Money Management

Looking to drum up extra cash? Read on to see which side hustles could put money in your pocket while letting you get fresh air. 

If you’re thinking about taking on a side hustle this year, you’re not alone. As of 2022, a good 40% of Americans had a job they did on the side, according to Zapier.

There are numerous benefits you might reap if you go the side hustle route. First, if your savings account could use a serious boost (which may be the case thanks to inflation), a side hustle could help you pad your bank account without having to cut your spending. And if you’re carrying a nagging balance on your credit cards, a side hustle could be your ticket to paying it off sooner — and avoiding a scenario where interest keeps piling up against you.

But let’s face it — working a side hustle means giving up some of your free time. And the idea of spending even more time at a desk might seem less than appealing.

The good news, though, is that you don’t have to limit yourself to an indoor side hustle that’s boring. Now that spring is in full gear and the weather is getting warmer, there’s ample opportunity to pursue a side hustle that can be done outside. Here are four to consider.

1. Walking dogs

If you like animals and love the idea of getting exercise in the course of earning money, then it pays to look into becoming a dog-walker. You can advertise your services locally and see if any customers bite, or you can sign up for a service like Rover or Wag that connects pet care providers to pet owners.

2. Landscaping

Spring is a time when many homeowners opt to focus on landscaping — things like mulching their trees, planting flowers, and cleaning up unruly shrubs. If you’re handy and have a green thumb, it may be worth looking into weekend landscaping gigs. You might get your hands dirty, but you’ll get to enjoy hours of fresh air, all the while getting paid.

3. Mowing lawns

Many people outsource the task of lawn maintenance to companies or individuals. If you’re willing to put in the time, you can sign up to mow lawns in your neighborhood and pocket some extra cash. Best of all, lawn mowing is a task that typically needs to be done weekly when the weather is warm, so it’s a great way to set yourself up with a recurring gig.

4. Deck and fence painting

At this point, many people are staring at decks and fences that have seen better days. It’s easy to put off deck and fence painting during the winter, but come spring, homeowners tend to run out of excuses. As such, it pays to look for deck and fence painting gigs in your area. Some homeowners might even require both services, giving you a chance to pocket quite a bit of cash.

The idea of being cooped up indoors on weekends hammering away at a side hustle can be demoralizing. So why force yourself into that situation? Instead, look at side hustles you can do outdoors, and enjoy the dual benefit of fresh air and an extra paycheck.

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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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How can one little three-digit number have such a big impact on your financial life? Read on to learn about your credit score and see ways to improve it. 

Credit scores are one of those things many adults talk about — along with inflation and lower back pain. And if you’ve never really considered yours before, you might wonder what all the fuss is about. Who cares about credit scores, anyway? Well, many of the financial entities in your life (such as mortgage lenders, credit card companies, and even auto insurers) sure do.

Financial guru and author Tori Dunlap recently noted on an episode of her podcast, Financial Feminist, that your credit score is “your adulting GPA.” The higher it is, the better chance you have of succeeding in some of the most consequential financial endeavors in your life, like buying a home. Here’s why.

Why does your credit score matter?

Think of your credit profile like the ultimate report card for your finances. All your credit accounts (which include loans and credit cards) will appear on it, and it’s a record of how well you manage those accounts. FICO is the most-used credit scoring model, and calculates your FICO® Score based on five different factors:

Payment history (35%): Have you made your credit payments on time?Amounts owed (30%): How much money do you owe to your creditors?Length of credit history (15%): Do you keep your credit accounts open or close them frequently?Credit mix (10%): Do you have only credit card accounts or also a mortgage loan and maybe an auto loan?New credit (10%): Do you frequently open new credit accounts?

Your credit score figures into nearly every aspect of your financial life. If you want to buy a home and apply for a mortgage loan, the lender will pull your credit and decide your interest rate based on it. The same goes for an auto loan. And if you need a new car insurance policy, yep, the insurer may even look at your credit score and use it to determine your policy cost. In short, your credit score matters. If your score is looking a little lackluster these days, the good news is that there are ways to improve it.

How can you improve your credit score?

First and foremost, a great way to improve your credit score is to pay down any debt you may have. If you have high-interest debt, such as that on a credit card, this will improve your life in a number of ways, including letting you sleep easier at night and freeing up more of your cash to meet other financial goals.

In terms of credit score impact, I can share my own experience. I spent part of 2022 paying off debt, and in the last year, my credit score has increased by over 100 points, taking me to the “Exceptional” range for FICO. The amount you owe to your creditors accounts for 30% of your score, so if you can pay down some debt, it will have a noticeable impact.

Despite the debt, my credit score was in the “Good” range back then, and I credit my exemplary history of making on-time payments on my credit accounts. If you haven’t been so good at making sure your bills get paid on time every month, now is the time to focus on that. Set up automatic payments on your credit card, personal loans, and other credit accounts — that’ll save you from forgetting you have payments due.

Finally, you can improve your credit score by having any errors removed from your credit report. Credit report errors are common; a study conducted by Consumer Reports in 2021 found that more than a third of participants found at least one error on theirs. If you file a dispute with the credit bureau showing the error, you can have it removed, boosting your credit score.

Your credit score may be your adulting GPA, but the good news is that you can improve it at any point in your life. Take the above steps to give your credit score a boost and enjoy lower interest rates on loans, the best auto insurance rates, and perhaps a shot at the sweet rewards credit card you’ve been dreaming about.

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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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You have to make at least a 20% down payment to buy a home, right? Well, no. Read on to learn the benefits (and drawbacks) of putting down half as much. 

It sure isn’t cheap to buy a home, and often the biggest chunk of money you’ll have to shell out in the process is your down payment. Mortgage lenders often require some kind of down payment to buy a home for a few reasons.

Your lender wants to see that you have the financial standing to make your mortgage payments, and having that down payment is proof of means to make payments going forward. It’s also proof that you’ll have a real financial stake in the property from the beginning, as it’s a lot easier to walk away from a home purchase if you start out with little or no equity and thus have less to lose.

It’s actually not the case that you have to make a 20% down payment. This idea comes from the fact that if you put less than 20% down on a conventional mortgage loan, you’ll have to pay for private mortgage insurance (also known as PMI) until you reach 20% equity in the property. PMI payments generally equal 0.5% to 1% of the amount you’ve borrowed and are paid monthly on top of your mortgage payment. There are also other low down payment mortgage options, such as government-backed mortgages (those guaranteed by the FHA, USDA, and VA). In some cases, you may not need to make any down payment at all to get one of these.

As the housing market cools from its peak earlier in the COVID-19 pandemic, the typical down payment has decreased. Redfin reported last month that in January 2023, the median down payment for homes sold was just 10% of the purchase price. So if you’re hoping to buy with less down, you’re definitely not alone. Let’s take a look at the perks and drawbacks of making just a 10% down payment on a home purchase.

Why you may want to buy with less down

Owning a home can be a wonderful source of stability for you and your family if you’re financially and emotionally ready to buy. As such, it’s likely a very appealing option to buy sooner rather than later, especially if rent costs in your area keep rising and you’re tired of moving. If you can buy with just 10% down, you’ll get to start building equity faster and sleep better at night knowing that your landlord won’t sell your home out from under you.

If you’re in the fortunate position of having enough money saved that you could make a larger down payment, you may still want to only put down 10%. A home is an illiquid asset, meaning that if you needed cash in a hurry, it wouldn’t be so easy to get to it if you have a lot of money tied up in your home. For this reason, buying a home with all cash also may not be a good idea.

And what if something goes wrong with the home? If you put all your cash into a down payment and leave yourself with an inadequate emergency fund, you’ll have to go into debt to pay for repairs the first time something breaks.

Why you may not want to buy with less down

Remember our discussion about mortgage insurance above? It’s not just limited to conventional loans. If you get an FHA mortgage loan, your down payment requirement will vary based on your credit score (580 and above: 3.5%; 500–579: 10%). But in exchange for that lower down payment, you’ll have to pay mortgage insurance premiums (MIP). One way or another, your lender will get more money out of you. And if you’re in a conventional loan, that 0.5% to 1% of the home’s purchase price could represent a nice chunk of change added on top of an already high mortgage payment, depending on how much your home cost.

If you end up with a VA or USDA mortgage loan, you may not need to make a down payment at all, depending on your lender and credit score. But you will still be responsible for paying upfront and possibly ongoing fees.

A major risk of making a low down payment on a home is ending up underwater on your loan. This is when you owe more than the home is worth.Since home values can and do fluctuate, it’s a real possibility, especially at the beginning of your mortgage term. This only becomes a problem if you need to sell the home; if you’re staying put and can afford your payments, it likely won’t matter that you owe more than it’s worth. Still, it’s worth considering when deciding how much to put down.

Don’t fall for the idea that you must make a 20% down payment to buy a home, as that just isn’t true. But consider whether it might be a good idea to do so anyway.

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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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There’s one key factor that could dramatically affect your odds of becoming a millionaire. Discover what it is and why it’s important. 

What’s the secret to becoming a millionaire? The truth is there are many ways people have accumulated $1 million. But some life choices may significantly increase your chances of having this much success with personal finance. A recent survey found that there’s one key trait, in particular, that nearly 9 out of 10 millionaires share.

Here’s what 88% of millionaires have in common

Ramsey Solutions conducted what it calls the largest study of millionaires ever, with 10,000 participants. It found that 88% of millionaires graduated from college, compared to 38% of the general population. In addition, 52% of millionaires had a master’s or doctoral degree, compared to 13% of the general population.

This isn’t the only research to find a strong link between wealth and level of education. A 2015 report by the Federal Reserve Bank of St. Louis, The Demographics of Wealth, found that families with higher levels of education are far more likely to have at least $1 million. Here was the probability of a family having at least $1 million, based on the highest level of education in the household:

No high school diploma: 1 in 110 (less than 1%)High school diploma: 1 in 20 (5%)College degree: 1 in 4.6 (~22%)Professional/graduate degree: 1 in 2.6 (~38%)

Why education is strongly linked to wealth

The first explanation that comes to mind for why education is linked to wealth is its effect on income. Research on the average American’s income by education level has shown that the average salary rises with a person’s level of education. High school graduates earn just under $40,000 per year on average. Americans with bachelor’s degrees earn a little over $80,000.

However, it’s important to clarify that this doesn’t mean education is the only factor in the amount of wealth a person accumulates. The authors of The Demographics of Wealth pointed out several other contributing factors that aren’t directly caused by having more education.

For example, family background, including parents’ levels of education and wealth, can be a predictor of success as an adult. Highly educated people are more likely to have wealthy and educated parents. That’s something they were born into, not something they attained themselves through their education, and it puts them at a significant advantage. They’re also more likely to receive sizable inheritances, boosting their wealth.

Another factor is assortative mating, which is the tendency for people to marry those with similar characteristics. Educated people tend to marry other educated people. Given that they also tend to earn more, this leads to much greater household incomes. Two people with high school diplomas earning average salaries will have an annual household income of $80,000. Two people with bachelor’s degrees earning average salaries will make $160,000.

The phrase “correlation is not causation” applies here. Yes, most millionaires are college graduates. And there’s a clear financial benefit to staying in school, as it often leads to a higher income. But education doesn’t guarantee you’re going to be wealthy or have millions in your savings accounts. The inverse is true, as well. Even if you don’t have a college education, it’s still possible to become a millionaire, depending on the money moves you make.

What can you do to become a millionaire?

There are a few financial habits most millionaires share that are instrumental in their success. Here’s what Ramsey Solutions found in its millionaire study:

Millionaires are long-term investors. 3 out of 4 said that consistent, long-term investing leads to success.Millionaires are careful about how much they spend. 94% of respondents said that they live on less than what they make.Millionaires avoid high-interest debt. Nearly three quarters said they have never carried a credit card balance in their lives.

For most people, there aren’t any shortcuts to becoming a millionaire. A select few make millions from being extremely gifted in a specific area. Tech geniuses and superstar athletes are two notable examples. Some people also get lucky with ultra-high-risk investments. These are all rarities, though.

The vast majority of millionaires get there by building good financial habits and following them for decades. They spend less than they earn, they don’t take on expensive debt, and they invest regularly. The amount you ultimately save this way will depend on your income, how much you can invest, and how much time you have. Regardless of how much you end up with, these habits will undoubtedly benefit you financially.

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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.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Lyle Daly has no position in any of the stocks mentioned. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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A new credit card could help you earn more rewards on your everyday spending. Keep reading to learn what to do if a new card just landed in your mailbox. 

If you’re a credit card fan, there’s likely no better feeling than getting approved for a sweet new card and having it finally arrive in the mail. I recently added a new travel rewards card to my wallet, and I took the following steps to get it all set up. I recommend doing the same if you just got a brand-new credit card.

1. Set up your online account

First things first! I recommend setting up an account on the card issuer’s website. This will make managing your account (including checking your balance, making payments, and redeeming any rewards you earn on the card) extremely easy. If this isn’t your first card with that issuer, you likely already have an account and should see your new card linked to it when you sign in after being approved and having the card issued.

2. Confirm that you received the card and activate it

When you actually receive the physical card in the mail, you’ll need to confirm with the issuer that you got it and also activate it so it’s ready for use. This could involve calling the issuer or confirming on its website that the card has arrived.

If you know you have a new card on the way, I recommend checking your mail promptly to make sure the card doesn’t sit in your mailbox. This is particularly crucial if you have an unlocked mailbox that anyone outside your home can access. In fact, you may want to opt in for paperless communications from your credit card company to avoid the risk of having mail with your financial information on it stolen from your mailbox.

3. Download the mobile app

No one will twist your arm to download your credit card company’s mobile app, but this is yet another convenient way to manage your account, pay your bill, and access special deals for your card. And best of all, you can access card information from anywhere. I you lose your card and notice it while you’re away from home, you can even report it right in the app.

4. Pay your annual fee, if you have one

If your shiny new credit card is the kind with an annual fee, you’ll likely be charged for it pretty quickly after receiving the card. I’m the kind of person who prefers to pay a bill as soon as it arrives rather than waiting, so when I got my new travel rewards credit card recently, I paid the annual fee as soon as I saw it charged to the account.

5. Add the card to your mobile wallet

If you like using a mobile wallet on your smartphone, such as Google Pay or Apple Pay, now is the time to add that card to it. This is very easy to do, and then you’ll be able to use your credit card via a contactless payment process even if you don’t physically have it with you. Be careful if you’re prone to overspending, as this ease of use could make it more likely that you’ll spend more than you intend to. What’s more, if you have a smart watch, such as an Apple Watch, you can even use your credit card from it!

6. Start using your new card!

You’ve acknowledged receipt of the card, set up your online account, gotten the mobile app, and paid your annual fee (if you have one) — the only thing left is to start using the card. In the case of my new travel card, I immediately made it my new go-to credit card (with a few exceptions, as I have other cards that pay a high rate of cash back on certain purchases).

If you’re hoping to spend enough to qualify for a welcome bonus, it’s a good idea to get started using the card sooner rather than later. Note that it’s best to pay off your card balance in full every month, however, so you can avoid having to pay costly interest charges.

If you’re careful about monitoring your spending and paying off your balance every month, credit cards can be a great way to earn cash back and rewards on your spending while keeping your financial information safer than a debit card can. If you’re eagerly awaiting the arrival of a new card, keep these steps in mind to get the most out of it right from the start.

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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.Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Alphabet and Apple. The Motley Fool has a disclosure policy.

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