Money Management

It doesn’t cost any money to learn something new; all you need is time and commitment. Read on to find out which skills could improve your income. 

The latest data shows that 61% of American workers live paycheck to paycheck, and Americans’ credit card debt recently topped $1 trillion. It may be an understatement to say that many people may be looking to boost their income and improve their personal financial situation right now.

The good news is that you can increase your salary or add some additional income from side projects by learning new skills — all without having to spend any money.

Recent data from the employment website Indeed listed some skills that tend to earn people a higher-than-average salary. Here are five to consider to help boost your earning potential.

1. Project management

One of the first high-paying skills Indeed mentions is project management. This may involve managing deadlines, organizing company resources, managing budgets, and communicating project goals with a team.

If you’re an organized person and like to help others stay organized to achieve a goal, developing this skill set could be an excellent avenue to help you increase your income. A quick search on Khan Academy comes up with a long list of videos and courses on various project management focuses available for free.

2. Video production

Many different skills fall under video production, including on-location video shoots, general social media content, video editing, or even being a social media influencer.

I can attest that learning some basic video editing and production skills — all for free — has helped me boost my income. I taught myself basic video editing skills years ago by watching videos online, and I’ve used the skill to earn extra money from making PR videos, social media content, and YouTube videos.

There are some great free video tools out there these days, including DaVinci Resolve for video editing and even the free version of Canva for easily creating video content.

3. Web development

I have one friend who taught himself web development, slowly building his skills over a few years. He started out doing it as his hobby, then learned enough to switch careers (improving his income), and now works for a Fortune 500 company overseeing other developers.

One popular website is CodeAcademy, which has a free version of its membership that gives you basic access to some of its coding courses. Khan Academy also offers free courses for learning computer programming.

4. Communication skills

Improving your verbal and written communication can help you in a variety of jobs, whether you’re in sales, marketing, management, or running your own company.

Communication skills are so essential that billionaire investor Warren Buffett says that workers who improve their written and verbal communication can drastically boost their value. “The one easy way to become worth 50% more than you are now — at least — is to hone your communication skills — both written and verbal,” Buffett said in an interview several years ago.

The online learning company Udemy, has free writing and verbal communication courses, and you can find a long list of communication courses on Khan Academy as well.

5. Social media marketing ​​

Many companies need people to create content for their social media channels and manage the publication schedule. If you like creating content and are also good at diving into audience metrics and managing long-term projects, this could be a good route to explore.

If you haven’t done social media marketing before, there are many online resources to help you. The popular online marketing software company HubSpot has a free course to help people get started in social media marketing, with five hours of instructional videos on topics like developing a social media strategy, building an inbound social media marketing plan, how to create content, and measuring return on investment (ROI).

A few suggestions for getting started

I know what it’s like to use a new skill to improve my personal finances, but sometimes it can be hard to know where to start. Here a few suggestions that might help you get started:

Focus on something you enjoy: If possible, try to develop a new skill in an area you already have an interest in. It’ll be easier to learn and you’ll have more fun putting in the effort.Build on something you already know how to do: You may already have a job that involves a new skill you can expand. For example, if you’re a copywriter, then spending a little time learning social media marketing could help you use your writing in a new way.Set a financial goal: Set a goal for how much additional income you want each month with your new skill. I’ve done this when I’ve taken on new freelance jobs to help me stay focused, and it could do the same for you while you’re learning a new skill.

Learning a new skill can seem overwhelming, but spending a little time each week to build up your expertise will help you expand your skill set faster than you realize and help improve your chances of finding a new side hustle or even making it easier to ask for a raise.

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You should check your credit and pick the right lender before applying for a personal loan. Here’s how following these and other tips can help you get approved. 

If you want to borrow money and pay it back on a set schedule over a few years, a personal loan could be an option for you. Personal loan interest rates are typically lower than credit card rates and you benefit from having a predictable payoff schedule and knowing exactly when you’ll be debt-free.

You need to be approved for a personal loan, though, before you’ll be allowed to borrow. These five tips can help you maximize the chances of getting a loan — and at an affordable rate.

1. Check your credit report before applying

Your credit score directly impacts the likelihood that you’ll be approved for a personal loan. It also has a big impact on the rate you’ll pay. Since credit matters so much, you don’t want your credit report to have any mistakes on it. Unfortunately, as many as 1 in 5 reports contain errors.

To maximize your chances of loan approval, check your credit history before applying. You can do this for free at AnnualCreditReport.com. If you find a mistake, you can get it fixed by contacting the credit reporting agencies.

2. Choose the right lender

Different personal loan lenders cater to different customers. For example, some lenders offer loans only to people with good or excellent credit. Others look beyond your credit history and consider other factors like employment.

If you have solid financial credentials, you’ll usually get the best rate by applying with a lender that caters to clients with good credit. But if you don’t, you’re better off not wasting your time applying with a lender that has strict qualifying requirements.

3. Have proof of income ready

You’ll probably need to show your lender that you earn enough money to repay the loan. This may mean providing documentation like pay stubs or tax returns. You should get these documents ready before you start applying for a personal loan, so you can be prepared to provide them to make the application process go more smoothly.

4. Aim to pay down other debt before borrowing

Lenders consider your debt-to-income ratio. This means they look at how much debt you already have, how much debt you will have after you get the new loan, and how much income you have. If you have too much debt relative to the amount you make, you can’t borrow.

If you can pay down some of what you already owe before getting a personal loan, your debt-to-income ratio will be lower and your chances of approval higher. Debt paydown also helps your credit score too, so making an effort to reduce your balances will be helpful in two different ways in getting the best personal loan rates.

5. Consider a cosigner

Finally, many personal loan lenders allow you to apply with a cosigner. That’s someone who agrees to pay back your loan if you don’t.

If you have a loved one who has more income than you or better credit and they are willing to cosign, this can help you be able to borrow from more lenders and get better rates. Your cosigner does take on a lot of risk, though, so be sure you pay on time to avoid hurting their credit.

By following these five tips, ideally you can get a great loan that allows you to move forward with accomplishing your financial goals.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
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If you are starting a small business, you’ll need to decide if you want to work with someone else or do it on your own. Here’s what you need to consider. 

If you are thinking about starting a small business, you’ll need to make an important choice. Do you want to get the company off the ground on your own without any help? Or do you want a partner to work with you?

Both options have pros and cons that are worth considering. Consider them to make an informed choice about what’s right for you.

Benefits of starting a business on your own

Here are some of the biggest benefits of starting a company by yourself and not working with a co-founder:

You get to keep the profits: You don’t have to share the money you make with anyone else (although, of course, you do need to pay employees if you have any). It can be easier to make enough profit to support one founder instead of two. You get to make the decisions. The success or failure of your company rests on you alone. You don’t have to take other people’s opinions or ideas into account or risk disagreements with someone who may not perfectly share your vision. The process of getting started can be simpler. You don’t need to find a co-founder and create a legal agreement, as you would if you were starting a business with someone else. You can begin your operation and grow your business at your desired pace.

Because it can be so much simpler and easier to go it alone, around 73% of people who start businesses operate as sole proprietorships and don’t have a partner or other co-owners working with them, according to U.S. Census data.

Disadvantages of starting a business on your own

There are some huge downsides to starting a company by yourself instead of with others. Here’s what they are:

You have to share your profits. You and your partner both need to be able to take money out of your business bank account to provide you with the income you need to survive. Since there are two co-founders to pay, your company has to generate more revenue to be profitable. You’ll be taking on all of the financial risk. If you have a partner, you can split the cost of getting the business up and running. If you don’t, you’ll either need to pay all of the money necessary to fund the business out of pocket or get a loan or investors (who would then get a share of the profits). It’s harder to come up with the money without help and you stand a greater chance of suffering big financial losses. You won’t have anyone to help you succeed. You will have to rely on your own skills rather than having a partner come to the table with their own talents and ideas. You’ll also likely need to put in more working hours, since you won’t have someone to share the load with.

For many people, the pros outweigh the cons — especially because it’s not always easy to find someone you want to go into business with, as this is a major intermingling of your personal and financial lives. But you’ll need to carefully consider both of these advantages and disadvantages when you decide which approach is right for you.

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Finding the best rate on a personal loan can save you thousands. Keep reading to learn how to approach rate shopping. 

If you’re going to take out a personal loan, you’ll want to be sure you get the best possible rate. After all, the higher your interest rate, the more it’s going to cost you to borrow and the harder it will be to pay back your loan over time.

You should get multiple quotes and shop around to ensure you keep the monthly payments coming out of your checking account as low as possible. But how do you do that? Just follow these simple steps.

1. Decide on your desired loan terms

The first key step to shopping around is to decide how much you want to borrow and what your desired loan term will be. You need to decide this first, so you can:

Make sure you find a lender offering your desired repayment timeline and that will allow you to borrow the amount you want. Lenders have different minimum and maximum loan requirements and different timelines, so there’s little sense in applying with a lender that won’t offer the loan you’re looking for.Compare loans accurately. The amount you borrow and the loan term you choose is going to affect your interest rate. It makes sense to get quotes for the actual loan terms you’re looking for, so you can get a realistic assessment of what the loan will cost.

You can decide how much to borrow based on what you’re getting the loan for. For example, if you’re borrowing for a home improvement project, get quotes from your contractor to see how much you need to borrow. Your loan term, on the other hand, could be shorter if you want to become debt-free sooner and keep total interest costs down, or longer if you want lower monthly payments and don’t mind paying more over time.

You can use a personal loan calculator to get an idea of monthly payments for your desired loan amount at different loan terms so you can decide what makes sense for you.

2. Get quotes from at least three lenders

The next step is to get quotes from different lenders. You should try to get at least three quotes to get an accurate picture of what rate you should be charged. Try to find a lender that’s going to give you a quote without a hard credit check. If you get an inquiry on your credit report, this can adversely affect your credit score and actually make borrowing more expensive going forward.

When you get quotes, input the loan amount and loan terms that you decided on so you can get an accurate picture of exactly how much the lender would charge for your specific loan.

3. Look for lenders that cater to borrowers like you

It’s best to get rate quotes from lenders that would actually give you a loan. Lenders have different qualifying requirements. For example, while some offer loans only to very well-qualified borrowers, others have less stringent requirements.

If you have great credit, you’re going to get the best rates from a lender that is selective. If your credit score isn’t as strong, look for lenders promising affordable options even to people without perfect credentials.

4. Compare key terms to decide on the right loan

Finally, when you get quotes, be sure you compare all of the terms of the loan, including:

Any origination fees you’ll be charged upfrontThe annual percentage rate (APR), which reflects total borrowing costs each yearWhether there are prepayment penaltiesThe timeline for loan repaymentThe amount you’re allowed to borrowHow quickly your loan will be funded

By looking at all of these criteria, you can successfully find the right personal loan for you. Then you’ll just need to apply for it, receive your funds, and begin paying back the loan on schedule.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Impulse spending, not prioritizing savings, and carrying credit card debt could all contribute to financial insecurity. Find out how here. 

You deserve to be financially secure.

Sometimes, that’s really hard if you aren’t making enough money or if you live in a high cost of living area. When there are circumstances out of your control, there’s little you can do but try to wait it out for things to improve or look into government programs that can help.

In other cases, though, it’s not circumstances, but rather your habits that keep you from having enough money in your bank account to feel financially comfortable. In particular, here are four habits that could leave you broke.

1. Impulse spending

Impulse spending can be a major financial mistake that leaves you with too little money. And it’s a common mistake. One Slickdeals study found that impulse spending averaged $314 monthly per person in the U.S. That’s almost $4,000 a year in wasted money that you can’t use to build your nest egg. And, these impulse purchases may not even be for items you really value, but instead could just be purchases made out of convenience.

To curb your impulse spending, consider instituting a 24-hour rule. If you see something you want to buy that’s not on your shopping list, wait at least a day to purchase it. This will give you time to think about whether it’s actually something you want or just something you’re buying because it happens to be at hand.

2. Paying yourself last

Paying yourself last is also a surefire way to end up broke. Basically, if you do this, you pay for all of your other expenses first before saving money toward retirement or other big goals.

The problem is, by the time it comes time to transfer money into your brokerage account or savings account, there’s a good chance there will be none left. Instead of putting your own security last, make a budget where you treat contributions to your savings account as a fixed expense. Treat saving as a must-pay bill and work your discretionary or fun spending around it.

Once you’ve figured out how much you can afford to save while still covering other necessities, set up automatic transfers of that amount of money into your savings or investment accounts so it can work for you.

3. Carrying credit card debt

Credit card debt is simply too expensive to be a reasonable option. The average interest rate on credit cards is 20.68% as of May 2023. If you owe $1,000 at that rate and you make a minimum payment of 2% of your balance, it would take you 219 months to repay what you owe and you’d make total payments of $3,543.97 — more than three times the original amount you borrowed.

If you are tying up monthly income in credit card payments for 219 months and tripling the cost of all you charge, it’s inevitable you’ll feel like you’re broke forever. Instead, commit to paying off your card ASAP. You can consider refinancing using a personal loan or balance transfer to reduce the rate you’re paying on your debt and then make extra payments of as much as you can to free yourself from this burden and use your money for better things.

4. Increasing your spending as your income goes up

Finally, if you increase your costs each time your income increases, you’ll never get ahead because you won’t be using your money to build wealth. You’ll just get used to your new standard of living and start to feel broke again when you can’t set cash aside for bigger goals.

Instead, when you get a raise, put at least half the amount into savings. You won’t miss the money if you do this immediately when you get your salary bump, because you’ll never get used to having it in the first place.

Fortunately, all of these habits are easy to break. Start working on developing new, better approaches to money management today if you’re tired of being broke all the time.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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A higher mortgage interest rate could cost you a lot of extra money over time. Here’s how much interest you might pay if you borrow at a high rate. 

If you are buying a house right now, you should be aware that mortgage interest rates are pretty high. Although they hit record lows during the pandemic, they have been steadily climbing ever since and recently hit a 23-year high.

The big question you may have is, just how big of an impact will this have on your finances? How much does a higher mortgage rate actually cost you in the end? Here’s the answer to this question, so you can make an informed choice about whether to move forward with your home purchase now during this time of high rates.

The cost of a higher rate

To understand just how much a higher mortgage rate will cost you, take a look at the table below. It shows the monthly payments and the interest that you would pay for each $100,000 of mortgage debt if you took out a 30-year loan at different rates.

As you can see, a higher rate costs you a lot of extra money. Your monthly payment could be hundreds of dollars per month more if you get stuck borrowing at 8.00% instead of 3.25%. And for each $100,000 you borrow, you could pay over $100,000 in extra interest costs over the life of the loan. That’s a huge amount of money that you cannot do other things with, like investing it for your future.

Should you get a mortgage at a high rate or wait?

The reality is, mortgage rates at 3.25% are long gone and no one can predict if or when rates might drop to that level. In fact, rates could just as easily keep going up for the next few years rather than coming down.

If you decide you’d rather wait until rates fall, you could find yourself waiting a long time to get a mortgage loan — potentially years. During that time, you could miss out on property appreciation, meaning homes could be more expensive when you go to buy. You’ll also be missing the chance to start paying down your mortgage and building home equity, and will just be paying rent for many extra years instead.

If, on the other hand, you purchase a home now when rates are high, you would have the chance to refinance later if they do fall. In other words, you aren’t locked into your high-rate loan forever. You could borrow at today’s rates, and if rates decline, you can refinance later — but if rates go up, you’ll be locked in at today’s costs and won’t have to pay even more in the future.

You do need to make sure you can actually afford the costs of your home loan. You should keep your costs below about 25% of your income — even if that means buying a smaller, cheaper house. But if you can do that and you are otherwise in a good financial position to get approved by a mortgage lender to buy a home (which means you have decent credit, a down payment, and some savings), then high rates shouldn’t necessarily be a dealbreaker despite the added costs they come with.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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