If you’re thinking of selling your home, think spring. That’s because the season of blossoming flowers and gentle breezes has traditionally held the designation as the best time of year to sell a home.
Before you start prepping your home for a photo shoot that shows it off in the best light, take a moment to consider your particular circumstances and needs. What makes spring so well-suited for house-hunting? Does the seller benefit from this arrangement, or is it only advantageous to the buyer?
Let’s take a deeper look at the sell-in-the-spring rule so you can make an informed decision about when to put your house on the market.
There are two primary factors making spring an excellent season for selling a home: The weather and the time of year.
The beautiful, mild weather of spring showcases the exterior of your home in all its glory. Your yard will be alive with healthy, green grass, your flowers and bushes will be in full bloom, and your property will be free of unsightly piles of leaves or mounds of melting snow. If you have an in-ground pool, there’s a world of difference between presenting it to a prospective buyer when it’s sparkling under a brilliant sun, or pointing to a dark, covered shadow at the edge of your yard surrounded by windswept branches and ice puddles.
The pleasant weather that typically heralds the arrival of spring also makes it easier for you to tend to repairs and upgrades on your property. The cold and the dark tend to lead to neglect. Plus, it’s a lot easier to paint the picket fence, stain the deck, and power-wash the siding when the weather is mild and sunny.
Aside from delightful weather, springtime also brings the end of the school year. House-hunting in the spring often makes the most sense for families that include school-age children. This way, they can be settled into their new homes and schools before the new school year. By listing your home for sale in early spring, you’re making it available for this entire group of house-hunters.
Finally, spring means longer daytime hours. This can be advantageous for shoppers who work full-time and can only spare time for home viewings in the evenings. You can schedule a viewing as late as 7 p.m. and still enjoy the benefits of a daylight showing.
Do homes listed in the spring really sell quicker and at higher prices? It’s not just hype. There are actually studies proving that houses sold in late spring to early summer are on the market a shorter amount of time than houses listed the rest of the year. Also, they tend to close at higher price points.
Here is a sampling of studies proving this theory: An ATTOM Data Solutions analysis of 14.7 million homes sold over a span of 6 years proved the best month to sell a home is May. Most homes sold during this month closed at 5.9% above their estimated market value when compared with other months.
A Zillow study showed that homes sold during the first two weeks of May tend to be on the market less time than homes sold any other time of year.
According to Realtor.com, homes listed during the spring are 1% less likely to sell with a price cut than homes listed during the rest of the year.
Does this rule hold true for everyone? “Springtime to market” might be a good rule of thumb for most home-sellers to follow, but it does not apply in every case. Here are some factors to consider:
The local market.
If your neighborhood is full of for-sale signs and your home does not have any distinguishing features, you may put yourself at a severe disadvantage by listing your home in the spring. Consider waiting until the market cools off in mid-summer, or even in the early fall months.
On the flipside, if your home has one or more features that set it apart, you’ll want to list it when the neighborhood is full of house hunters, to give it optimal exposure.
Your preferred time to move.
When is the ideal time for your family to move to another town? Pick a date and work backward to decide when to list your home. There’s no way to determine exactly when you’ll close on a listed home, but Realtor.com estimates the average home sale takes 50 days to close after going under contract. Add a month for preparing your home for the market, choosing a selling agent, making any necessary repairs or upgrades, and finding a buyer.
Local climate. Springtime might mean beautiful weather for much of the country, but in some areas, like Southern California, pleasant, mild weather is an all-year-round delight. Conversely, in many northern states, the warmer weather doesn’t set in until early summer, and you’ll want to wait a bit before putting your home up for sale.
Whether you choose to put your house on the market in spring, or you decide you’d be better off waiting until summer or fall, we wish you a smooth sale at the best possible price. Don’t forget to stop by Advantage One to ask about our fantastic home loan options when you’re ready to start searching for a new place to call home.
Have you sold a home in the spring or summer? Tell us all about it in the comments.
As spring deepens and vibrantly colored flowers blossom everywhere, you might be dreaming about a garden of your own. You’ll till the soil, pat the fertilizer into place and plant your young shoots with tender care. You’ll make sure they get just the right amount of sunlight and water, and you’ll be careful to keep out unwanted pests with strong fences and natural pesticides. And you’ll be rewarded with beautiful flowers and fresh vegetables, straight from your very own garden.
But when you hit the stores to start shopping for your garden, the sticker shock can be alarming. There’s so much to buy—and it’s all so expensive! There’s specialized equipment, must-have tools, frequent runs for seeds and fertilizer and a steady supply of weed killers and animal repellents. You might be wondering: Can I really afford to have the garden of my dreams?
Yes, you can! Save on gardening costs this year with these six creative hacks:
1.) Share equipment You won’t be able to care for your yard and garden without the proper tools, but that doesn’t mean you need to break the bank to get all that equipment. Instead, speak to your neighbors about sharing some of your gardening gear. Let your neighbor use some tools you own, like your weed-whacker, trimmer and spreader, in exchange for free use of your neighbor’s gardening tools. If you dare, consider sharing your larger, more expensive tools like a lawn mower and rototiller as well.
To make it easier, consider tending to your gardens and yards on different days of the week so you know you’ll have your equipment available when you need it.
If you and your neighbor both need to purchase a new tool or machine, talk about splitting the cost and then sharing the tool.
You can also work out a bartering system with your neighbors, exchanging extra gardening supplies, like leftover seeds and fertilizer.
2.) Purchase used gear You can save big on gardening equipment by looking for second-hand tools and machines. Check out sites like Craigslist, Freecycle and eBay for quality equipment at bargain prices. Be sure to give the pre-owned tool a test run before finalizing a sale.
3.) Rent equipment Instead of shelling out big bucks on expensive tools you’ll only use once or twice a season, consider renting them as you need them. Home Depot rents out a wide variety of gardening tools at excellent rates, and lots of smaller hardware stores have a similar garden tool rental service during the spring and summer months, too. You’ll have access to quality equipment when you need it at a price you can afford. Plus, you won’t have to worry about storing bulky gardening tools all year long.
4.) Shop the dollar store Before hitting the big chain stores, like Lowe’s and Home Depot, for gardening supplies, check out your local dollar store. You’ll find loads of gardening supplies, like seeds, markers, buckets and planters, at rock-bottom prices in stores like Family Dollar and Dollar Tree.
5.) Shop the sales Like every retail product, gardening equipment and supplies have their season for markdowns and sales, and the wise consumer knows how to time their purchase in order to save big.
Larger gardening equipment, like mowers and tillers, usually sees steep discounts at Memorial Day sale events, making the start of summer an excellent time to stock up on pricey garden tools.
Flowerpots, garden décor, lawn furniture and select plants will retail at blowout prices during the clearance sales at the end of July. If you’re hankering after a new set of Adirondack chairs for your garden, or you want to spruce up your yard with some garden gnomes, this is the time to buy them.
You’ll also see some wilting flowers on sale now; don’t let those drooping leaves scare you. If you find a marked-down perennial past its blooming window, check for strong roots and stems. A firmly rooted perennial planted late in the season might not bring you colorful blossoms this year, but if it’s well cared-for, it will likely recover by next spring and reward you with beautiful, healthy flowers.
Whenever you decide to buy your tools and supplies, be sure to check coupon sites like RetailMeNot and CouponCabin before making a purchase.
6.) Buy seeds Purchasing young transplants is a lot easier and a lot quicker than starting from scratch, but the difference in price can be enormous. You can pick up a packet of flower or vegetable seeds for less than a dollar in many nurseries and through gardening catalogues. You’ll also have a much broader choice of plant when you buy seeds instead of being limited by the store’s pick of transplants. Finally, raising a plant from seedling to vegetable or flower is a uniquely rewarding experience.
Tending a garden and watching it grow is one of life’s last remaining pleasures that remains unaffected by the encroachment of technology. Use these tips to bring your dream garden to life without draining your wallet.
Happy gardening from all of us here at Advantage One!
Your Turn: How do you save on gardening supplies? Share your best tips and tricks with us in the comments.
Q: I’m in the market for a new set of wheels, and the choices are making me dizzy. How do I decide which features to look for in a new car and which to skip?
A: Shopping for a new car can be complicated—but it doesn’t have to be that way. With a bit of research and some time spent determining what’s important to you, you can make a choice you’ll be happy with for years to come. To help you out, we’ve created a list of key features you might want to consider in your new car, as well as a list of features you can skip.
Must-have safety features
360-degree camera: This camera takes the risk factor out of backing up by giving drivers a bird’s-eye view of the car. This way, drivers can see the entire area surrounding their vehicle and check for children and objects in their way.
Evasive steering: Keep yourself safe even in the event of surprises on the road with this handy new feature. Evasive steering will provide you with additional steering support when you’re in danger of colliding with another vehicle and your own steering efforts are not sufficient.
Blind spot alert: This feature alerts the driver when there is an object or pedestrian in direct line of their blind spot.
Forward collision warning: If you’re prone to distraction while behind the wheel, you might want this feature. It provides a visual and/or audible alert when your vehicle is heading toward a forward collision.
Automatic emergency braking: Stay safe with this feature, which automatically applies the brakes when it senses a vehicle in your car’s way. Some systems include pedestrian detection as well.
Automatic keyless entry: This feature was created for those moments when you’re staggering toward your car with armfuls of grocery bags: it automatically unlocks a car’s doors when it senses a nearby fob.
Head-up display: You don’t have to risk swerving every time you want to check out your car’s display. With a head-up display, you can see important information, like your fuel level and speed, right on your windshield. Displays are dim enough so they don’t block your visibility, but clear enough to easily read.
Power tailgate: If you plan on hitching a boat, ATV, or another large vehicle to the back of your new pickup truck or SUV, you might want to shop for this feature, because it lets you lower and raise your tailgate with the push of a button.
Multi-zone climate system: Family road trips are peaceful again with this feature, which allows for different climate controls throughout the car.
Speedy USB-charging outlets: No more unbearable waits for your gadgets to power up! You can now buy a car that charges your device super-quickly.
WiFi hotspot: Stop eating up your phone’s data—just plug into your car’s WiFi instead. Some in-car hotspot services charge a monthly fee after a complementary introductory period, but these tend to be cheaper for unlimited data than a similar data plan through a mobile phone carrier.
Heated steering wheel and driver’s seat: This one is for those frosty mornings when your car can’t get warm quite fast enough.
Wireless charging pad: Leave the wires at home! Just place your phone on one of these pads and it will start powering up. These super-techy gadgets use induction to charge your device and work with most new smartphones. If your phone is aging and won’t charge on an induction pad, you can buy a special case to bring it up to speed.
Home assist device connectivity: Telling your phone to crank up your AC or to shut off your oven is old news. But, did you know you can now do the same for your car’s controls? Some new cars allow you to use remote voice control with home assist technologies, like Alexa, for your car. You can tell the assistant to set the temperature in your car, unlock doors and even get your favorite playlist going while your hands are busy making lunch.
Rear entertainment systems: No more backseat fighting! This feature gives the rear seat of your car a completely separate entertainment system.
Sound enhancement: If you’re an incurable gearhead who needs to actually hear your car revving up, you’ll love this feature. It simulates the performance experience of your vehicle, even in a car that is built to be quiet, so you can listen to your engine roar itself to life.
Android Auto and Apple CarPlay: Leave your phone in the cup holder and avoid dangerous distraction with these features. Both will sync your smartphone’s interface with your car’s infotainment system so you can use the car’s screen for controlling your phone and keep your eyes on the road.
Features you can skip
Bigger wheels and thinner tires: The look might appeal, but the ride will be less comfortable. Plus, your wheels will be more prone to damage from potholes and other obstructions on the road.
Built-in navigation systems: Please don’t pay extra for a navigation system when you know you’re going to use Waze or Google Maps most of the time anyway. Also, most built-in navigation systems require constant and tedious updates.
Lane keeping assist: This feature automatically steers or brakes your car when your vehicle crosses lane markings without turning on a blinker. It sounds tempting, but in real life, it’s more annoyance than convenience. Often, you’ll need to suddenly cross a lane marker for good reason, like moving over for an emergency vehicle or for a cyclist on the shoulder of the road. Plus, according to Consumer Reports, there is no data that proves this feature has any safety benefits for the driver.
[Before you start shopping, call, click, or stop by Advantage One to hear all about our auto loans! We’d love to help you get behind your new set of wheels!]
Did you buy a new car recently? Tell us about the features you chose and why they made it to your list.
You’ve finally finished scrubbing and purging your home from top to bottom in honor of spring. And now, with every surface, closet, and room sparkling clean, you’re starting to see all the areas that could use a facelift. Maybe you’re hankering after a complete kitchen makeover. You might be dreaming of a fresh coat of paint for your bedrooms. Or maybe your window treatments are in desperate need of an overhaul.
The only thing standing between you and your dream home is finding piles of cash for funding it, right?
Maybe not. Lucky for you, you don’t need to spend a fortune this spring to give your house a new look. Read on for our list of home improvement hacks and learn how to upgrade your home on a budget.
1. Cabinet makeover Instead of dropping a ton of money on replacing your kitchen cabinets, you can give a tired kitchen a fresh new look by replacing just the cabinet fronts. You’ll pay a fraction of the price and no one will know it’s your old, shabby cabinets hiding behind those beautiful new doors.
Want to go even lower-cost? Consider painting the front of your cabinet to upgrade the look without spending much money or time. You can also replace those dated cabinet pulls with something nicer and trendier for a more modern look.
2. Cover your countertops with contact paper Granite countertops can be gorgeous, but they’re also incredibly pricey. Instead of taking out a second mortgage for beautiful counters, try covering them with pretty, patterned contact paper. You’ll find loads of granite lookalikes at home improvement stores and you can learn how to apply your knockoff covers neatly from DIY tutorials on YouTube. You might even fool your friends and family into thinking it’s the real thing. But don’t worry: We won’t tell anyone it’s fake!
3. Use PVC pipes for curtain rods Pretty curtains and drapes add a splash of color and personality to any room. You can make your own inexpensive curtains by picking up some fabric from a sewing supply store. The only issue? You’ll need rods to hang up those curtains—and if you need specific measurements and colors, that can get pricey.
Make it happen with this hack: Use PVC pipes instead of curtain rods. You can paint your pipes to match the décor of the room and hang them with inexpensive hooks that fit well. Curtains, done!
4. Create a mirrored backsplash All you need for this fantastic hack is a pack of self-adhesive mirror tiles. These retail for about $15 per 20-tile pack and you can find them online or at a home improvement store. Use your snazzy tiles to create a mirrored backsplash in your kitchen. Decorate with inexpensive decals to up the glam or just leave it bare. The mirrors will give the illusion of greater space and you won’t have to deal with grout and caulking. It’s a super-cheap way to make your kitchen sparkle!
5. Slipcover your sofa If your sofa is hopelessly stained and you’d love to update it, but can’t spare the cash, try covering it in a slipcover. You can find a leather-look slipcover to match the shape of your sofa for $100 or less. They’re not just for protection; the right slipcover will give you an (almost) brand new couch! Make sure you read reviews before purchasing, because quality really makes a difference here.
6. Let the light in Light fixtures can really make or break an area in your home, and you don’t have to spend a fortune to get it right. Walk through your home and take note of the light fixtures that are relics from a past life, paying close attention to highly visible areas. Then, take a trip to a home improvement store or check out sites like Wayfair and Hayneedle for trendy, striking light fixtures. For less than $100, you can give your house an entire new look!
7. DIY paint If the walls in your home desperately need fresh coats of paint, look no further than your local home improvement store. No, you don’t have to be a genuine DIYer to get this right; it’s fairly simple. You’ll find loads of painting tutorials on YouTube, and you’ll only have to spring for the actual paint plus a few supplies. Best of all, when you’re in charge, you can get as creative as possible. Using painter’s tape and your imagination, you can paint funky designs on your walls, like diamond contrasts, vertical and horizontal stripes, or, if you’re feeling really artsy, go for a full-blown mural!
These hacks will make your home beautiful this spring for just a bit of money. If you need more major home improvements that require serious cash, though, we can help. Call, click or stop by [credit union] today to ask us about opening a HELOC or taking out a home equity loan. We can make that happen, too!
Are you making home improvements on a budget? Share your best tips and tricks with us in the comments!
The best way to teach a child financial responsibility is by encouraging her to earn and manage money on her own. As the weather warms and summer nears, there are many opportunities for your kids to pull in some extra money.
If money-making is not on your children’s minds, you may need to direct them toward that line of thinking. The next time they ask you to buy something that’s out of budget, tell them they can earn the money to buy it themselves. As an alternative, suggest that you’ll cover half the cost if they earn the other half. Talk to them about finding a summer job, the work they can do on weekends, or suggest a one-time gig they can initiate.
In honor of Youth Savings Month, let’s take a look at 9 easy ways your kids can earn some extra cash.
1. A lemonade stand
It may be old-fashioned, but kids can bring in good money by selling cups of America’s favorite hot-weather drink. For optimal exposure, let your kids set up their stands near a local yard sale or another neighborhood event. Don’t forget to check local municipality laws to make sure your stand is completely legal.
2. Help a senior
Your pre-teen can be a huge help to a local senior while earning money on the side. Let your child run some errands, take out the trash, clean the litter box or just chat with a lonely senior. If your own parents or in-laws live nearby, speak to them about having your child help them out for payment.
3. Hold a yard sale Spring-cleaning season is the perfect time to host a yard sale on your front lawn. Let your kids be in charge by having them choose the items to feature, set the prices and run the sale. You’ll want to be available to oversee their work and to make sure the prices are fair, but let them make most decisions on their own. Take off your helicopter-parent helmet and let your kids learn lessons that will stay with them for life.
4. Do yard work If your children are old enough to handle a gas-powered mower and can be relied upon to trim shrubs and weed gardens, let them hire themselves out to do yard work. Your neighbors will be glad to have the help, and your kids will be out in the sunshine while earning some money on the side.
5. Help with pets Are your kids animal-crazy? Let them use their penchant for pets to help people with pet-related chores. They can walk dogs around the neighborhood and offer to pet-sit for the afternoon while a neighbor is out. If your child is truly a budding entrepreneur and has the necessary skills, they can even set up a pet-grooming station out in the yard. Let them scrub the neighborhood dogs and cats, brush the hair and trim claws for some extra cash.
6. Be junior tech-support Generation Z kids are practically born holding smartphones in their hands. Let your kids use those skills to help some older folks who may not be as tech-savvy. They can offer to organize digital photos and create albums, assist with data entry and filling out online forms, or help a senior create a Facebook page or learn how to use a new phone or device.
7. Help a mom Your child may be too young to babysit on their own, but they can offer their services assisting a neighborhood mom while she’s at home. Let your child take the kids out to the yard while mom watches from the deck, play with the kids at home while mom does laundry or help them with their summer homework while mom’s busy in the kitchen.
8. Collect recyclables Call up a local recycling plant to find out how much they pay for every pound of recyclable materials. Then help your child gather empty bottles, cans, cardboard boxes and old newspapers to bring to the plant. You’ll be keeping the planet green and helping your child earn some pocket money at the same time.
9. Wash cars Let your child try out her car-washing skills on the family car. Once she’s got the technique down pat, have her offer the service to the neighborhood. Your neighbors will cross another weekend chore off their list and your child will be learning that hard work can really pay off.
Encourage your kids to earn their own money and you’ll be teaching them financial responsibility in the best way possible.
How do your kids earn money? Tell us about it in the comments.
Q: I love browsing my local dollar store, but I often end up spending more than I planned or regretting my purchases. Are dollar stores worth the price?
A: Dollar stores can be tremendous spending traps, but they can also be a great way to snag a bargain. It’s all in how you plan your visit.
Read on to learn how to get the best deal at the dollar store.
Before you start browsing Everything is just a buck, you say. How can you possibly go wrong?
Unfortunately, with that mindset, you might find yourself going way overboard with your spending. Before you set out for the dollar store, create a physical or mental list of what you need to purchase.
Love to throw just-for-fun products into your cart? The dollar store is a great place to do that, so exercise caution. You don’t want to blow tens of dollars on stuff you don’t really need and might never use. Establish a limit of how many of those items you can pick up on your trip before you set out. If you always find yourself pushing your self-imposed limit, only shop with cash so you’re forced to stick to your budget.
What’s hot at the dollar store … Here are some products that are great bargains at the dollar store:
Cleaning supplies: Get clean for less by stocking up on Ajax, bleach, glass cleaner, scouring pads, spray bottles, off-brand Swiffer refills, sponges, dryer sheets and ammonia.
Seasonal: Visit the dollar store before hitting chain stores for your holiday decorations. Halloween decor, cheap gift boxes and wrapping paper can all be had at the dollar store.
Toys: Load up on bubbles, sidewalk chalk, balls, card games and kites.
Groceries: Get your frozen fruit and veggies, string cheese, spices, name-brand condiments, rice, oatmeal and snack foods at the dollar store.
Kitchenware: Stock up on bargain-priced storage bins and containers, whimsical kitchen decor and glasses. Paper plates, cups and napkins can also be bought at super low prices.
Party gear: Greeting cards, wrapping paper, balloons, ribbons, streamers, birthday candles, party decorations and gift bags can all be bought for, you guessed it, a dollar each.
School/office supplies: You won’t be able to find every item on your school supply list that’s actually worth the price, but you can load up on project display boards, tab dividers, binder clips and poster boards at the dollar store.
Kids’ activities: The dollar store is a great place to stock up on rainy-day supplies for the kids. You’ll find some great books, puzzles, craft supplies, colored papers, stickers, activity books, coloring books and more.
… And what’s not Not everything you’ll find in the dollar store is worth as much as a dollar. Plus, there are lots of things you can get elsewhere for a better price.
Cleaning supplies: The following cleaning supplies at the dollar store are either made too cheaply to be worth the price or can be bought for less in other stores: dish washing soap, tissues, toilet paper, paper towels, garbage bags, laundry detergent.
Toys: Small toys for young children that aren’t made well can quickly become choking hazards. Also, dollar-store dolls and toy cars are likely to break the day you bring them home.
Groceries: These foods can be bought for cheaper in a grocery store: pasta, soda, gum, canned goods, chocolate.
Kitchenware: Plastic cutlery from the dollar store is too cheaply made to be worth the few cents you’ll save. Ditto for disposable baking dishes. You’ll also want to stay away from can openers, knives and oven mitts, as these items need to be well made to do their jobs.
School/office supplies: The following supplies can be bought for less money and of better quality in stores like Walmart and Target: lined paper, composition notebooks, glue, crayons, markers, Post-its, pens, pencils and highlighters.
Self-care: Cheaply made soap, shampoo and cosmetics can be harmful to your skin. Don’t buy name-brand travel-size toiletries either; you can usually get tiny shampoo and soap bottles for less than a buck at big-box stores.
When it’s not a bargain When making a purchase at the dollar store, hold it up to this checklist. If your item fits any of these criteria, you’re better off without it:
It’s sold in tiny quantities. Often, what looks like a bargain is just a product in a really small package. Check the size on food items and cleaning products; you can often get more for less money when you buy a product in a bigger size at a larger store.
It’s made with harmful toxins. Check all health and beauty products for toxic and carcinogenic ingredients.
You don’t need it. A dollar spent on something you don’t need is a dollar wasted.
It’s made super-cheaply. If it’s going to break during the first day of use, or even the first hours, leave it in the store.
It isn’t food-safe. Check all products that will come into contact with food, like serving platters or dishes, for a label that proclaims them food-safe.
It’s expired. Be careful to check the “Sell by” date on candy and other foodstuffs so you’re not paying for expired products.
Learn how to shop smart at the dollar store and you’ll go home with true bargains!
Your Turn: What are your favorite dollar store picks? Tell us all about it in the comments!
If the majority of your outstanding debt is credit card debt, you may be spending hundreds of dollars just on interest alone. Aside from wasting money, this keeps you from moving forward and paying down your debt.
Most people don’t know you can call up a credit card company and negotiate for a lower APR. Take the time this month to do that. Explain that you are working on paying down your debt and that the interest payments are impeding your progress. You can even research competing cards and cite their interest rates in a bid for a lower APR from your current credit card company.
Lowering your interest rates will allow you to make another real step toward getting rid of debt.
Your Turn: Have you ever negotiated for a lower APR on your credit cards? Share your success stories with us in the comments!
The United States has one of the lowest minimum wages of any modern country in the world. Our modest salary floor impacts our economy on every level, from the rising underemployment rates to a bloated welfare program that chiefly rests on the backs of the struggling middle class.
But all of this is subject to change: The arrival of 2019 has brought a wave of minimum wage hikes at many state and local levels along with a push to bring the national minimum wage up to $15 by the year 2024. In total, 21 states and Washington DC have increased their minimum wages, with the biggest jump of $1.00 per hour more being passed in California, Maine and Massachusetts. There are now a total of 29 states with a minimum wage that surpasses the federal level, which has remained stagnant at $7.25 for more than a decade.
The recent wage increases impact 5.2 million workers across the country. While at first glance this might seem like fantastic news for the economy, financial experts are dubious about how recent hikes and the proposed increase in the federal wage will impact the national economy.
The push to boost the federal minimum wage to $15 an hour is more dramatic than any wage hike this country has ever seen. This factor makes it impossible for economists to draw on studies and actual history for conclusions about the effects of the proposed hike. However, based on market trends and the fundamental laws of economics, they’re predicting several negative fallouts from the hikes.
Let’s explore what happens when minimum wages increase.
How do wage increases affect the job market?
Economists are predicting the proposed hike in the federal minimum wage, along with the local and state increases that have already passed, will have two negative effects on the job market:
1.) A surge in move-outs to the suburbs An increase in local and state government minimum wages will likely push employers to move across borders to avoid paying higher wages, particularly from central cities to suburbs.
For example, Washington, D.C. has raised its minimum wage to $14 an hour. This may lead to a mass exodus of Washington businesses as they move toward locations with lower minimum wages in surrounding areas. A move to a suburb like Arlington, Virginia, where business owners can pay their workers almost half the hourly wage they’d need to cover in Washington, will help them remain profitable.
2.) Businesses cutting corners Businesses forced to double their workers’ pay or even to modestly increase it will need to find a way to continue turning a profit. They will likely attempt to cut corners any way they can. This may translate into letting workers go, replacing humans with robots where possible, or even cutting down on their level of service to reduce the need for human resources. For example, fast food joints might start using machines instead of human workers and hotel chains may start skimping on their cleanups between guests to compensate for increased payroll.
Regardless of the way that businesses choose to cut corners, it will likely lead to an increase in unemployment rates and underemployment rates across the country. It may also trigger a surge of illegal work among workers who suddenly find themselves out of a job.
How do wage increases affect the consumer? When all the dust settles, it is the average consumer who will likely bear the brunt of the minimum wage hike.
Most companies hiring minimum-wage employees are small businesses with profit margins that are too thin to absorb a serious hike. These businesses will be forced to pass on their higher expenses to consumers. Grocery prices will shoot up, labor costs for services and repair persons of any kind will rise, and fast food meals will see a noticeable price increase.
Predictably, the consumers most likely to be affected by the hike are the poor and middle class, who tend to frequent businesses that hire minimum-wage workers. Ironically, the same workers rejoicing over the proposed hike will likely be those who have to pay for it most.
How do wage increases affect federal taxes? One positive impact of a minimum wage hike is the hope that an increase in wages will reduce the number of workers who are dependent upon government assistance programs, thus reducing the average taxpayer’s burden. Of course, this is pure speculation and is not based upon any studies of similar increases.
Also, when low-wage workers are pushed over the qualifying threshold for government assistance, they may be coming home with less pay after a wage hike.
While no one can say for sure how a minimum wage hike will affect the economy on a national and individual level, economists predict it is far more likely to have a negative effect than a positive impact.
Your Turn: Do you support a dramatic minimum wage hike? Why, or why not? Share your opinion with us in the comments, below.
If you’re like most Americans, you owe money toward a large loan. Whether that means carrying thousands of dollars in credit card debt, having a hefty mortgage in your name or making car loan payments each month, loan debt is part of your life. This means you’re looking at hundreds of dollars in interest payments over the life of the loan(s). There’s also the mental load of knowing you owe perhaps tens of thousands of dollars and that you’ll be paying back the loan for years to come.
It can all get kind of depressing—but it doesn’t have to be that way.
Did you know there are simple, but brilliant, tricks you can employ to lighten the load? With a carefully applied technique, you can pay off your mortgage, auto loan, credit card debt and any other debt you’re carrying quicker than you thought possible. These tricks won’t hurt your finances in any dramatic way, but they can make a big difference to the total interest you’ll pay over the life of the loan and help you become debt-free faster.
You can free up more of your money each month, use your hard-earned cash for the things you want instead of forking it over in interest and live completely debt-free sooner than you’d dreamed. It’s all possible!
A note of caution before we explore these tricks: Check with your lender before employing any approach, as some loan types have penalties for making extra or early payments.
1. Make bi-weekly payments
Instead of making monthly payments toward your loan, submit half-payments every two weeks.
The benefits to this approach are two-fold:
Your payments will be applied more often, so less interest can accrue.
You’ll make 26 half-payments each year, which translates into an extra full payment on the year, thereby shortening the life of the loan by several months or even years. If you choose this method with a 30-year mortgage, you can shorten it to 26 years!
2. Round up your monthly payments Round up your monthly payments to the nearest $50 for an effortless way to shorten your loan. For example, if your auto loan costs you $220 each month, bring that number up to $250. The difference is too small to make a tangible dent in your budget, but large enough to knock a few months off the life of your loan and save you a significant amount in interest.
For a potentially even bigger impact, consider bumping up your payments to the nearest $100.
3. Make one extra payment each year If the thought of bi-weekly payments seems daunting but you like the idea of making an additional payment each year, you can accomplish the same goal by committing to just one extra payment a year. This way, you’ll only feel the squeeze once a year and you’ll still shorten the life of your loan by several months, or even years. Use a work bonus, tax refund, or another windfall to make that once-a-year payment.
Another easy way to make that extra payment is to spread it out throughout the year. Divide your monthly payment by 12 and then add that cost to your monthly payments all year long. You’ll be making a full extra payment over the course of the year while hardly feeling the pinch.
4. Refinance One of the best ways to pay off your loan early is to refinance. If interest rates have dropped since you took out your loan or your credit has improved dramatically, this can be a smart choice for you. Contact [credit union] to ask about refinancing. We can help even if your loan is currently with us.
It’s important to note that refinancing makes the most sense if it can help you pay down the loan sooner. You can accomplish this by shortening the life of the loan, an option you may be able to afford easily with your lower interest rate. Another means to the same goal is keeping the life of your loan unchanged and with your lower monthly payments, employing one of the methods mentioned above to shorten the overall life of your loan.
5. Boost your income and put all extra money toward the loan A great way to cut the life of your loan is to work on earning more money with the intention of making extra payments on your loan. Consider selling stuff on Amazon or eBay, cutting your impulse purchases and putting saved money toward your loan, or taking on a side hustle on weekends or holidays for extra cash. Even a job that nets you an extra $200 a month can make a big difference in your loan.
Triumph over your loans by using one or more of these tricks to make them shorter and pay less interest. You deserve to keep more of your money!
Have you used any of these methods or a different approach for paying off a loan early? Tell us about it in the comments.