sky-high interest rates and hidden fees, these loans can be more like a debt trap recipe—and they are better avoided if at all possible.

How do you avoid short-term, high-interest loans? We’re glad you asked. The trick is stellar money management, and we have a few financial tips specifically designed for gig workers.

1. Define necessities.

Everyone needs a budget—a way to track money in and money out—but it is even more important for folks with fluctuating monthly income, like gig workers. According to Jacob Dayan, CEO and co-founder of Community Tax (@communitytaxllc) and Finance Pal, “the first step to creating a budget based on a fluctuating income is to know what expenses you absolutely need to cover each month.” These are expenses related to things like housing, groceries, bills, and transportation.

Marina Babaian, the founder and CEO of Mbridge Consulting Group—a woman-owned business and consulting firm that provides accounting, payroll, and business management services to start-ups, small, and medium-sized businesses—agrees.

She recommends eliminating all unnecessary expenses, including subscriptions (sorry Netflix!), to make sure you have a really good fix on what you actually need to spend. “A monthly or even weekly budget is needed to understand what your necessities are,” she says. Once those are mapped out, the trick is to spend accordingly.

After your necessary expenses are covered, Dayan suggests working “some savings into your budget as well, no matter how small.” He recommends a technique called the 50/30/20 rule: “50 percent of your income for necessities, 30 percent for discretionary spending, and 20 percent for savings.”

It may seem unnecessary or difficult at first, but building a cushion will help in the future when an unexpected expense or lull in work crops up.

2. Save for taxes.

Don’t forget another key expense: taxes. “When you are self-employed,” explains Dayan, “you don’t have the ‘luxury’ of your taxes being automatically deducted from each paycheck.” You have to pay them all yourself, usually in quarterly installments. Additionally, without the help of an employer paying a portion of your taxes, you’ll be covering the whole burden yourself.

This means you’ll likely owe the IRS and your state more taxes than you are used to. Dayan recommends setting aside a full “25 to 30 percent of your income so that when it comes time to pay your taxes, it’s already taken care of and you won’t have to worry about where the money is coming from.”

Earlier this year, the IRS announced plans to “focus on self-employment tax compliance.” According to an audit they did, the agency found that noncompliance from gig workers contributed $69 billion to the annual tax gap, which is the difference between taxpayers owe and what they actually paid.

Dayan suggests opening a separate bank account that is specifically for your taxes. That way, you won’t accidentally spend the money you need to pay your tax bill and end up owing the IRS even more money in fines. If you save too much, then you’ll have a bit left over to put in savings for that inevitable rainy day.

3. Maintain or build good credit.

“It is essential that while working in temp jobs your credit remains good,” says Babaian. “If times get tough, you’re going to need good credit to give you some flexibility.” Good credit is essential to get the best terms on installment loans, such as auto loans, mortgages, and personal loans.

A 2017 poll by Upwork found that paycheck instability led 63 percent of full-time freelancers to dip into savings at least once per month (compared to only 20 percent of full-time non-freelancers). But what if you’re one of the 51 percent of workers who don’t have much in the way of savings?

You may turn to something like a credit card if you can qualify for one—and that is all well and good if you can keep up with the payments. If not, credit card debt can start impacting your credit score, which will make it even harder in the future to find financial products that you qualify for. Credit card debt, by the way, is at a record high—the average American holds a balance of more than $6,000.

“If you’re struggling to pay off your credit card balances,” says Babaian, even paying “one dollar over the minimum balance requirement will keep your credit rising.”

Short-term solutions may be especially appealing to young people who haven’t had time to establish good credit and may already have a sizable chunk of debt in the form of student loans. This is a big concern for a lot of gig workers, seeing as 47 percent of all millennials work in the gig economy, according to that same Upwork poll.

At the end of the day, it’s important that gig workers manage their fluctuating income wisely. This means having a good fix on your necessities and creating a budget, making sure you stay on top of your taxes, and trying to maintain or improve your credit as best you can.

To learn more about managing your money, check out these other posts and articles from OppLoans:

Do you have a personal finance question you’d like us to answer? Let us know! You can find us on Facebook and Twitter.

Visit OppLoans on YouTube | Facebook | Twitter | LinkedIN |Instagram


Jacob Dayan is the CEO and Co-Founder of Community Tax, LLC (@communitytaxllc) and Finance Pal, LLC. He began his career in Wall Street New York at Bear Stearns working in the Financial Analytics and Structured Transactions group. He continued to work in Wall Street until early 2009. When he then left New York and returned to Chicago to be with his family and pursue his lifelong dream of self-employment. There he co-founded Community Tax, LLC followed by Finance Pal in late 2018.
Marina Babaian is the founder of Mbridge Consulting Group and its lead CPA. She has a diverse background working with highly regulated fintech companies, global start-ups, corporations, and dozens of public and private organizations. She began her career in the start-up sector and has risen to become a leading subject matter expert in that world. Being an alumnus of Woodbury University, she’s taken an unconventional approach to traditional accounting practices through innovation and creativity. Working with various industries and companies, Marina discovered what many companies lack and that is a proper infrastructure and fundamentals needed to help a company become scalable due to the high cost and low resources. She has bottled her success to a science and has formed the Mbridge Consulting Group to solve this problem. 

How Do Variable Interest Rates Work?

Variable rates can go up or down based on the performance of a “benchmark” rate, and this movement can mean higher or lower costs.

Taking out a personal loan can often mean getting bombarded by financial jargon. Here at the OppLoans Financial Sense Blog, it’s our goal to demystify a lot of these terms and break them down into simple language that a layperson can understand. So if you’ve ever wondered what exactly a “variable interest rate” is, you’ve come to exactly the right place!

What is a variable interest rate?

When it comes to borrowing money with a personal loan or a credit card, there are two kinds of interest rates that you’re going to encounter: fixed and variable.

“A variable interest rate is an interest rate on a loan or security that moves up and down over time,” explained Joe Bailey, Operations Manager at My Trading Skills (@MyTradingSkills). “It owes its fluctuation to being based on an underlying benchmark rate/index that changes from time to time.”

In contrast, he continued, a fixed interest rate does not fluctuate but remains steady throughout the life of the product.

When you’re borrowing, lending, or investing money, its all about managing your risk. Do you want smaller rewards that are much safer to achieve, or do you want to shoot for greater rewards that come with a higher likelihood of the whole thing going south?

So it is with variable interest rates: Sure, you can see lower rates, but you risk getting stuck with higher ones.

“The advantage here is if the underlying interest rate/index declines, so will the interest you will pay on your loan or security,” said Bailey. “Conversely, if this underlying interest rate/index goes up, you’ll end up paying higher interest on your loan facility. This means you will have to pay more money back to your lender.”

Here’s an example.

How do variable rates determine whether they should move up or down? By tying themselves to another interest rate and following its movements.

“In laymen’s terms, variable interest rate means an interest rate which is based on a benchmark interest rate or an index or simply market rates,” said accountant and blogger Rishit Shah of TallySchool.

Shah offered the following example to illustrate how this relationship works.

“You take a loan at 8 percent variable interest rate based on LIBOR (London Interbank Offered Rate). Now, if the LIBOR goes down, your interest rate also goes down. Similarly, if the LIBOR goes up, your interest rate also goes up.

“Therefore, it is called a variable interest rate because it varies or changes on the basis of some other benchmark rate, which in our example is LIBOR.”

Shah also clarified that variable rates are also sometimes referred to as “floating” or “adjustable” interest rates.

Benchmark rates: The prime rate and LIBOR.

In Shah’s example, he used a loan that was tied to the London Interbank Offered Rate or LIBOR rate. This is the rate that banks use to lend money to each other, and it is often used as a benchmark rate in foreign transactions.

For U.S. borrowers, on the other hand, a different rate is often used. If you live in the U.S. and are applying for a loan, that loan will likely be tied to the “prime rate” which is the rate that banks use when lending to their very best, most reliable customers.

“Variable interest rates are tied to the prime rate which is controlled by the federal reserve,” said Levi Sanchez CFP®, BFA™, founder of Millennial Wealth, LLC (@millennialwlth).

“The federal reserve controls monetary supply and therefore can influence interest rates. In a rising interest rate environment, variable interest rates used by consumers are also increasing. In a lower interest rate environment, the interest rates for consumers would, in turn, be lower.”

If you have a variable interest rate tied to the prime rate, it is likely set at a certain percentage above that benchmark. For instance: If your variable rate is five percentage points higher than the prime rate, a change in the prime rate from six percent to seven percent would cause your variable rate to change from 11 to 12 percent.

The pros and cons of variable interest rates.

Like most other things in life, both variable and fixed interest rates come with their respective pros and their cons. The difference is that those pros and cons will vary depending on larger economic forces, as variable rates are better in some market conditions than in others.

“If the benchmark interest rate goes down, your interest payments also go down and you have to pay less money in interest,” said Shah. But the reverse is also true. “You may have to pay significantly higher interest payments if the benchmark rate goes up. In other words, you won’t get a peace of mind since the rates are always fluctuating,” he added.

And for longer-term loans, Shah advised that the odds of your rate going up are much higher: “If you expect to keep a loan for a long time, the chances are greater that the interest rate might go up as, gradually, the economy grows and prices go up in the long run.”

Shah also laid out two additional benefits beyond the prospect of lower interest rates: Better access to credit and fewer penalties for early repayment.

“If your credit is not good enough, you can get a loan on a variable interest rate since it is based on a benchmark.” he said, adding that “in a variable interest rate mortgage, you don’t need to worry about penalties if you want to complete your mortgage payments early or switch the lender.”

However, access to credit always comes with a flipside: Just because you can take out a loan doesn’t mean you should.

Just like how borrowers with poor credit would do their best to avoid short-term no credit check loans (like payday loans, cash advances, and title loans), a variable interest rate available to someone with poor credit could be a sign of a predatory lender.

Watch out for low introductory rates.

Financial Analyst Trish Tetreault of FitSmallBusiness.com (@FitSmallBiz) explained the dangers that can come with the low “introductory offer” rates that come with many variable rate loans, especially for borrowers who have poor credit:

“In general, a variable interest rate will begin with a lower introductory rate and will rise and fall based on a price indicator. Often the low introductory rate seems manageable, but the gradual increase in rate over the course of your loan can result in an interest rate and payments that quickly become unaffordable.”

“Borrowers with less than perfect credit are often offered loans with variable interest rates and later find the rate increases to be unmanageable.  As such, it’s crucial to understand when your rate may increase, and whether or not there are caps on the amount the rate can increase.

If you have recently taken out a bad credit loan with an introductory rate, here is Tetreault’s advice:

“If your introductory rate is fixed for a certain period of time, use this time to improve your credit score.  As your credit score improves you’ll be able to qualify for loans that offer better rates and terms, and you may be able to refinance your way out of your variable rate loan.”

Know before you borrow.

If you want to take advantage of a variable interest rate on a personal installment loan, an auto loan, or a mortgage, you’re going to need to do some research first. The more knowledge you have, the more confident you can be in your decision, and the less likely you are to be taken advantage of and end up in a predatory cycle of debt.

To learn more about the ins and outs of personal finance, check out these related posts and articles from OppLoans:

Do you have a  personal finance question you’d like us to answer? Let us know! You can find us on Facebook and Twitter.

Visit OppLoans on YouTube | Facebook | Twitter | LinkedIN | Instagram


Joe Bailey is the Operations Manager at My Trading Skills (@MyTradingSkills), a financial trading courses provider. His experience includes web development, UX and conversion rate optimization for both B2B and B2C.
Levi Sanchez is a CERTIFIED FINANCIAL PLANNER™, BEHAVIORAL FINANCIAL ADVISOR™ and Founder of Millennial Wealth, LLC (@millennialwlth), a fee-only financial planning firm for young professionals and tech industry employees. Levi’s been quoted in the New York Times, Business Insider, Forbes, and is a frequent contributor to Investopedia. He is an avid sports fan, personal finance and investing geek, and enjoys a great TV show or movie. His mission is to help educate his generation about better money habits and provide financial planning services to those who want to start planning for their future today!
Rishit Shah is a blogger for TallySchool and currently is in CA Final level from India, the equivalent of CPA Final level in the US. He has been featured on Accounting Today and US Chamber of Commerce recently. He is interested in finance, accounting, and taxation. In his free time, he loves to write poetry.
Trish Tetreault is a Financial Analyst at FitSmallBusiness.com (@FitSmallBiz).

The Broke Person’s Guide to Hanging With Friends

Don’t let your friends’ expensive tastes be the reason you rack up a pile of high-interest credit card debt—follow these expert tips instead!

You know what’s great? Friendship.

But occasionally friendship costs money. And if you have lesser financial means than your friends, things can get awkward fast.

Just imagine: one week your friends tell you that they’ve decided to go on a caviar bar crawl. You could maybe afford a single small tin, but they’ll be expecting you to try multiple tins at each new location! So you make up an excuse about having to stay home and wash your hair.

Next week they invite you out again. This time they’re planning to have a Mazzerati demolition derby and each of you will be expected to provide your own car. You OBVIOUSLY can’t afford this, so you tell them you’re still washing your hair and won’t be able to join them.

Week three rolls around and now they want you to join them in a game of space polo. You heard them correctly. They’re going to put a bunch of horses in space suits and then wear space suits of their own and ride the horses in space while trying to score goals by knocking a ball around zero gravity. Not only does this sound like animal abuse, but you definitely can’t afford it. You tell them you’re still washing your hair but now they’re just going to stop inviting you to hang out. Who wants a friend with such dirty hair after all?

So what can you do if you want to keep your friends but you’re on a tight budget? Short of taking out a personal loan to afford your social life, here’s what you can do.

Suggest the activities.

If you’re the kind of person who waits for someone else to suggest the group activity, maybe try being a slightly different kind of person. Just in that regard. You’re doing amazing otherwise!

“Suggest less expensive activities,” advised Leslie H. Tayne Esq. (@LeslieHTayneEsq), Founder and Head Attorney at Tayne Law Group (@taynelawgroup). “If your friends have a tendency to be a little lavish, consider suggesting less expensive or free activities. Days in the park, hikes, and bike rides are fun free things to do, especially in the nice weather. Find more reasonably priced restaurants around town and suggest those as alternatives to the pricier places.”

Kelan Kline of The Savvy Couple (@TheSavvyCouple) echoed the benefits of affordable physical and outdoor activities: “One of the best ways to hang with your friends and not break the budget is to choose an activity other than going bar hopping on the weekends. These tend to add up very quickly and before you know it you have dropped $50 on alcohol and a bad headache the next day.

“Instead, find some similar interests when it comes to physical activity. I’m almost 30 years old and still play basketball, racquetball, floor hockey, and ultimate frisbee with my friends on a regular basis. These activities are essentially free besides the gym membership. A good game night, campfire, or even a camping weekend can be very cheap entertainment with your friends.”

Have your friends over.

You can go one step further than just suggesting activities. You can bring the activities into your home! Hosting is a great way to offer something to your friends at little additional cost and when you’re done, you’re already home!

“Host at home,” suggested Holly Wolf, Director of Customer Engagement for SOLO Laboratories (@SOLO_labs). “I used this last week on vacation. Instead of going out to eat, we grilled lobsters at our condo. I made a salad, roasted asparagus, and offered refreshing libations. The dinner cost about $60 for four people. That’s a fraction of what dinner (and not a lobster dinner) would have cost in a restaurant. You can make a roasted chicken, salad, and baked potato for four people for about $12.”

And if you ask friends to bring some food and drinks, you can save even more!

Eat at home first.

Even if you will be going out with your friends, you can take some steps to guard against spending more than you know you should.

“Eat at home first,” recommended Success Mindset Expert Belinda Ginter (@unstoppablebelinda_). “If your friend group is going out to a nice restaurant for dinner or a pub for snacks and you really can’t afford it than eat first. Fill up, then you only need to chip in a few dollars to snack when you’re at the restaurant. This takes the pressure off. And if everyone is ordering an entree you can get away with an appetizer to be more cost-effective.”

Take advantage of general savings strategies.

General savings methods will also be helpful when it comes to hanging with friends on a budget. You just may have to do some research beforehand.

“Pretty much anything and everything is online somewhere, as are deals, sales, and coupons,” explained real estate professional Chantay Bridges. “Once you know what the plans are, do a little homework and find a way to do the same thing at a discount price. Whether it’s obtaining your tickets from a site that provides AAA, employee, or any other discounts. The trick is to find the same activity but do it for less.

“Discover ‘buy one get one free’ deals. Yes, they are out there. Whenever applicable, do buy one, get one free deal. You and a friend could split the cost of the one you buy or take turns getting the item that is free. Regardless of how you do it, your costs will be considerably less. If you’re going to an amusement park, Google ‘buy one get one free’ to wherever you are going and see what comes up. Don’t forget specials such as Legoland, when kids can go free with a paying adult pass. Be creative in your search and you’ll be surprised at all of the deals available at your fingertips.”

Be open with your friends.

At the end of the day, if these friends are really your friends, they should understand and be sensitive to your budget needs. It can be tough to be open about financial issues, but if you do, it can save you a lot of headaches and make your friendships stronger.

“Most of us have had the group of friends who always want to ‘just split it evenly because it’s easier,” empathized Tayne. “If you’re the one on a budget, those words may make your stomach drop. Stand up for yourself in those situations. If you only had a salad and a water, you shouldn’t have to pay for your friend’s filet mignon and Cosmo. It can be an uncomfortable conversation, but simply remind your friends that you had less and feel it’s only fair.

“It’s a good idea, then, to bring cash when you go out, because that can make paying for your portion of the bill simpler. Additionally, using cash will allow you to have a visual representation of how much you’ve spent, which can help keep you on track as well.

“It can be uncomfortable to talk to your friends about your financial situation. You certainly don’t have to give all the details of your finances, but if your friends continue to try to get you to do things you can’t afford, you may need to spell it out for them a little more. If they’re truly your friends, they’ll value spending time with you more than any specific activity.”

You may never be able to afford space polo. But when your friends understand your situation, they should be sympathetic enough to do some cheaper activities with you next time. And if they aren’t, maybe you need to start making some new friends. The last thing you want is a weekly game of space polo to leave you relying on no credit check loans, payday loans, and cash advances to get by.

To read more about saving money on everyday expenses, check out these other posts and articles from OppLoans:

Do you have a  personal finance question you’d like us to answer? Let us know! You can find us on Facebook and Twitter.

Visit OppLoans on YouTube | Facebook | Twitter | LinkedIN | Instagram


Chantay Bridges is America’s leading mogul, who utilizes her gifts and abilities in outreach to her community and world around her. She is an exceptional Realtor, (translation: the one you want to hire), Author, Speaker and a keen philanthropist with a strong business acumen.
Belinda Ginter (@unstoppablebelinda_) is an industry leader in Emotional Kinesiology, Success coaching & Mindset. She is a  trained emotional Kinesiologist certified in BET and Mindset Expert with over 5 years of experience with 6,000 plus clinical coaching hours, working with thousands of clients worldwide.
Kelan and Brittany Kline aka The Savvy Couple are two thriving millennials that are daring to live differently. They started their personal finance blog in September 2016 to help others get money $avvy so they can live a frugal and free lifestyle. Brittany is a full-time 4th-grade teacher and Kelan runs The Savvy Couple full-time and works as a digital marketer. You can follow them here: FacebookTwitterPinterest, and Instagram.
Leslie H. Tayne, Esq. (@LeslieHTayneEsq) has nearly 20 years’ experience in the practice area of consumer and business financial debt-related services. Leslie is the founder and head attorney at Tayne Law Group (@taynelawgroup), which specializes in debt relief.
Holly Wolf is an executive with over 30 years of experience in banking and healthcare.

Is It Time for You to Buy a Home?

Buying a home is a major financial decision, which means you’ll want to do plenty of research, saving, and preparation before taking the plunge.

You’ll have to make some big decisions during your life. Two of the biggest decisions will likely be what career you choose to pursue, if any, and whether and when you plan to have children.

Those two choices will have a huge impact on almost every other aspect of your life, like deciding whether or not to buy a house. Coincidentally, deciding whether it’s time to buy a house is what this article is about. Wow, how convenient!

Whether you need a new place to live now or are anticipating needing a new place to live in the future, you may start wondering whether it’s time to buy a house. And if you are wondering, you’ve come to the right place.

If you aren’t, consider reading the article anyway. You wouldn’t want our hard work and the thoughtful insights from our contributors to go to waste, would you?

How long would you be staying there?

You can’t plan every aspect of your life. You might think you’re going to live in one home or even one city or even one country for the rest of your life, but life can change suddenly. Still, you’re going to want to be pretty certain about to settling down before you consider buying a house.

“My number one piece of advice is to consider how long you are likely to stay in the property,” recommended James McGrath, co-founder of the NYC real estate brokerage Yoreevo (@yoreevo). “If there’s a decent chance it’s going to be less than five years, they shouldn’t buy.

“The first reason is between the search and actually executing the transaction, buying is a long process. But that’s only half of it. When the time comes to sell, you have to go through it all over again. Like all other costs, the longer you stay in the property, the less significant they become.

“That leads to the second and more important reason which is the actual transaction costs. While every market will be different due to local taxes and other costs, in NYC, most owners will pay a total of around 10 percent to buy and then sell a property. That’s a huge amount of money and if you don’t give the property enough time to appreciate you’ll lose money, even if it appreciates slightly.

“Also related to this: One of the biggest benefits of owning a home is the ability to exclude capital gains on the sale of your primary residence. The longer you own your home, the more likely it is and the more you will take advantage of that.”

Are your finances in a good place?

You might have to get your financial house in order before you look into buying an actual home. And while that won’t necessarily be a fun or a quick process, it may be a necessary one.

“Do you have your finances in order?” asked Ali Wenzke (@AliWenzke). “Check your FICO score and consider the stability of your job or other income streams. Budget 20 percent for your down payment plus additional money for closing costs, home inspections, and attorney fees.

“Also, realize that owning and maintaining a home can be expensive, so budget for property taxes, utilities, and general maintenance costs.”

Can you qualify for a mortgage?

Even if your finances are manageable month to month, if you can’t qualify for a mortgage and afford the accompanying costs, it’s not the time to get a house.

“All other analysis regarding the feasibility of a property purchase is truly futile until a person has been pre-qualified for the acceptance of a mortgage,” warned Ron Humes, VP of Operations Southeast Region for Post Modern Marketing (@PostMM).

“The lender will review a prospect’s credit scores, debt to earning (DTE) income ratios, and financial portfolio to determine if they are a good risk for a loan and how much they may borrow. This should be the very first consideration in the thought process, and no other time should be spent until they know they can qualify for a purchase if they choose.

“The next important consideration in the decision for a purchase is the minimal capital needed to complete the transaction. The money needed for the down payment to secure a mortgage is three percent to five percent depending on the loan type.

“There is a VA product available to veterans that still allows no down payment, but one must also consider the closing costs and prepaid items. The prepaid items are the taxes and insurance that will be collected at the closing. The closing costs are the fees charged by the lender, appraiser, and the closing attorney in the processing and completion of the loan.

“There are strict rules as to the source of the funding for the purchase, so the prospect should ensure that their source of funds will be acceptable to the lender before proceeding.”

Are you willing to take a practice run?

Even if you can get approved for a mortgage and you think your finances are in order, it won’t hurt to make a virtual attempt.

“If you think you’re ready to buy a home, or if you want to get ready to buy a home, you need to do a financial test-run,” suggested Certified Financial Education Instructor Amanda L. Grossman (@FrugalConfess). “Figure out how much your monthly home expenses are going to be (for your dream home, then for a less-than dream home).

“This needs to include costs like your mortgage payment, your homeowner’s insurance, property taxes (divided out by 12 months), and maintenance costs (industry estimates are one to three percent of your home’s total cost, each year, spent in repairs/maintenance).

“Once you come up with a number, open up a savings account specifically for the purpose of doing your financial test-run. Then, each month for at least three months, ‘pay’ that amount of money into that savings account.

“How does it feel to make that payment each month? Do you still have cash flow left to pay your other bills, and to live a little? Or do you feel financial strain? This will help you both in figuring out if you’re ready to buy a home, and in helping you save up for the down payment. Which is a win-win scenario.”

Is there a better option available?

Sometimes it just might make more sense to continue renting for the time being, rather than jumping into home ownership.

“There are many factors that must be considered in the true cost of renting vs. owning,” explained Humes. “If we want to cut right to the chase, there is an easy way to understand this. No investor is going to purchase a property and rent it to another party without a built-in profit after all costs and expenses are paid.

“If an investor purchases a property and the total monthly payment for principal, interest, taxes, insurance, maintenance and management costs are $800 per month, the investor cannot lease that property for $800 per month because they have to calculate in a return on their invested money and a profit margin.

“The investor may lease this property for $1,100 per month with the tenant paying all utilities and the investor retaining the mortgage interest deduction (MID) write-off on their taxes. In addition, an investor will have to pay, and pass along to the tenant, a higher interest rate on the mortgage since it is considered a non-owner-occupied property and mortgage product.

“Therefore, in our example, the tenant could have purchased the same property for perhaps $600 per month instead of $1,100 per month and retained the MID tax write-off for themselves. The person considering a purchase over lease still needs to consider if they have the time to oversee the maintenance on the property.”

When you decide it’s time …

OK, you’ve taken all the above factors into account. Now it’s time to find the house you want to purchase. So … how do you go about that?

“After getting pre-approved for a mortgage, it’s time to look for a home you’ll love!” advised Luke Babich, CSO of Clever (@ListWithClever). “Make a list of variables you value: neighborhood safety, access to parks, proximity to entertainment, school district, the availability of public transportation, and rank how important each of these factors is to your home selection process.

“While it is possible to buy a home without an agent, finding a real estate agent you trust can really help you find a home that meets your standards, as agents have invaluable experience and knowledge of local markets. Go to plenty of open houses to scout out the area, get a feel for what’s on the market, and communicate your thoughts with your agent.”

And if it isn’t time …

Don’t get discouraged if it isn’t the time to buy a home yet. You can still begin preparing for when the time comes.

“If you are not in a place to buy a home just yet but know it is something you want soon, review your finances and make adjustments to start saving up,” recommended Jared Weitz (@jaredweitz), CEO and Founder of United Capital Source Inc. “Cut spending in certain areas, pick up a side hustle or move into a smaller place to rent and then allocate that money towards your down payment and investments.”

And preparing isn’t just about the serious business and money aspect.

“Begin making your dream home wish list,” advised Wenzke. “Would you love to live in a certain neighborhood or have an open floor plan or a gourmet kitchen? Once you have some ideas, use that list to find the perfect rental for you. You can test out your dreams before making a long-term financial commitment.”

Buying a home may be a big decision, but taking the necessary steps and time to figure out what makes sense for you will allow that decision to be more manageable. If you do get around to buying a home, drop us a line and we’ll bring you a nice housewarming meal!

To learn more about housing-related financial issues, check out these other posts and articles from OppLoans:

Do you have a personal finance question you’d like us to answer? Let us know! You can find us on Facebook and Twitter.

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Luke Babich is the Co-Founder and CSO of Clever (@ListWithClever), the free online service that connects you with top Real Estate Agents who can help you save on commission. Luke is also an active real estate investor with 22 units in St. Louis and a licensed Real Estate Agent in the State of Missouri.
Amanda L. Grossman (@FrugalConfess) is a Certified Financial Education Instructor at Frugal Confessions, where she helps Chief Family Officers (CFOs) control their finances so that they can save money to live their life by design. She’s a featured blogger at the Houston Chronicle, and winner of a 2017 Plutus Foundation grant to create the Mt. Everest Money Simulation: A Kid’s Money Educational Adventure.
Ron Humes is currently the VP of Operations Southeast Region for Post Modern Marketing (@PostMM); a full-service digital marketing company. He has been a realtor as well as an owner and principal broker of his own realty company for 20 years. He has been a custom home builder and owner of a remodeling company. He is an active investment property owner of flips and rentals. He has been a Property Manager for 20 years. He trains investors to purchase, flip and rent properties.
James McGrath is a co-founder of Yoreevo (@yoreevo), the tech-driven NYC real estate brokerage dramatically lowering transaction costs for buyers and sellers. Prior to founding Yoreevo, James worked in finance, most recently at Citadel where he researched the housing market.
Jared Weitz (@jaredweitz) has been in the financial services industry for over 10 years. Due to his extensive work experience and deep network of close financial relationships, he handles a multitude of different finance options for his clients and contacts. Over the years, he has held positions in some of the largest business financing companies in the U.S. Some of his roles have been: Underwriter, Director of Business Development, Managing Partner and currently, CEO of United Capital Source, LLC.
Ali Wenzke HSAli Wenzke (@AliWenzke), Moving Expert, moved 10 times in 11 years. Now she’s helping the millions of people who move each year by providing practical tips on how to make moving a happy experience at The Art of Happy Moving. After calling seven U.S. states home, Ali is now happily settled in the Chicago suburbs with her husband and three children. She doesn’t plan on moving anytime soon.

5 Times When a Personal Loan is a Bad Idea

If you’re considering a personal loan to pay for something like a vacation or to cover everyday expenses, you should stop and reconsider.

Unless you already have more money than you’ll ever need, you’re probably going to need a loan at some point.

(And if you do have more money than you’ll ever need, why are you reading this? You should be flying your own private helicopter, dropping cash on needy families. Of course, you might be reading this article while you’re doing that, in which case you should stop and focus on the flying and cash disbursal as reading while flying is very dangerous!)

… Anyway, there are many good times to get a loan!

“Loans are great for financial leverage,” advised Levi Sanchez, founder and financial planner at Millennial Wealth, LLC (@millennialwlth). “Meaning, they should be used in cases where access to capital to pay for an asset or education (in the case of student loan) isn’t readily available. If used for an asset, especially one that appreciates over time (such as a home), loans can be a great way to access them.”

So those are a few instances of good times to get a loan. What are some bad times to get a loan?

1. When you can’t afford a vacation.

We all need a vacation sometimes. It’d be nice to be able to go on whatever vacation you’d like, but there is not currently some sort of “federal vacation program” to provide for those who can’t afford their ideal vacation.

Until that legislation is approved, however, you may have to put some severe limits on the kind of vacations you take. And using a loan to pay for a vacation is never a good idea.

“Loans should not be used for expenses,” warned Sanchez. “Meaning, you shouldn’t use credit cards (without expecting to pay it off within the month to avoid interest charges) or personal loans to finance a big vacation.

“In doing so, you’d be clearly spending above your means and paying high-interest charges for holding a loan of that nature for a period of time.”

2. For regular bills.

Ideally, you’d only take out a loan as an investment in the hope that it’ll bring greater returns one day. But unfortunate surprises happen. If you have an unexpected medical expense or your car suddenly breaks down, you may find that a personal loan is your only way to cover the expense.

If that is the case, you’ll want to research all of your possible options to find the ideal, most affordable loan for your situation. The right loan with the right payment schedule can allow you to get through this setback in the best position possible.

However, if you’re finding yourself taking out a loan or even considering taking out a loan to pay recurring expenses, like groceries, rent, or utilities, then there’s a pretty significant problem afoot.

There are many expenses you can’t cut down on, but if you’re taking out loans for recurring expenses, you’ll just be getting further and further in the financial hole. Ask for help from a friend or family member if you have one or consider seeking out government assistance.

You probably already knew that taking out loans regularly is bad for your financial health, but just in case, now you know.

3. If you don’t have a plan to pay it back.

You should always make sure you have a payment plan before taking out any loan—whether it’s a mortgage, an auto loan, or a regular unsecured installment loan.

However, it might be tough in an emergency situation when you feel like you just need to get the cash as quickly as possible. And that’s doubly true if you don’t have good credit and your only options to borrow money are bad credit loans.

But taking a few extra steps in the short term can you leave you much better off in the long term.

“It is not a good time to get a loan if you don’t have a solid plan to pay back the loan,” advised Jaquetta T. Ragland, owner of YoungandFinance.com (@YoungandFinance). “Some people apply for a loan because they meet the qualifications but they have no plan in place to pay it back.

“This is dangerous because it can cause you to fall behind in your payments which will have a negative impact on your credit score because of missed payments. In addition, it could cause an increase in your interest rate which will also raise your monthly payment requirement.

“If you don’t have a solid plan in place to pay back the loan, it is not a good time to have one.”

4. If your credit needs improvement.

You can’t predict when the aforementioned financial emergency might happen. But if you can avoid taking out a loan when your credit needs improvement, you’ll be better off.

“You should also NOT get a loan if you don’t have good credit,” explained Jennifer Harder (@JenniferHarder4), Founder & CEO of Jennifer Harder Mortgage Brokers. “If you want a personal loan that has a better interest rate than a credit card, you’ll have to have some strong credit history.”

In order to avoid taking out an online loan or visiting a brick-and-mortar storefront to cover costs during a financial emergency, you’ll need to have a well-stocked emergency fund in place.

That way you can steer of high-cost no credit check loans (like payday loans, cash advances, and title loans) and cover those bills with money you already have—interest-free!

5. When a credit card could work.

Used improperly, credit cards can get you in a lot of trouble. But used properly, and paid off in full every month, they can be very useful tools that can help build your credit.

“With a strong credit score you can qualify for a zero percent APR credit card that meets the needs of your loan amount,” offered Jared Weitz (@jaredweitz), CEO and Founder of United Capital Source Inc. “Although many loans can have strong interest rates, nothing beats zero percent.

“If your finances are already very unstable, and you have reason to believe your income or employment situation may change in the near future, taking out a loan when finances are unsteady can hurt you long term if it becomes not possible to repay on time and you let the interest rise.”

When it comes to getting a loan, it’s all in the timing. And we hope these tips will help with yours. To learn more about how best to manage your finances, check out these other posts and articles from OppLoans:

Do you have a personal finance question you’d like us to answer? Let us know! You can find us on Facebook and Twitter.

Visit OppLoans on YouTube | Facebook | Twitter | LinkedIN | Instagram


Jennifer Harder (@JenniferHarder4) is a mortgage broker with over 30 years of management and sales experience. Throughout her mortgage career, Jennifer has helped hundreds of clients solve their financial challenges. Her motto is to focus on the client’s needs above all else.
Jaquetta T Ragland is the owner of YoungandFinance.com (@YoungandFinance) and is also a licensed real estate agent. She teaches personal finance education to empower individuals to make the right financial decisions in their lives.
Levi Sanchez is a CERTIFIED FINANCIAL PLANNER™, BEHAVIORAL FINANCIAL ADVISOR™ and Founder of Millennial Wealth, LLC (@millennialwlth), a fee-only financial planning firm for young professionals and tech industry employees. Levi’s been quoted in the New York Times, Business Insider, Forbes, and is a frequent contributor to Investopedia. He is an avid sports fan, personal finance and investing geek, and enjoys a great TV show or movie. His mission is to help educate his generation about better money habits and provide financial planning services to those who want to start planning for their future today!
Jared Weitz (@jaredweitz) has been in the financial services industry for over 10 years. Due to his extensive work experience and deep network of close financial relationships, he handles a multitude of different finance options for his clients and contacts. Over the years, he has held positions in some of the largest business financing companies in the U.S. Some of his roles have been: Underwriter, Director of Business Development, Managing Partner and currently, CEO of United Capital Source, LLC.

6 Summer Must-Dos for New College Students Who Want to Slay Their Finances

A personal finance checklist for college-bound high school seniors.

With a college acceptance letter in hand, most high school seniors are probably hoping for a lazy summer of sun and fun. But the carefree months will pass, and when fall arrives, students will be greeted with classes, homework, campus jobs—and tuition bills and other expenses.

To prepare for their next phase of life, students will undoubtedly take stock of clothing and dorm-room decorations. But it’s important that they look at their finances, too.

So what are the personal finance preparations incoming freshmen should wrap up before summer’s end? Here’s a checklist of six expert-recommended must-dos.

1. Practice Budgeting by Allocating Expenses

For many rising high school students, college will be the first time they’re responsible for managing their money. Ashley Lomelin of Allegro, LLC, suggested that students should spend some time this summer practicing budgeting.

“Not simple budgeting such as ‘spend less than you make,’ but learning to allocate your expenses for gas, school supplies and anything else they may be responsible for,” she said.

To do this, students should start by listing all of their expenses for a given month. Over the summer, these might include entertainment, food, and travel costs. Once the semester starts, things will change. Students should calculate the expected costs of the coming school year to “learn how many hours they should work, which can also help with dedication and a better skillset to looking for jobs after graduation,” Lomelin said.

2. Decide If You’ll Plan to Work

Any job that brings in income is a win, but for students, employment also offers the opportunity to gain work experience.

Brian Brandow, of the Debt Discipline blog, said that students need to decide whether they will work during the upcoming semester. This is one of the most significant financial decisions a graduating high school senior will make.

“Once this decision is made, it can give them an idea of how much money they should save during the summer,” he said.

Students can use their budget to determine how much they’ll need to make during the school year to cover their expenses. If costs are high, a summer job will allow them to get a head start by earning a few months’ worth of income.

“If they can save a higher percentage of their summer money, it can help them focus on school and avoid having to work many hours,” Brandow suggested. He gave an example of a student who plans to spend $100 each week. A typical semester runs 15 weeks, so this would total $1,500 per semester, or $3,000 for the year. “If they spend more or less every week, it will give them an indication of how much they may need to work during the school year to supplement their income,” he said.

In the opinion of Shaan Patel, founder and CEO of Prep Expert, a summer job is a necessity. Working during the summer allows students to start building an emergency fund.

“Even if you’re receiving substantial student aid, it never hurts to have money saved up and ready to use due to unforeseen circumstances,” he said.

Working doesn’t end with summer. There are plenty of opportunities on campus to make some extra cash. Federal work-study is one—it offers part-time jobs to undergraduate and graduate students with demonstrated financial need. Work-study encourages jobs related to the student’s area of study, as well as community-service-based work. Many campuses also have internship or co-op opportunities with student organizations, school departments, and local groups.

No matter the position, any job will earn students income and demonstrate to future employers that they’re hard-working and motivated.

3. Search for Scholarships to Pick Up the Slack

Summer is also a great time to search for scholarship opportunities.

“Scholarships are the best way to pay for higher education, but require some research and a lot of writing time,” Lomelin said. “If a student isn’t busy working, they can learn to also manage time to writing away potential scholarship pieces for school.”

While many scholarships are competitive, students who apply strategically and research examples of successful scholarship essays can boost their chances of taking home money for tuition costs.

4. Invest in a Secured Credit Card

When mismanaged, credit cards can have some pretty serious consequences. But there are ways to reduce the risks of traditional credit cards while maintaining the convenience and credit-building potential they offer. One such option? Secured credit cards.

“To help build credit without putting yourself into debt, invest in a secured credit card,” Patel suggested. “They’re great options to invest in because instead of getting a credit limit from a faceless company waiting for you to max it out, you personally back your own credit line.”

Secured credit cards can be opened for as little as a $200 deposit, Patel said. This makes them useful for handling small bills. Secured credit cards also give students an opportunity to start building a credit-boosting credit history.

“… as you make your payments every month to stay under limit, your credit score will grow without problem,” Patel said.

5. Get a Jump Start on Student Loans

Even though student loans don’t go into repayment until students have ended their full-time studies, it’s not a bad idea to actively pay off loans while still in college. Deborah Sweeney, CEO of MyCorporation, suggested preparing for those costs by setting aside money over the summer.

“Oftentimes, college students wait until post-graduation to begin paying off their loans,” Sweeney said. “Instead, get a jump start on your loans and pay them off with your extra summer cash.”

6. Think Long Term by Learning How to Manage Money

Leif Kristjansen, the founder of Five Year FIRE Escape, suggested that students should take advantage of summer downtime to bone up on personal finance.

“When you start out as a fresh college student you generally have very little money so anything you do isn’t going to have a large effect on your ability to retire or pay off your student loans,” Kristjansen said. “The one thing that is very beneficial though is learning what to do with your money once you have a reasonable income.”

One habit to start early, Kristjansen said, is investing.

“[T]ake a bit of money each year and invest it,” he said. “You have school work to do so I would recommend something simple like an index fund. You can monitor and learn about investing as you go through school and you will internally understand the value of investing and saving.”

Students can let these investments sit over the course of their education. Then, after four years for the money to grow, “you will know what to do with your money and how investing it can help you in your future,” Kristjansen said.

By relying on his investment knowledge, Kristjansen managed to retire in his early 30s.

“I think that was an education worth investing in!” he said.

Bottom Line

For college-bound high school students, summer offers one last chance to relax and spend time with friends. But there are preparations to make for the coming school year, and students shouldn’t neglect their finances when attending to them. These six summer must-dos will help incoming freshmen get their finances on track.


Brian Brandow is a dad, husband, and personal finance blogger at Debt Discipline. He and his family have successfully paid off over $100,000 worth of consumer debt. Brandow works in his community championing financial literacy by speaking and launching financial literacy programs.
Leif Kristjansen is the founder of FiveYearFIREescape where he blogs about his early retirement and how others can do the same. Once upon a time, he worked as a scientist in high tech in Toronto, Canada, but after enough late nights and stress-filled days, he decided to get out. He quit working at 32 with a wife, kids, and a house in a pricey city. His wife even retired two years before. He accomplished this through saving, financial savviness, and rental houses which all started back in college.
Ashley LomelinAshley Lomelin is a marketing and communications professional with Allegro, a digital debit card bringing financial solutions to the underbanked and unbanked. Passionate about creating connections and bringing their community resources and literacy, she has secured publications in the finance world. She has also had the opportunity to work with ‘The Center for Financial Freedom,’ the education site by Allegro, by producing financial templates and research reports for their members.
Shaan Patel, founder and CEO of Prep Expert, grew up in his parents’ urban motel and attended inner-city public schools in one of the nation’s worst districts. Through hard work and determination, he achieved a perfect SAT score, which garnered him a quarter million dollars in scholarships and admittance to prestigious universities. He then created Prep Expert to share his perfect score strategies with students seeking to achieve their own dreams, aided by a successful appearance on ABC’s Shark Tank and investment capital from Mark Cuban. Patel is currently in residency at Temple University while still providing strategic leadership and management for Prep Expert.
Deborah Sweeney is the CEO of MyCorporation.com, which provides online legal filing services for entrepreneurs and businesses, startup bundles that include corporation and LLC formation, registered agent services, DBAs, and trademark and copyright filing services.

How did you prepare for college financially? Tell us your tips on Twitter at @OppUniversity.