Overdrafting is the worst, am I right?
It turns out there’s not enough money in your bank account — so your bank gets its revenge by helping itself to $35 of all that money you don’t have.
Ho ho ho, I just love overdraft fees, you say to yourself. What a fun game this is! Thanks a lot, BANK.
But you’ve moved past that. You’ve finally reached a point in your life where you have a real job and a steady income and you’re not overdrafting anymore. It’s a sweet feeling and a serious win. You’ve achieved a level of financial stability, and you’re not getting hit with these ridiculous fees.
What to Do Now That You Don’t Have to Worry About Money So Much
Now that you’re not worried about overdrafting, it’s time to think about what you want to achieve next with your money. Do you need to save more? Buy a home? Invest?
What’s the next step you should take? This is all part of adulting, you know. What are some specific things you can do you to take your finances to the next level?
We’ve got some ideas for you:
1. Opt in for Autopay to Save on Bills
Because the fear of overdrafting isn’t hanging over your head anymore, you have no reason to fear autopay now. ANOTHER ACCOMPLISHMENT.
Cell service providers, utilities and student loan companies all love it when you opt into a monthly autopay plan. That way, they can count on your payment rolling in like clockwork.
They love it so much, they might even give you a discount. For example, many student loan providers will give you a quarter-percent discount on your interest rate for using an autopay function, and that savings will really add up over time.
Lots of cell phone companies will kick in a monthly discount of around $5 if you use autopay.
This also helps with credit cards. If you make your payments automatically, they’re never late — so your credit cards won’t jack up your interest rates.
2. You’ve Conquered Checking. How Should You Start Saving?
So you finally have enough money in your checking account to avoid overdraft fees. That means it’s time for a savings account!
Open an account dedicated to saving, and put your money to work. One of our favorites is Aspiration — you’ll pay no monthly fees, and you’ll earn up to 2.00% APY on your savings.
You’ll get access to an online-only account for spending and for saving. The spending account comes with a debit card that earns 0.5% cash back on all your purchases, plus free ATMs, so you can easily access your money when you need it.
After you open your Aspiration account, use it to split your income:
- Automatically deposit a portion of your income into your spending account, and use that to cover basic expenses like rent and bills, plus fun stuff; like eating out, shopping or going on vacation.
- Deposit what’s left into your Aspiration savings to keep it out of sight and let it grow. You’ll earn 2.00% APY as long you deposit just $1 a month. We recommend squirreling more when you can, but we like that you won’t lose the perk when you can’t.
3. How to Get Your Credit in Shape to Buy a Home
Now that you’ve reached this basic level of financial stability, you’re probably going to want to buy a car or a home at some point.
That makes your credit score more important than it used to be. The better your score, the better deal you’ll get on a mortgage, car loan or credit card. We’re talking serious money here.
To keep a closer eye on your credit, get your credit score and a “credit report card” for free from Credit Sesame. It breaks down exactly what’s on your credit report in layman’s terms, how it affects your score and how to address it.
Because it simplifies everything, you should be able to spot any errors. For instance, if you find an “unpaid” credit card that you know you paid, or a bill in collections you know never existed, you can dispute the incorrect information and raise your credit score.
4. Invest in Real Estate — Even If You’re Not Rich
Now that the ground beneath your feet is stable, it’s time to spread your wings further.
Want to try real-estate investing without playing landlord? We found a company that helps you do just that.
Oh, and you don’t have to have hundreds of thousands of dollars, either. You can get started with a minimum investment of just $500. A company called Fundrise does all the heavy lifting for you.
Through the Fundrise Starter Portfolio, your money will be invested in portfolios that own real estate around the United States.
This isn’t an obscure investment, though. You can see exactly which properties are included in your portfolios — like a set of townhomes in Snoqualmie, Washington, or an apartment building in Charlotte, North Carolina.
You can earn money through quarterly dividend payments and potential appreciation in the value of your shares, just like a stock. Cash flow typically comes from interest payments and property income (e.g. rent).
5. Move Past Old Mistakes — Lower Your Credit Card Interest
If you used to get hit with overdraft fees, the odds are good that you’ve probably been late with a credit card payment or two.
That means your credit cards have probably used that as an excuse to charge you higher interest. A lot of us are being crushed by credit card interest rates north of 20%. If you’re in that boat, consolidation and refinancing might be worth a look.
A good resource is Fiona, a search engine for financial services, which can help match you with the right personal loan to meet your needs.
Fiona searches the top online lenders to match you with a personalized loan offer in less than 60 seconds. If your credit score is at least 620, its platform can help you borrow up to $100,000 (no collateral needed) with fixed rates starting at 3.84% and terms from 24 to 84 months.
6. You Can Even Start Planning for Retirement Now
Now that you’re not flying by the seat of your pants, it’s a good time to start thinking about retirement — because the sooner you start thinking about it, the better off you’ll be.
So you’ve got yourself a 401(k). Well, that’s swell and all, but is it doing what you need it to?
If you’re like most people, you have no idea whether your 401(k) is on pace for your retirement or just sputtering along.
Chances are, your 401(k) could be doing a lot better. Take control with help from Blooom, an SEC-registered investment advisory firm that can optimize and monitor your 401(k) for you and keep it speeding toward retirement.
It just takes a few minutes to get a free 401(k) analysis that will show you whether your investments are allocated properly and whether you’re losing money paying hidden investment fees. It’ll even tell you just how much more money your account could earn by the time you want to retire.
After that, if you sign up, it’s just $10 per month to have Blooom monitor and maximize your 401(k). Bonus: Penny Hoarders get the first month free with the code PNNYHRD.
Think of Blooom like a mechanic constantly fine-tuning your car’s engine so it gives you the best possible performance and gas mileage. Except it’s your 401(k) — and your future.
Can’t Touch This — No More Overdrafts
Getting hit with an overdraft fee feels like stepping on a financial land mine. You’re getting charged money for not having enough money.
Having enough steady income to move past that problem is an awesome feeling. You can’t touch me, BANK. (Cue M.C. Hammer’s “Can’t Touch This.”)
Here’s what’s important, though: DON’T STOP NOW.
Once you’ve reached this basic level of financial stability, you’re not at the end.
You’re at the beginning.
Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder. To be perfectly honest, he STILL gets hit with the occasional overdraft fee, and he hates hates hates it.