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5 Tips to Manage the Variable Costs in Your Budget

By Kathryn Hauer, CFP, EA

Learn more about Kathryn on NerdWallet’s Ask an Advisor

It’s a good idea to have a budget, even if it’s an informal one. Some of us do pretty well with the fixed-cost part of the budget. Fixed costs are those that stay the same each month, like your rent or mortgage payment, cable package, gym membership, cell phone bill, car payment, the dating service you signed up for and can’t get out of. You know you’re going to have to pay the same amount each month, so you plan for it and cough it up regularly.

Your variable costs are harder to nail down, and those are the ones that can really blow your budget. A month of dining out a lot, buying a wedding present, replacing a muffler or paying your property tax bill, and your variable dollars are gone and then some.

These five tips will help you manage your variable expenses so you can stay on budget:

1. Get the most enjoyment for your money

You’re pretty much committed to your rent, but you’ve got leeway in what you do with your other money each month. If you really enjoy that Starbucks every morning, it’s probably OK to get it. The first sip, and the 30 sips after that one, make you feel good — and feeling good is one of the key reasons we earn and spend money. However, other things you spend on may be more from habit than for pleasure. You might actually prefer bringing your lunch from home rather than eating yet another dejected hamburger from the work cafeteria, thereby reducing a variable expense. Evaluate your purchases and make sure they give you pleasure equal to what you spend on them.

2. Pause before you purchase

One of the secrets to staying slim is to be mindful about what you eat. You’re supposed to ask yourself whether you really want that bag of M&M’s or whether an apple would be just as satisfying. (Yes, I do; no, it wouldn’t.) You can try to whittle down your expenses in the same way. Before you buy something, think about whether you really want or need it. Sometimes the act of pausing to think is enough to keep you from swiping your credit card.

3. Plan for seasonal expenses

It’s smart to look at the year ahead rather than just the month. Some expenses hit only every quarter (SiriusXM radio) or twice a year (dental cleaning copay). Other months offer the promise of reduced variable expenses (a week with generous in-laws at their lake house) or increased costs (because everyone in your family happened to be born in February). Acknowledging and accounting for the natural and regular seasonal variation in your expenses will help you better prepare for them, and may allow you to reduce them. 

4. Put your spending in perspective

Another great idea is to think about what you really want in terms of how much money you make. In our family, we say, “I like this sweater, but not $40 worth.” Or you can evaluate a dinner out or other expense based on the hours you’d work to pay for it. For instance, say your hourly rate after taxes is $18. A dinner charge of $80 means about four-and-a-half hours on the job for you.

5. Track your expenses

Part of the problem with variable expenses is tracking them accurately. You know how much the rent is, but you may not be aware of how much you’re really spending on food, toiletries, gas, travel, gifts and the many other expenses that crop up. Advocacy site America Saves recommends keeping a record of expenses. You can use the simple, old-fashioned method of writing down your variable expenses in a notebook for a month or two, or you can go higher-tech. Use “Notes” on your phone or a mobile budgeting app like Mint or one of the many others NerdWallet recently reviewed.

Slow and steady wins the race

To reduce your variable expenses successfully, you’ll need to pay attention to what you spend each day. That exercise can be tedious. It’s tiresome to have to watch, count and restrict yourself every day. However, over time your carefulness will come more easily and you’ll be more aware of the habits that increase your variable spending — and how to change them.

Kathryn Hauer, a certified financial planner, adjunct professor at Aiken Technical College and financial literacy educator, is the author of “Financial Advice for Blue Collar America.”

5 Healthy Money Habits to Teach Your Kids

By Kurt Smith

Learn more about Kurt at NerdWallet’s Ask an Advisor.

It’s never too early to start teaching your children healthy habits, and that includes financial ones. From an early age, children begin to observe their parents in all areas of life, including their spending and saving and how they talk about money. Kids pick up on our attitudes about money just by watching us.

Start teaching your children healthy financial habits at a young age so they can begin to grasp and practice them early in life. Teaching these habits now will help your children become financially wise adults.

You can use everyday experiences to instill financial awareness and smarts in your kids. Here are five money-related habits that you can start teaching them right now. The first two can apply to very young children, while the last three are probably best with children 8 and up.

1. Model good financial behavior

Children watch their parents and replicate many of their habits. What are your children learning from you about money? Be mindful of your spending around your children. Are you and your partner always getting the newest gadgets, cars or items for the house? Do you eat out a lot as a family? If so, your children are likely to develop an “I want it, I can have it” financial attitude, which could lead to some painful financial mistakes. Practice shopping on a budget, using coupons at the grocery store and making home-cooked meals early on. Even if your children are young, they notice these things and will learn to value money.

2. Make them wait to buy things they want

Learning how to delay gratification is a much-needed skill in today’s “have it now” society. Teach your children from an early age that when they go to the store with you, they don’t always get to leave with something. If they can’t stop talking about that new toy they want, tell them they can ask for it for their birthday or Christmas, or let them earn money by helping out with chores around the house. Through this, kids will learn discipline with spending and that they don’t always get to buy something when they want it. Once they start bringing home their own paycheck, it won’t be as likely to burn a hole in their pocket.

3. Teach them to save for the long term

A great way to teach kids about saving is with the rule of thirds. When your children get an allowance or money for their birthday, have them put one-third into a long-term savings account like a 529 college savings account and one-third into a savings account for a bigger purchase like a bike or iPhone; the final third may be spent immediately. Let them go to the bank with you and deposit the money so they feel responsible for it. Show them the online bank statements each month and how their money is growing with interest. You can help them set goals for larger items they may want to buy or save toward, such as a new bike, a play kitchen or even a trip to Disneyland.

4. Teach them how to compare price, features and quality

You can take your children shopping with you and compare prices with them on a variety of items so they see the value in what you can buy. Show them two shirts at different prices and explain why they’re priced differently (material, sale or brand name). Take them to the grocery store and show them how the same food item can have two different prices and let them help you decide which one to buy. When you go shopping for back to school, set a budget and have them get the clothes they need — within that budget. Teaching them about comparison shopping while they’re young will help make it a habit, so it becomes automatic as they get older.

5. Let them make decisions and learn from their mistakes

If your child saves up enough money for something you think he’ll regret buying later, let him buy it anyway. Kids will remember spending their savings on a toy they used only a few times and may make different choices in the future because of that painful lesson. It’s better for them to learn consequences now than when they’re older and the consequences are much greater.

Solid foundation

Teaching kids healthy money habits when they’re young will help ensure they become financially responsible adults. They can build on that solid foundation from childhood as they start to learn about credit, interest rates and smart borrowing. Giving them the building blocks early on will allow you to reinforce increasingly complex and important lessons as they grow. Helping your kids build healthy money habits is one of the best things you can do for them as a parent.

Kurt Smith is a financial and relationship counselor at Guy Stuff Counseling and Coaching.

10 Smart Money Moves That Take 10 Minutes


Whatever your financial goals — from building a nest egg to flying the coop for a dream vacation — you’re only 10 minutes away from being a step closer. Here are 10 quick ways to get your personal finances in order.

1. Bump up your 401(k) contribution

Contributing just 1% more of your paycheck toward a 401(k) will add thousands to your retirement savings. Want to squirrel away money even faster? If your employer matches contributions, increase yours to the maximum amount it will kick in. Otherwise, you’re leaving free money on the table.

2. Start an emergency fund

The median American household has less than a month’s worth of income in liquid savings, according to the Pew Charitable Trusts. That’s a scary position to be in if financial disaster strikes, such as a major medical problem not covered by health insurance.

Prepare for financial roadblocks by opening a savings account for emergencies. Arrange regular transfers from your checking account to ensure your rainy-day fund grows every month.

3. Fine-tune your tax withholdings

If your withholdings — the income tax removed from each paycheck — are too low, you could owe more at tax time than expected. Too high, and you’re essentially loaning the IRS money that could be earning interest for you elsewhere.

Contact your human resources department to adjust withholdings on your W4. The IRS withholding calculator can help you plan for your circumstances.

4. Set up overdraft alerts

Accidentally outspending your checking account is easy, and the accompanying fees can be a budget killer, especially if you buy several items while in the red. NerdWallet found maximum one-day penalties to be above $200 at several banks.

To avoid this pitfall, log in to your bank account and elect overdraft alerts. If your funds dip below a certain amount, you’ll get a warning text — your cue to stop spending.

5. Download your free credit report

Having poor credit can cost you, in the form of expenses such as higher car insurance and mortgage rates.

You’re entitled to a free credit report from each of the three major credit bureaus every 12 months through AnnualCreditReport.com. Many credit card issuers also offer customers free FICO scores, making it easy to find out if your credit could use some TLC.

6. Seek late-payment forgiveness

Kicking yourself over missing a credit card payment? Although card issuers don’t advertise it, they may waive your late fee if you ask nicely, especially for first-time flubs.

7. Take a breath before you buy

Studies show the chemical high of shopping often outweighs the actual satisfaction from impulse purchases — as if the seldom-worn duds hanging in your closet weren’t proof enough.

Next time you feel the pull of the “buy now” button, try lifting your spirits another way first. Meditate, have a snack, go outside. You may be surprised how unnecessary that shiny new item seems afterward.

8. Shop at the FSA Store

Contributing to a flexible spending account is a great way to earmark money for medical costs during the year. But what if December comes and you’ve got a bunch of money still sitting in the account?

Rather than forfeit unused money at year’s end, burn up your remaining FSA bucks at fsastore.com — an online marketplace where you can stock up on sunscreen, bandages, contact lenses and other items.

9. Double-check your life insurance beneficiary

Life insurance policies typically last decades. A beneficiary you listed 20 or 30 years ago may not still be the person you want receiving the payout — for instance, if you named your spouse as the original beneficiary but have since remarried. After such a hefty cash investment, it’d be a shame to see the payoff inadvertently go to the wrong person.

10. Identify your no-fee ATMs

Settling for the first ATM you find is tempting when you’re on the go, but fees can add up fast. Consumers cough up nearly $5 for every out-of-network ATM transaction, on average, according to 2016 data from Informa Research Services.

Here’s a better option: Go to your bank’s online ATM locator or mobile app to scout no-fee machines near your usual haunts. Credit unions and small or online banks often reimburse fees at affiliate ATMs, too, which are hard to identify on your own.

Alex Glenn is a staff writer at NerdWallet, a personal finance website. Email: aglenn@nerdwallet.com.

This article was written by NerdWallet and was first published by USA Today.

Mortgage Rates Today, Wednesday, Oct. 19: Upward Trend; Millennials May Change Homeownership Rates

Thirty-year and 15-year fixed mortgage rates notched up a bit, while 5/1 ARM rates inched back on Wednesday, according to a NerdWallet survey of mortgage rates published by national lenders this morning.

Mortgage Rates Today, Tuesday, Oct. 19 (Change from 10/18) 30-year fixed: 3.73% APR (+0.01) 15-year fixed: 3.12% APR (+0.01) 5/1 ARM: 3.60% APR (-0.02) Shifting demographics could improve future homeownership rates

Predicting the future of homeownership in America is no science; there are factors that even the experts can’t be sure about. But Sean Becketti, vice president and chief economist with Freddie Mac, said in a news release on Monday that the pessimistic projections we’re seeing may not be warranted, despite the fact that we’re currently at a half-century homeownership low — less than 63 percent.

“This decline in the homeownership rate has triggered debate among housing experts,” Becketti said. “Of particular concern is the pronounced drop in the homeownership rate in demographic groups that historically have had lower-than-average homeownership rates.” African-American homeownership is at 41.7 percent, down from a 2004 high of 49.7 percent, according to Becketti.

Millennials may boost the rate once more of them start having families. They’re more diverse than their parents’ generation, which could mean an increase in minority homeownership. Seventy-three percent of baby boomers are non-Hispanic whites, while 59 percent of millennials are non-Hispanic whites, according to Becketti.

“The factors accounting for the lower homeownership rates of nonwhite demographic groups may be overcome,” Becketti said. “The income and education gaps that are responsible for some of these differences may be narrowed or eliminated as the U.S. becomes a ‘majority minority’ country. And the mortgage market may shift in ways that chip away at the remaining gaps — the ones that can’t be explained by income or education and that highlight constraints on access to credit.”

A newly released consumer housing trends report from Zillow Group backs up Becketti’s stance:

“Half of homebuyers in the U.S. are under 36, meaning a new generation — millennials — is shaping the future of real estate,” the study said.

The study also points to millennial diversity. “While only 9 percent of all homeowners are Hispanic, nearly 15 percent of the millennials buying homes are Hispanic — reflecting the changing demographics of the American middle class.”

Homeowners looking to lower their mortgage rate can shop for refinance lenders here.

NerdWallet daily mortgage rates are an average of the published APR with the lowest points for each loan term offered by a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

Michael Burge is a staff writer at NerdWallet, a personal finance website. Email: mburge@nerdwallet.com.

Mortgage Rates Today, Tuesday, Oct. 18: Another Climb; Homeownership Out of Reach for Many

Thirty-year fixed mortgage rates held steady, while 15-year fixed and 5/1 ARM rates rose on Tuesday, according to a NerdWallet survey of mortgage rates published by national lenders this morning.

Mortgage Rates Today, Tuesday, Oct. 18 (Change from 10/17) 30-year fixed: 3.72% APR (NC) 15-year fixed: 3.11% APR (+0.02) 5/1 ARM: 3.62% APR (+0.11) Survey: Student loan debt, affordability hamper homeownership

Homeownership is still an important part of the American dream, say 89 percent of adults surveyed by NeighborWorks America, a nonprofit that works in affordable housing and community development.

But many Americans are still struggling to reach their goal of owning a home. Student loan debt seems to be a contributing factor.

According to the survey, 30 percent of adults knew someone who put off purchasing a home due to the burden of student loan debt. This number is up from 28 percent last year and 24 percent in 2014. Fewer student loan debt carriers said their debt was “somewhat or very much” an obstacle to homeownership compared to last year — 53 percent to 57 percent — but the number has risen from 49 percent in 2014.

Overall affordability is also an issue among those who wish to buy a home. Less than half of the survey respondents said that where they live is affordable for first-time homebuyers, while 56 percent said that rent prices are too high for people to save up for a home in their area. More than half of nonwhite renters surveyed said that rent is too high where they live, making it difficult to save for homeownership.

“With the homeownership rate at the lowest point in decades, and minority homeownership plunging even further, these data signal a weak homebuying market going forward, despite near record-low mortgage rates and broad-based national income growth,” Paul Weech, president and CEO of NeighborWorks America, said in a news release last week.

Homeowners looking to lower their mortgage rate can shop for refinance lenders here.

NerdWallet daily mortgage rates are an average of the published APR with the lowest points for each loan term offered by a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

Michael Burge is a staff writer at NerdWallet, a personal finance website. Email: mburge@nerdwallet.com.

Where to Get a Personal Loan

The best place to get a personal loan may be your bank or credit union, but it also could be an online lender or through a 0%-interest credit card.

You need to know your credit scores and research your options ahead of time to ensure you get the best rates and terms available. The place with the best rates for a good credit risk might not be the best for someone whose credit is only average.

Expect to pay much higher interest rates for a personal loan than for a mortgage or a car loan. Those are secured loans, backed by an asset the lender can seize if you don’t make your payments. Most personal loans are unsecured by collateral, backed only by your signature and good name.

The better your financial track record, the wider your choices and the lower your rates.

Your credit determines where you borrow

Where to look for a personal loan

How to compare and choose a lender

When personal loans make sense

Your credit determines your options

The best credit risks (FICO scores 720 to 850) are almost always better off with a 0% introductory rate credit card than a personal loan. But any lender would be happy to have you as a customer, making large loans available at its lowest rates.

Good credit risks (690 to 719) who don’t qualify for a no-interest credit card typically find that a personal loan offers a lower interest rate than a standard credit card can offer.  You may not get the lender’s very best rates and you may not qualify for the largest loans, but you should be able to find a loan easily.

NerdWallet is a free tool to find you the best credit cards, cd rates, savings, checking accounts, scholarships, healthcare and airlines. Start here to maximize your rewards or minimize your interest rates. NerdWallet Get Your Free Credit Score Get your free score every week.Set goals and see your progress.Signing up won't affect your score. Get your credit score

Average credit risks (630 to 689) can be good candidates for personal loans at reasonable rates, especially if they have substantial income, positive cash flow or a lengthy credit history.  You’ll pay higher rates, and you may face a higher loan-origination fee. But your credit score may exclude you under some lenders’ underwriting guidelines.

Bad credit risks (300 to 629) are unlikely to qualify for an unsecured personal loan at favorable rates on their own. Several online lenders consider additional factors — such as a co-signer or earnings potential — in making their underwriting decisions. Bad-credit borrowers, if they qualify, will find rates at the upper ends of lenders’ ranges, sometimes as high as 36% APR.  Origination fees may be steep, and the size of the loan may be restricted. Some lenders may offer you the option of a secured personal loan instead, where you pledge your car or a financial account as collateral.

Unfortunately, the alternatives that don’t check your credit at all may be worse: High-interest installment loans, title loans and payday loans have effective interest rates of 300% or even higher. Almost any other choice — a loan from family, a part-time job — is preferable.

Some lenders have no minimum credit score to qualify for a personal loan, but that does not mean they do not look at your credit. The only difference is that a low credit score by itself is not a disqualifying event. Such lenders may look at your income, education level and college major in conjunction with your credit file. [Back to top]

Where to look for a personal loan

Start with your local community bank or credit union. If you’ve been banking there for a while and the institution values you as a customer, you’ll get the best rate and loan amount. Credit unions typically offer lower rates because they are not-for-profit organizations. In either case, you probably will have to visit the bank or credit union in person to sign loan paperwork.

Compare their rates with those offered by online lenders, which conduct their business entirely online.  Prime customers may see rates just as low or lower than those available from local banks or credit unions.

Online lending comes in a few different forms.

There are peer-to-peer lenders, such as Prosper and Lending Club, which offer both competitive rates and generous loan amounts for prime customers.  Your loan is funded by investors — often by several — whose return is determined by how much risk they are willing to accept. The lender handles the paperwork and dispenses the payments.

Other online lenders draw their funds from more traditional sources but still offer unique twists. They may offer perks like flexible payments, no fees, a break on making payments if you lose your job, or advice from financial counselors.

Most online lenders will quote you an interest rate and terms during a preliminary application process that does not involve a “hard pull” of your credit reports, which can damage your scores. (A soft pull is just an inquiry and doesn’t hurt your credit; a hard pull is an actual application for credit and is noted on your credit report.)

Funds from approved loans are delivered electronically to your bank account, usually within a few days.

If you are looking for a small personal loan — less than $2,500 — you may find that some lenders don’t offer them. A credit union should be your first stop. [Back to top]

How to choose a lender

Shop for rates, but don’t shop only for rates.

The sheer competitiveness of the online personal loan market means lenders try harder to set themselves apart than traditional lenders do, either with lending guidelines that go beyond traditional credit-scoring models or with extras such as debt counseling and unemployment guarantees.

A half-point difference in interest rates on a five-year, $5,000 personal loan will cost an extra dollar or so a month. The flexibility to reschedule a payment, though, might keep you from missing a payment and incurring a late fee as well as a hit to your credit score.

Some lenders may make loans only for specific purposes. Payoff, for example, seeks only customers who want to consolidate their credit-card debt.  And some credit unions will make large loans only if they’re for home improvements. But the vast majority of lenders don’t care what you do with the money. [Back to top]

When to take out a personal loan

NerdWallet recommends personal loans only as part of a larger debt-management strategy — that is, if the loan changes your financial future in a positive way. Don’t borrow just because you can, and don’t borrow to delay the inevitable.

If you are borrowing money to spend it on a car, home renovations or a vacation, there are almost always cheaper options if you have excellent credit, such as a secured loan or a no-interest credit card. And if you have anything less than good credit, take a look at your existing debt and cash flow carefully before borrowing for such expenses.

Take out a personal loan to consolidate your debts for either of these reasons:

  • The difference in payments will allow you to become debt-free more quickly.
  • The difference in payments will help you avoid taking on more debt.

If you can’t meet either of those standards, consider delaying your loan if you can while you make an effort to raise your credit score.

Lastly, if you cannot find a personal loan through a local bank or credit union, or at a competitive rate online, avoid the trap of payday loans and high-interest installment loans. You cannot afford 300% interest rates — no one can.

Instead, consider reaching out to debt counselors through the National Foundation for Credit Counseling and its member agencies. They can give you perspective and advice, and can even help you enroll in a debt-management plan that may reduce your finance charges.


 Image via Shutterstock.

This post was updated. It was originally published in June 2014.

What Brings People to Credit Counseling

People often seek out credit counseling when searching for debt relief options, like debt management programs or bankruptcy counseling. But credit counseling agencies offer other financial education and counseling services as well.

In some cases, people who don’t yet need such intensive debt solutions may still benefit from credit counseling. We asked Thomas Nitzsche of Clearpoint, a nonprofit credit counseling agency and member of NerdWallet’s Ask an Advisor network, about who typically gets credit counseling and how you can decide whether you need it.

What ultimately brings people to credit counseling?

Unfortunately, financial crisis is what traditionally has driven people to seek credit counseling. However, it’s important to keep in mind that most Americans are currently living just one paycheck away from a financial crisis of their own. Recent surveys have found that two-thirds of Americans would struggle to meet a $1,000 financial emergency, while nearly half of us would struggle to cover just a $400 emergency.

In some cases, clients come to credit counseling through their employer, lender or another party. Credit counseling agencies offer financial coaching to the customers of other businesses, so your employer or lender may have a relationship with a credit counseling agency to provide you with free support to keep you financially healthy and to prevent or resolve any financial issues. An example of this type of counseling would be post-modification counseling, which is paid for by your mortgage lender and provided by the credit counseling agency after you receive a home loan modification. Another similar example is early-intervention counseling, where a credit counselor may proactively reach out to you at the request of your creditor if they notice that your finances seem to be slipping.

Who are the typical credit counseling clients?

The average age of those who receive counseling at Clearpoint is 43, and their household budget is short by $134 each month. We also find that participation in every service we offer skews female, with the exception of bankruptcy counseling, at 51% male. In 2015, women comprised two-thirds of our incoming debt management program clients.

At Clearpoint, the average credit card debt of those who seek counseling is nearly $26,000 across six accounts. For those specifically seeking student loan counseling, the average is a staggering $85,000 in debt — a $10,000 increase since 2014. The financial stress in those who seek credit counseling is further evidenced by an average credit score of just 585.

The good news is that, on average, Clearpoint’s credit counselors help their debt management clients increase their credit score by 106 points in 36 months. Reduced stress is reported by 75% of all credit counseling clients after receiving services, and clients frequently tell their counselor that the hardest part of the process was coming to terms with their situation and picking up the phone or going online to make the appointment for counseling.

What tips do you have for deciding whether you need credit counseling?

If you feel you could improve at keeping a household financial spending plan, want to improve your credit score or need help repaying outstanding debt, you are a good candidate for credit counseling. There’s no charge for initial consultations, so you have nothing to lose but 60 to 90 minutes of your time.

Credit counselors won’t give legal or investment advice, but if you find yourself stressed or unable to save as much as you would like, talking with a counselor accredited with the National Foundation for Credit Counseling can help you refine your budget and develop short- and long-term financial goals. If you have never reviewed your credit report or if you don’t know your credit score, a credit counselor can help you understand it and, in most cases, provide your FICO score for free.

Those concerned with making their next credit card or mortgage payment, or who have already defaulted on their debt, are obviously good candidates for seeking advice from a credit counselor to help them get back on track and resolve their situation. If you have been turned down for a debt consolidation loan on credit card debt, you could be an excellent candidate for a debt management plan through the credit counseling agency. We find that on average, these plans reduce interest rates by half, total monthly payments by 20%, and last around four years.

Thomas Nitzsche is the media relations manager of Clearpoint Credit Counseling Solutions.

When to Ditch Your State’s Health Insurance Exchange

Since the rollout of state and federal “Obamacare” exchanges three years ago, health plan choices have dwindled in many areas. The Affordable Care Act marketplace was intended to provide a variety of options for those buying individual health plans. But in many states, choices for 2017 coverage will be drastically reduced.

Aetna recently announced plans to pull out of 11 of 15 states’ health insurance exchanges for 2017. UnitedHealthcare, Humana and others have already made similar exits, leaving just one or two insurers to choose from in many areas. Sixteen of 23 health insurance co-ops, which are nonprofit health plans meant to be an alternative to commercial insurers, have failed.

The state and federal exchanges play an important role for those who don’t get insurance elsewhere. Most people who shop on them qualify for tax subsidies to make premiums affordable — 85% of them, according to the Department of Health and Human Services — and using the exchanges is the only way to get that help. Open enrollment for 2017 plans starts on Nov. 1 and runs through Jan. 31.

But if you’re among the 15% who make too much money to qualify for subsidies, there are some compelling reasons to explore your other options.

More plan options, similar prices

Off the exchanges, many shoppers will find more plan options at similar prices. “If you don’t qualify for subsidies, it really doesn’t make sense most of the time to even bother with the exchanges,” says Tim Tracy Jr., a Connecticut insurance broker. Tracy is licensed to sell both ACA plans and off-exchange plans.

In many states, the off-exchange market is much larger than what’s available on the exchanges. If exchange plans don’t have the benefits you need, or you’re willing to pay more for better benefits, you might find better options off your exchange.

Non-ACA health plans still have to use the “metal” tier system that defines a plan’s value — bronze, silver, gold or platinum — so you can compare both types. A silver plan, the most popular tier on exchanges, pays about 70% of costs for the benefits it covers.

But within those tiers, benefits can vary, and the only benefits that matter are those you’ll use.

For example, look at formularies, the lists of medications insurers will pay for. If you need a specialty drug and it’s not on an ACA plan’s formulary, you might find it on a non-ACA formulary with similar premiums. Or you may only find it on an expensive non-ACA’s plan’s formulary. If your drug is also expensive, you’ll likely find it’s worth a higher premium to have it covered.

Similarly, if you have a chronic condition, you could save a lot of money by choosing a health insurance plan with higher premiums because it will pay a larger portion of your medical bills. Higher premiums also typically translate to lower deductibles, so you’ll pay less upfront before your plan starts paying those bills.

When people shop on an exchange, premiums are the largest consideration, followed by out-of-pocket costs, according to the Robert Wood Johnson Foundation. People don’t often consider provider network a high priority, but ignoring the network can cost you.

“A lot of the exchange plans have limited networks, whereas off the exchange we’ve seen much better network access,” Tracy says. That’s because some doctors simply aren’t taking ACA plans from new patients or otherwise.

Networks also include labs, hospitals, urgent care and other facilities. In many health plans, you pay the entire charge or a majority of the bill if you go outside the network. These payments don’t count toward your plan’s deductible or the annual out-of-pocket limits: $7,150 for an individual or $14,300 for a family in 2017.

If going to your primary doctor for a checkup is the extent of your anticipated health care needs, that’s no big deal. But if you need a blood test and your doctor sends it to a non-network lab, or if you’re admitted to a hospital where some providers are out of network, your bills could skyrocket.

Simply put: The larger your provider network, the less you will have to worry about your network.

» MORE: Compare health insurance quotes

Is off-exchange insurance right for you?

If you qualify for subsidies based on your income, the most cost-effective choice is likely to shop on the exchanges — either the federal exchange or your state exchange, if there is one.

You can find out whether your state has an exchange and whether you qualify for assistance by going to Healthcare.gov after Nov. 1, when open enrollment begins, and answering some questions.

If you don’t qualify for subsidies, you can find plans on insurers’ websites, or on independent plan-comparison sites. For personalized assistance, you can contact a broker, but make sure any broker you go to is licensed to sell both Obamacare plans and non-exchange plans.

“It’s important they can do both, because you want that unbiased guidance,” Tracy says.

Lacie Glover is a staff writer at NerdWallet, a personal finance website. Email: lacie@nerdwallet.com. Twitter: @LacieWrites.

This article was written by NerdWallet and was originally published by USA Today.

5 Football Tailgating Blunders Insurance Will Pay For

Football tailgates offer fans a chance to escape the weekly grind and cut loose in the name of bone-crunching tackles and char-grilled meats. But nothing brings tailgaters crashing back to reality faster than game-day festivities gone wrong.

A combustible mix of alcohol, open flames and dense traffic, to name a few factors, can make tailgates ripe for costly accidents and injuries. In many cases, the right insurance coverage can spare you from paying for these mishaps on your own.

Here are five potential tailgating blunders that illustrate why it’s smart to review your insurance game plan.

1. You accidentally grill the car

Covered by: Auto insurance

The play by play: Like end zones and excessive-celebration penalties, grilling and tailgating just go together. But whether you get overzealous with the lighter fluid or accidentally leave hot coals in your trunk, car fires are a looming threat.

If you have comprehensive insurance, your auto policy will pay for a variety of problems not related to car crashes, including fires. Note that comprehensive coverage claims come with a deductible, which is a predetermined amount that insurers subtract from claim payments.

» COMPARE: Car insurance quotes

2. An opposing fan vandalizes your vehicle

Covered by: Auto insurance

The play by play: Ideally, tailgate rivalries would never escalate beyond playful barbs and spirited debates. But the risk of opposing fans, say, spray-painting their team’s name onto your bumper may be another reason to add comprehensive insurance to your auto policy. This coverage will pay to repair damage stemming from vandalism, riots and civil disturbances, among other things, minus your deductible.  

3. You give your buddies food poisoning

Covered by: Homeowners, renters and condo insurance

The play by play: Without ready access to refrigeration, hand-washing stations and other kitchen conveniences, food safety is a major tailgating concern. If you happen to be helming the grill when a bad batch of chicken wings or brats circulates to the crowd, those who get sick might sue you for their medical bills.

If you have homeowners, condo or renters insurance, you may be able to avoid having to pay for others’ food poisoning treatment out of your own pocket. These policies generally provide personal liability insurance, which covers others’ bodily harm that you’re responsible for, up to your policy’s limit.  

» MORE: Understanding homeowners insurance

4. You damage another tailgater’s property

Covered by: Homeowners, renters and condo insurance

The play by play: Say you’re tossing the football around with friends when your best Hail Mary attempt gets away from you, damaging another fan’s expensive speakers. If he or she seeks reimbursement, your home, renters or condo insurance may be able to cover what you owe. The liability coverage in your policy typically will pay for damage you unintentionally cause to others’ property, even away from home.

5. You hit a parked car

Covered by: Auto insurance

The play by play: If you dent another tailgater’s vehicle in your haste to beat the rush home, car insurance kicks in as it would after any at-fault crash. Liability insurance pays to repair damage to the other driver’s vehicle, up to your policy’s limit. Collision coverage, if you selected it, can pay to fix your own car. However, if the damage to your vehicle is minor, it might not exceed your deductible, in which case you wouldn’t benefit by making a collision claim.

Alex Glenn is a staff writer for NerdWallet, a personal finance website. Email: aglenn@nerdwallet.com.



Upstart Personal Loans: 2016 Review

Upstart lends to college-educated borrowers who have thin credit files.

Upstart is a good fit for those who:

  • Have average to good credit scores. The minimum required score is 620, but Upstart borrowers have an average score of 692.
  • Are building credit from scratch. Upstart says it lends to borrowers who don’t have credit scores yet by analyzing their academic history. The lender also accepts job-offer letters from those who are starting out in their careers.
  • Have higher-than-average incomes. Though the company has no minimum requirement, the average income of an Upstart borrower was $97,234 as of October 2016 — considerably higher than the U.S. national median of $53,657.
  • Don’t have high debt-to-income ratios. The average Upstart borrower had a ratio of 18%, according to the company.
  • Want a loan to build technical skills. The lender has partnerships with more than a dozen coding boot camps. If a borrower is accepted into any one of them and wants to take a loan to cover tuition, Upstart waives its requirement that the borrower should have a college degree or job offer to qualify for the loan.
Apply Now Detailed Upstart personal loan review

To review Upstart, NerdWallet collected more than 30 data points from the lender, interviewed company executives, completed the online loan application process with sample data, and compared the lender with others that seek the same customer or offer a similar product.

How to apply

Minimum requirements

Lending terms

Fees and penalties

Learn about personal loans

Upstart’s underwriting process changes depending on each person’s credit profile, says Dave Girouard, the company’s CEO and co-founder.

For example, a recent grad with little or no credit history would be assessed mainly on academic performance, but those factors wouldn’t be as important in sizing up a borrower with years of credit experience, he says.

Upstart doesn’t lend money to borrowers directly. Instead, it charges an origination fee to connect borrowers with accredited investors who fund the loans. All borrowers receive a grade based on their profile. The grade is then used to determine the interest rate on the loan.

Applying for an Upstart loan can take a little longer than the process at other online lenders, based on your background. You can check your potential interest rates in minutes without affecting your credit scores. But if you decide to take a loan, you may need to have additional documents handy, such as your college transcript, SAT scores or pay stubs.

If you’re new to credit, Earnest and SoFi also consider your academic background and job history in their loan decisions. But both lenders typically approve borrowers with excellent credit scores and very high incomes. Pave also considers those with thin credit histories and rewards borrowers who take a loan to improve their career or education with a lower interest rate.

How to apply for an Upstart loan
  1. Fill out a preliminary online application with detailed information about your education and employment. Upstart conducts a soft credit check, which won’t affect your credit scores, to show you rates.
  1. If you’re approved, you can select loan terms that are favorable to you.
  1. Next, you have to provide your bank account information to receive the money and upload documents to verify your identity and income.
  1. You’ll receive a hard credit check, which does affect your credit scores, before Upstart sends you the money. It pulls credit information from credit bureau TransUnion. You’ll receive the loan minus an origination fee. You can modify your monthly repayment amount at any time.

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Minimum requirements for an Upstart loan
  • Minimum credit score required: 620.
  • Minimum gross income required: None.
  • Minimum credit history: None.
  • Maximum debt-to-income ratio: None, but generally 18%.

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Upstart’s lending terms
  • Annual percentage rate range: 6.25% to 29.99%.
  • Minimum loan amount: $1,000.
  • Maximum loan amount: $50,000.
  • Loan duration: Three years and five years.
  • Time to receive funds: Next day; three-day waiting period for education loans.

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Upstart’s fees and penalties
  • Origination fee: 1% to 6% of loan amount, depending on borrower’s grade.
  • Prepayment fee: None.
  • Late fees: 5% of payment amount or $15, whichever is greater.
  • Personal-check processing fees: None.
  • Returned payment fee: $15.

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Before you take a personal loan

Consider other debt consolidation options. An unsecured personal loan isn’t your only option to tackle debt. If you have good credit, you might be able to find a 0% credit card promotional offer. Homeowners might be able to get a home equity line of credit. You should also compare other debt consolidation lenders.

Check your credit report and know your financial strengths. Your chances of being approved for a loan and the interest rate you’ll be offered don’t depend just on your credit scores; they also depend on the length of your credit history, your income and other debts. High debt might outweigh a great credit score, for example, or a low score could be bolstered by a high income.

Learn how personal loans work. All lenders require certain personal information to verify your identity and income and check your credit.

Calculate payment scenarios. Run the numbers on different loan amounts and interest rates to see how the payments might affect your monthly budget.

Have a plan for getting out of debt. Personal loans may help you consolidate debt, but in the long run you’ll need to make a budget that both covers expenses and helps you save for emergencies and opportunities.

Amrita Jayakumar is a staff writer at NerdWallet, a personal finance website. Email: ajayakumar@nerdwallet.com. Twitter: @ajbombay.

Updated Oct. 17, 2016.

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