5 Personal Finance Apps to Keep Your Finances in Check

May 5, 2017

In today’s tech-savvy environment, it doesn’t take much to find that there’s an app for everything. If you want to edit a photo to post on Instagram, read a book, or track your food or workouts, there’s likely an app for it. It is as simple as making a few taps on your smartphone. With 95% of Americans owning some kind of cellphone according to PEW Research Center, it doesn’t seem surprising that apps are becoming so easy to use. Apps help make everyday life a little bit easier. The same simplicity can apply to personal finance apps.

If you are an avid smartphone user, you may have noticed that your experience is getting significantly easier. Instead of driving to your nearest bank to deposit a check, you can now do so from your smartphone in a matter of minutes. Checking your balance and transferring funds are simpler than ever. Did you know, there are apps that help you stick to your budget, remind you to pay bills, and invest money? Read on for five personal finance apps that could help make your life easier:

Acorns™

Category: Investing

Cost: Free app install, $1 per month for the service

Best for: Wanting to make an extra buck

The idea behind Acorns™ is using your spare change to earn additional money. Essentially, this app is meant for investing, especially small amounts. You can start off by putting in just $5 and Acorns™ economists will invest your money into stocks and bonds for you. One major benefit to this app is it is mostly hands-off. There are three options for depositing money, which can all be done automatically:

Investments from your bank account (recurring or one-time)
Round up to the nearest dollar whenever you make a purchase on a debit or credit card (you will not see any money leave your credit or debit card until the round-ups reach $5)
“Earn Found Money” is where you receive money from purchases made with specific brands

Acorns™ will then invest your money into over 7,000 stocks in bonds, and when you earn dividends the app will reinvest those without you even needing to tell it to. The service does come at a cost: $1 per month. You can pay $2 per month to add on Acorns Later™, which is an IRA that saves for retirement. There is also the option to withdraw your money whenever you would like. Investing your spare change in Acorns™ will likely give you a higher return than just letting it sit in your wallet.

Do You Need a Financial Advisor to Start Investing?

Mint™

Category: Budgeting

Cost: Free

Best for: Keeping track of finances

Mint™ is one of the most popular finance apps, and it is totally free. The purpose of the app is to manage your money, plain and simple. Whether that includes investments, credit cards, bills, or budgeting, you can take a look at all of your finances all in one place. You can also keep track of your credit score and the app will give you tips as to how to make it better. Mint™ will notify you when you need to pay your bills and tell you what you owe so you won’t miss any payments. The app tracks your purchases to make sure you are not going over your set budget and will let you know if you are close to doing so. Mint™ comes from Intuit™, which also owns TurboTax™, so there is a strong level of safety involved. Get this app if you are looking for convenience and simplicity in managing your finances for no cost.

Honeydue™

Category: Budgeting

Cost: Free

Best for: Couples

This is an app that is made for couples. If you are in a relationship or married and have a hard time keeping up with finances with your partner, this is the app for you. It is designed to be collaborative, so both you and your partner are aware of bills and spending and can keep track of expenses. Custom categories can be created and then you set a monthly budget for each one. You can set bill reminders for just one person – that way you know for sure who is responsible for that bill. It doesn’t matter if you have a combined account or if your finances are completely separate because you can customize how much you share with each other. This app is sure to cut down on disagreements about finances between couples.

Personal Capital™

Category: Investing/Money Management

Cost: Free

Best for: Working on your net worth

Personal Capital™ is for investment and money management and tracking your net worth. The app pulls together all of your investments, loans, credit cards, and bank accounts and determines what your net worth is and whether you are investing in the right places and gives advice as to how to improve your portfolio. This is a free app and is run by financial advisors both human and automated. There are tools for budgeting as well, but the real strength in this app is in discovering and improving your net worth. You can also use the technology and advisors to plan for retirement.

You Need a Budget (YNAB) ™

Category: Investing/Money Management

Cost: Free app install, $6.99 per month after free trial for service

Best for: Getting out of debt

YNAB™ has been growing in popularity over the last few years and has the goal to get you out of debt. It is primarily a budgeting app, but it also gives you the tools to learn how to get out and stay out of debt. You Need a Budget lives by four rules:

Give every dollar a job: make sure you have budgeted for every dollar you get in income monthly
Embrace your true expenses: always include expenses that occur less frequently within your monthly budget
Roll with the punches: be aware that your budget will probably have to change – and be willing to make those changes
Age your money: this is just saying that you should be using last month’s paycheck to pay this month’s bills

YNAB™ is an effective app that many users swear by, but it does cost money. You will be charged $6.99 each month after a 34-day free trial. Use that free trial period to determine whether the guidance is worth the price.

Add Personal Finance Apps to Your List

According to PEW Research Center, 77% of Americans go online on a daily basis. Of those 77% of Americans, 43% of them go online multiple times a day. If you frequently use apps to make your life easier, why not add a few personal finance apps to your phone? The more you keep up with your finances, the more aware of them you will be. There are apps for sticking to your budget, tracking credit score, investing, fraud protection, and more, and these are just a few of the many personal finance apps out there.

Cards and Accounts That Pay You

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Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – The bank is not responsible for the content. Please contact us with any concerns or comments.

Find a Credit Card

While in college, you may see a credit card offer dropped in your mailbox every week. Actually reading through the information and what the card offers is KEY. Look at interest rates and cash back rewards. Some cards have cash back rewards on points earned by using the card on things such as gas and groceries. By using a credit card for necessities and paying it off, you are earning easy credit while still in college. Some cards offer cash back opportunities on travel. If you’re going away to college, using a credit card could be a great way to earn points for a visit back home or a weekend getaway. Remember, use a credit card on things you will be able to pay back on time. This way you will be building credit while also gaining reward points to redeem on things you want to do. If you’re attending college you may want to check out student credit cards. Student credit cards can be a really great way to start building credit while you are in school. Be warned that you will still need to demonstrate a decent salary to qualify for a student credit card, simply being a student is not enough. Most student credit cards will not charge an annual fee and many offer additional perks.

Learn How Completing College Early Can Save You Money

Secure Credit Cards

If you don’t qualify for a student credit card or any traditional credit card because you don’t have a credit history look into secure credit cards. They work just like other credit cards but require a cash deposit, first. This deposit is usually in the hundreds or low thousands. If you make every payment in full and on time you’ll receive back your down payment. If you do not make payments on time or in full the lender keeps your down payment.

Rent

While being in college you will likely be moving into your FIRST apartment. An apartment can be a great way to start earning credit. Putting the rent in your name and paying it on time can assist in building credit. In order for rent to go towards your credit history, your landlord must be reporting the rent payments to one of the credit agencies. If your landlord isn’t reporting your rental payments it will not help you to build a credit history. In today’s society, it is also pretty uncommon for landlords to report rent payments to a credit agency. If your landlord isn’t reporting your rent payments to a credit agency it can’t hurt to ask if they could start! When sharing an apartment with roommates, it is vital for everyone living there to pay their share of rent on time. Finding roommates that share accountability is important when you are building a good credit score.

Get a Credit Builder Loan

A loan that is in place to IMPROVE CREDIT?! Sign me up! When you have a credit builder loan, you make payments into your savings account. After one year, you will get the amount you paid back and increase your credit score! A credit builder loan does not require good credit to begin, you just have to show proof of income. Start by applying for a credit builder loan, and begin to make payments on time. In order for you to be benefiting from a credit builder loan, you must be paying on time. The pros to a credit builder loan include getting the money you put in and having a better credit score at the end of the year!

Become an Authorized User

Becoming an authorized user is a smart and easy way to embark on creating credit while in college. Being an authorized user means that you can use another person’s credit card and your name will be included on the account. The process simply has the account user add your name to the credit card account. As an authorized user, you will not be responsible for paying back debts on the credit card. This responsibility will legally be in the original account holder’s name. The main goal for being an authorized user is to increase your credit score by having an account holder with an outstanding credit history. If you have an account holder who is known for paying their debt on time, this will increase your score, because you’re on the account. Keep in mind that you should ask someone who is trusted and reliable when becoming an authorized user.

Start on Student Loan Payments

As a former college student, I know that going to school full time while working enough to have money to start paying off student loans can seem impossible. Remember, you do not have to pay off large amounts right away. While in college, consider putting money aside to start paying off loans when you can. If you start loan payments early you will start to see positive growth on your credit score. The benefits of having student loans include helping build your credit score. If you decide to start paying off loans while in school, it will be before your loan deadline and will create less to pay off later. Even if you are not able to pay off large sums, these small amounts can make for fewer payments later on and a better credit score when you graduate from college.

Credit Utilization

A top way to build credit is not to utilize all the credit that is available to you. For example, if you have a credit card with a credit limit of $2,500 and the balance is $2,500 that would be 100% credit utilization. Credit utilization is important because it impacts your credit score. The maximum recommended credit utilization is about 30%. Therefore, if your credit card had a maximum limit of $2,500 then 30% of that would be $750. In this example, to avoid negatively impacting your credit score you should not spend over $750 on your credit card.

It can be difficult to be disciplined as a college student, but it’s important to remember that this money is not free. It’s also likely that this is probably your first credit card ever! Exciting, but this is a really important rule of thumb! This is a credit that you will eventually need to pay back. In an effort to build credit you want to be sure you’re creating good financial habits for yourself too. Be sure to stay disciplined and not utilize over 30% of your credit card.

BONUS: Credit Reports

While we are on the topic of creating good financial habits, the number one habit you can create is looking at your credit report. If you talk with any financial expert, this will be their number one piece of advice! Yearly, check your credit score and your credit report. Think about it like an annual physical at the doctor, but for your finances. Review your credit report to make sure that there are no errors or fraud to your credit history. If you visit AnnualCreditReport.com you can receive a free credit report from all three major credit agencies in the U.S. and a free credit report can be requested every 12 months. Having paid off debt or using credit in college will prepare you for future payments on cars, houses, and throughout your adult life. Knowing your responsibilities and taking care of payments on time is key to achieving a better credit score by the end of your college career. Consider these options when deciding how to build credit and choose one that will benefit you in the long run.

Are Student Loans Impacting Your Credit Score?

NOTICE: Third Party Web Sites Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – The bank is not responsible for the content. Please contact us with any concerns or comments.

2019-05-10

What You Need to Know About College Scholarships: Part 2

Part 1 of this series covered the basics of searching for scholarship money to lessen the cost of college and the average cost of college. Part 2 looks at scholarships available through the federal government and gives you additional information about qualifying and applying for these opportunities to help you achieve your educational goals.

Federal Scholarships for College

It’s a big part of the American Dream: graduating from college to pursue a productive and rewarding career. In fact, Americans value a college education so much that our federal government awards over 120 billion dollars in annual aid to help students achieve this goal. Much federal financial aid is in the form of student loans, work-study programs, and tax credits for education. However, the government also awards “free money,” which often doesn’t have to be repaid. Instead of calling this type of award a scholarship, the government calls it a federal grant. Grants are awarded based on need, plus special conditions and circumstances. A federal scholarship or grant could be your ticket to a great education at a lower cost.

Federal Grants & Private Scholarships: What’s the Difference?

You may be eligible for both federal grants and scholarships from your college, state, service club, foundation or business. One of the main differences between the two types of aid is the application process. Each private scholarship has its own process, and you must carefully adhere to the instructions and meet all deadlines if you hope to qualify. Eligibility for a federal grant is determined using the comprehensive FAFSA® form, which students submit to apply for all federal student aid (grants, loans, work-study and other types of federal assistance). An exception to this is military ROTC scholarships and VA programs, which have varying application processes. ROTC and VA applicants must go through the appropriate service branch or agency to apply. Private scholarships are frequently awarded on merit (scholastic or athletic achievement), specified condition (area of study, heritage, college or state) or financial need. Sometimes, more than one criterion is used to determine the award. Federal grants are based primarily on need, although some federal programs have been established for specific purposes like promoting teacher education or community service. Such grants may have additional requirements, like academic achievement and service commitment, in exchange for education benefits. Likewise, scholarships awarded through U.S. military ROTC programs come with a specific commitment to serve.

How Do You Apply for a Federal Grant or Scholarship?

Application for federal grants begins by filling out the Free Application for Federal Student Aid (FAFSA®) form. To apply for scholarships through military ROTC programs, you must apply with the associated military branch. Application for VA benefits can be accessed through the Dept. of Veterans Affairs website. The Dept. of Defense also offers scholarships and graduate fellowships with their own application process. Links to these federal sites are listed here:

Resources for Grants & Scholarships Through the Federal Government

Check out these federal grant programs that could help you lower the amount of money you have to borrow to attend college.

Pell Grants:

These grants gave eligible students a maximum amount of $6,195 toward their education in 2019 - 2020. Students may receive this assistance for up to 12 semesters of college. Available To: Undergraduate Students Qualifications:

Must show exceptional financial need.
Have not earned a bachelor’s, graduate, or professional degree. May be eligible if enrolled in a post-baccalaureate teacher certification program.
Must not have been incarcerated in a federal or state correctional institution.

Amount Received Dependent On:

Expected Family Contribution (EFC). Defined by the Department of Education as “an index number that college financial aid staff use to determine how much financial aid you would receive if you were to attend their school.” The FAFSA form information is used to calculate this. The formula takes into account your family’s taxed and untaxed income, assets, benefits, family size, and the number of family members who will attend college.

Cost of Attendance – Expected Family Contribution = Financial Need

Cost of Attendance. Determined by your school for your program.
Attendance Schedule. Will you be a full-time or part-time student?
Are you attending school for the entire year or just a semester?

Federal Supplemental Educational Opportunity Grants:

This is an additional grant program distributed by participating colleges and allocates anywhere from $100 to $4000 toward a recipient’s undergraduate education. Submitting your FAFSA early can have a direct impact on this type of grant. Each school sets its own deadline for campus-based funding. You should be able to see the deadline on the school’s website and if it’s not there be sure to speak with a member of your financial aid office. Available To: Undergraduate Students Qualifications:

Must show exceptional financial need.
Have not earned a bachelor’s, graduate, or professional degree.

Teacher Education Assistance for College & Higher Education (TEACH) Grants:

You must also be pursuing a career in teaching. In order to qualify you will need to teach at the elementary or secondary level school in a high-need field in a low-income area after graduation. Available To: Undergraduate Students, Post Baccalaureate Students, or Graduate Student (Attend a Participating School) Qualifications:

Enrolled in a TEACH-Grant-eligible program.
Meet academic achievement requirements (scoring above the 75th percentile on one or more parts of a college admissions test or maintaining a cumulative GPA of at least 3.25)
Receive TEACH counseling to explain the terms and conditions of the service obligation. Must complete counseling each year you receive a TEACH Grant.
Sign a TEACH Grant Agreement to Serve.

Iraq & Afghanistan Service Grants:

Eligible students who lost a parent in military service and do not meet the need-based threshold for a Pell Grant can apply for additional college funds through this program. Available To Qualifications:

Not eligible for the Federal Pell Grant due to Expected Family Contribution.
Meet Federal Pell Grant requirements for eligibility.
Parent or guardian was a member of the U.S armed forces, who died as a result of military service performed in Iraq or Afghanistan after the events of 9/11.
Under 24 years old or enrolled in college at least part-time at the time of the parent or guardian’s death.

SMART Scholarship Program:

The Dept. of Defense offers undergraduate scholarships and graduate fellowships to encourage participation in the STEM sciences and recruit future civilian employees for the DoD. Available To Qualifications:

Must be a U.S., Australia, Canada, New Zealand, or United Kingdom Citizen at the time of application
As of August 1, 2019, must be 18 years of age or older.
Ability to participate in summer internships at a DoD facility.
Willingness to accept employment post graduate for DoD
Minimum of 3.0 on a scale of 4.0 and in good standing.
Pursuing one of these disciplines for undergraduate or graduate degrees.

Jobs to Reduce Student Loans

NOTICE: Third Party Web Sites Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – The bank is not responsible for the content. Please contact us with any concerns or comments.

2019-05-07

What is a Prepayment Penalty? What’s the Catch?

Imagine finally paying off your loan just to find out you owe the lender more money! All because you’ve paid your debt off early. Instead of your lender rewarding you for paying the loan off earlier than your contract states, they charge you extra. Here’s what that is, how to avoid it, and what you can do.

What is a prepayment penalty?

A prepayment penalty is a fee charged to a borrower. If you pay off your loan earlier before the date planned in the contract the lender could charge you a prepayment penalty. A prepayment penalty is charged once you’ve completed paying your debt, if it was paid it off early, or it could be a fee for overpaying the scheduled amount set per year. A prepayment penalty can be a fixed amount or based on what the remaining balance of your loan was set to be. For example, certain loans may allow you to pay off 20% extra each year before facing a fee.

What are prepayment penalties for?

When you borrow from an institution, they assume that it will take you a certain amount of time to repay the debt back, with interest. If you pay back your debt sooner, that institution may lose out on the interest that they collect. For this reason, loans like a mortgage might have a prepayment penalty to discourage people from refinancing or selling within the first few years. You can think of a prepayment penalty as a way for the institution to ensure that it makes an adequate return amount for the credit they lent. Additionally, lenders charge prepayment penalties because if they place the loan in security and sell it, they need verification that the loan will be outstanding for a particular period of time. Having the security outstanding for a period of time will provide the buyer of the security a yield.

Student Loans

There are so many benefits to paying extra on your student loans each month. One of the main benefits - you’ll pay less interest over the life of the student loan. When it comes to student loans, you may be surprised to find out that there are no prepayment penalties. That’s right no prepayment penalties for both federal and private student loans. According to the Higher Education Opportunity Act of August 2008: “It shall be unlawful for any private educational lender to impose a fee or penalty on a borrower for early repayment or prepayment of any private education loan.” Before you begin making extra payments towards your student loans, you should contact your servicer. Verify that the additional payment is being applied to the principal balance of the loan and not to the interest. If the overpayment is directed to the principal you’ll be able to pay down the debt faster.

Mortgage Loans

Mortgages don’t always have prepayment penalties, but some do. If there is a prepayment fee on your mortgage you should be able to review the details in the mortgage contract. It’s vital when signing a contract that you pay attention to the fine print. If you don’t understand something or need further clarity, be sure to ask questions. When dealing with Mortgages, if you chose to refinance your loan there could be a prepayment penalty. Typically if you choose to refinance within the first three or five years of having the loan there may be a prepayment penalty fee that applies. If you ever have any questions about prepayment fees you should contact your mortgage lender for clarity.

Auto Loans

When taking out an auto loan there are two types of interest that may be used in your contract, simple interest or pre-computed interest. Simple interest works similarly to a student loan, it is calculated based on the balance of the loan. Therefore, if you have an auto loan with simple interest, the sooner you can pay your loan off, the less interest you’ll pay. The other type of interest is pre-computed interest. This interest is included in your agreement. It is a fixed amount calculated and added on at the beginning of the contract. Using a pre-computed interest rate is typically when you encounter prepayment penalties. Similar to mortgage loans it isn’t guaranteed that these loans have a prepayment penalty, but if so, it should be in the contract. Be sure to contact your lender or institution that services the loan to find out if there are any prepayment penalties before paying extra towards your debt.

Personal Loans

Personal loans can be used for a number of different reasons, from medical expenses to travel or even wedding expenses. When it comes to the prepayment penalty for personal loans, most companies will charge a percentage of the remaining balance. Though it’s likely your personal loan won’t have a prepayment penalty, you could still have one. Check with your lending institution or be sure to closely review your contract to see if there are any penalty fees for paying your debt down earlier.

Soft Penalty vs. Hard Penalty

You may have heard of two different types of prepayment penalties: soft and hard. A soft prepayment penalty would charge you a fee for refinancing, but not for other situations. A hard prepayment penalty would charge you for refinancing, prepayment, or selling (in the case of a mortgage - selling your house).

How can prepayment penalties affect you?

First, assuming you have multiple bills and debts that you pay each month, knowing whether any of them have a prepayment penalty can change how you pay. Imagine you have a student loan and a mortgage loan, you know the student loan doesn’t have any prepayment penalties, but the mortgage loan does. Let’s say that you’ve received some additional income and you want to put it towards one of the loans, but you aren’t sure which one. You’ll want to pay additional money toward the student loan debt because you won’t get penalized for paying it off early. Knowing a loan you’ve applied for has a prepayment penalty might motivate you to find a different borrower and give you the freedom to pay off that debt sooner without a fee. Does this mean you should never pay off debts early? No way! There are plenty of loans and other types of debts that won’t have a prepayment penalty. The important thing is to know what you’re getting into. Read the fine print and ask questions during the application process. Also, for loans like a mortgage, there is typically a page you sign toward the end of the process that includes disclosures on things like whether there is a prepayment penalty, balloon payment, and so on. Always be aware of those disclosures before you take on new debt.

What is lifestyle creep? Is it affecting you?

NOTICE: Third Party Web Sites Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – The bank is not responsible for the content. Please contact us with any concerns or comments.