In this article, we’ll cover:

• Why you need an emergency fund
• When emergency funds come in handy
• How much you should save up
• How to build your emergency fund
• Where you can keep your savings
• Emergency savings vs other savings

Why you need an emergency fund

Without emergency savings, you wind up sacrificing your future plans to stay afloat during a time of need. Think of your emergency fund as a double-pronged defense: it protects you in the moment when unforeseen expenses arise and safeguards your ability to build long-term financial health.

• Avoid racking up debt: An emergency fund prevents you from relying on credit cards or loans for unexpected expenses, so you don’t have to accumulate debt, pay interest on loans, or risk damaging your credit score.
• Don’t deplete your savings: Instead of withdrawing money you’ve earmarked for other savings goals, an emergency fund ensures you have a separate cache in case of a crisis.
• Protect your investments: With an emergency fund, you won’t be forced to liquidate investments before you’d planned to, potentially taking a loss in the process.
• Maintain peace of mind: Knowing you have money in reserve reduces the worry that a financial emergency could undermine your financial stability, especially during challenging times.

When to use an emergency fund

An emergency fund is a safety net to cover large expenses, generally over $1,000, or to sustain you if you lose your income. It’s crucial to use it only when it’s truly urgent and necessary; if you deplete your emergency savings for non-essentials or to cover normal monthly expenses, the money won’t be there when you genuinely need it.

Emergency expenses

An unexpected expense is just that: unexpected. That means you can’t necessarily anticipate what you’ll need emergency savings for. That said, there are some common scenarios in which people rely on an emergency fund. 

• Major car repairs: Situations like a car accident, engine failure, or a transmission issue can all pose a high financial toll.
• Home repairs: Whether you’re a homeowner dealing with a failing furnace or a renter fighting a bedbug infestation, unexpected home repairs can be costly.
• Medical emergencies: Health is unpredictable. From sudden surgeries to treatments not covered by insurance, medical expenses can take you by surprise.
• Unplanned travel: Sometimes, urgent trips are unavoidable. Whether it’s attending a family emergency, a funeral, or assisting a sick loved one, having funds set aside can ease the journey.

Income loss

Even the most stable-seeming job can go up in smoke, so it’s important to be prepared for the possibility of unemployment. If you face a sudden loss of income due to layoffs or health issues, an emergency fund can help cover your living expenses without going into credit card debt while you find a new job. 

Emergency cash is especially crucial if you’re self-employed or a gig worker, since government financial aid options like unemployment or disability benefits might not be available to you.

How much money should you have in your emergency fund?

A widely accepted rule of thumb is to keep three to six months’ worth of living expenses in your bank account for emergencies. The reasoning is that it can take many months to find a job, so you want to have enough to cover your living expenses in case of unemployment.

The exact amount for a healthy emergency fund will vary for everyone. To get a ballpark figure for yourself, jot down all your monthly expenses and multiply that by three (for the conservative side) or six (for a more comfortable cushion). The number you come up with might seem like a lot of money, and you may want to whittle it down by subtracting expenses you’d temporarily cut if you lost your job, like entertainment or treats. 

For example, say your total expenses add up to $5,000 a month. You’d need between $15,000 and $30,000 in your emergency fund to cover three to six months of living expenses. But if you were to remove some discretionary spending from your budget, you may find that $10,000 or $20,000 would be enough to get by if you tighten your belt.  

In reality, however, six months of living expenses sounds like an intimidating savings goal for most people. The good news is, you don’t need a specific amount of money to start an emergency fund. If you just start saving a portion of your paycheck based on what you can afford, your fund will grow over time.

How to build an emergency fund

Like any financial goal, building an emergency fund may sound daunting at first, but it’s much more accessible when you have a plan and tackle it in small chunks. 

The key is saving consistently and gradually increasing your contributions as you’re able.

Make a budget you can stick to

Building a budget is the foundation of managing your day-to-day spending, paying down debt, and working toward your savings goals. There are many different budgeting strategies out there, such as the 50/30/20 rule, the envelope method, and zero-based budgeting. The best approach for you is the one you can stick with. Include a line item in your budget specifically for your emergency fund so you’re adding to it bit by bit every month.

Automate your savings

One of the smartest moves you can make for your savings is to automate your contributions. By setting up a direct deposit from your paycheck into your savings account, you can tuck a portion of your earnings directly into your emergency fund before you even see it, thereby reducing the temptation to spend that money. Over time, this consistent, automated approach can significantly grow your emergency savings without feeling the pinch.

Take advantage of windfalls

Sometimes life drops a financial bombshell, but every so often you get a pleasant surprise as well. Windfalls like tax refunds, bonuses, and gifts are an opportunity to bolster your emergency savings. When you find yourself with extra money, consider channeling a portion into your emergency fund. Allocating windfalls to your savings can accelerate your fund’s growth, getting you closer to your financial goals without affecting your regular income.

Trim your expenses

Every dollar saved can be a dollar earned for your emergency fund. By reviewing and cutting back on non-essential expenses, you can free up more money for your savings. From cutting back on discretionary spending to reducing the cost of monthly expenses, look for practical ways to save money and funnel the extra cash into your emergency savings.

As you begin reviewing your spending habits, you might find some easy wins—such as canceling unused monthly subscriptions or seeking out the most cost-effective car insurance provider—these small changes can quickly reduce your total spending and free up dollars to grow your emergency fund.

Where to keep your emergency fund

When storing your emergency savings, two principles are key: liquidity and growth. Liquid means you can access your funds quickly and easily, without facing penalties. And growth is all about earning money on your savings. 

While it’s essential for your emergency cash to be accessible, you don’t want it to sit idle in your checking account. Opting for an interest-bearing savings account can help your emergency fund grow more quickly without you having to lift a finger.  

• Savings accounts: A traditional savings account offers a safe place for your money, typically with minimal or no fees. Many banks offer options with a low minimum required deposit; the trade-off is that these bank accounts usually pay lower interest than other short-term ways to grow your money.  
• High-yield savings accounts: These are similar to regular savings accounts, but offer a higher interest rate. This means your money can grow faster over time. Some might have higher minimum balance requirements or monthly fees, so be sure to read the fine print.
• Money market accounts: A money market account combines features of both checking accounts and savings accounts. Typically offering higher interest rates than standard savings accounts, they may also come with checks or debit cards. However, they might require a higher minimum balance and have monthly limits on transactions, making your emergency fund less liquid.

Emergency savings vs. other savings

Saving money is all about planning for the future, whether it’s unanticipated expenses or things you know you’ll need or want. An emergency fund is one component of an overall savings strategy; be sure you understand how it differs from other types of savings funds so you can plan accurately for all your financial goals.  

• Emergency fund: Emergency savings are for unexpected and significant expenses, typically those over $1,000, or even much more.  
• Rainy-day fund: Tailored for smaller unforeseen expenses, a rainy-day fund can cover living expenses you may not have accounted for in your budget. For instance, if there’s an out-of-the-blue spike in your water bill or a surprise visit to the vet, this fund comes to the rescue.
• Sinking fund: This is your planned savings pool. It’s for anticipated expenses you know are coming down the road, like regular vehicle maintenance, holiday gifts, or a vacation. When you have a solid emergency fund, you can rest assured you won’t have to siphon money away from these savings goals if you’re in a financial pinch. 
• Retirement savings: Preparing for your golden years is a marathon, not a sprint. Many people opt for tax-advantaged retirement accounts like IRAs or 401(k)s to maximize their savings. Withdrawing funds early can have substantial financial repercussions, so it’s extra important to rely on your emergency fund instead of tapping into retirement savings in a crisis. 

Protect your present and future with an emergency fund

An emergency fund equips you to navigate life’s uncertainties with confidence. And it also prepares you to work toward your longer-term financial health. Knowing you have a buffer to weather a financial storm empowers you to focus on saving and investing money to reach your bigger goals. 

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The post How to Set Up an Emergency Fund appeared first on Stash Learn.

In this article, we’ll cover:

• How early direct deposit works
• The benefits of early direct deposit
• Early access to your money with Stash

How does early direct deposit work?

Employers often offer direct deposit because it can help them cut down on the risks and costs of distributing paper checks and even handle payroll more quickly. Additionally, an electronic record is created for each transaction, allowing the sender and receiver to track funds. To set up direct deposit with your employer, you’ll need to provide them with your banking information: 

• Name of your bank
• Bank’s routing number
• Your account number
• Whether you’re using a checking or savings account

From there, you can choose whether you want to deposit 100% of your paycheck into your checking account or split it between your checking and savings accounts. Your employer might provide a form for this information or ask you to bring in a form from your bank.  

So how do you get paid early? Once your employer or benefits provider process payroll, they will notify your bank of your incoming deposit in advance of your actual payday. When they do and your bank receives the deposit, the bank can fund your account immediately so you don’t have to wait for payday to access your money. Your early pay could be available up to two days before your usual payday.

The benefits of getting paid early

64% of Americans live paycheck to paycheck (Pymnts, 2022), which can make the days leading up to payday stressful if money is tight. Whether your pay period is weekly, biweekly, semimonthly, or monthly, having your hard-earned money available a little sooner can help alleviate some financial stress. Early pay means you may have funds available to pay bills, avoid late or overdraft fees, and more easily cover unexpected expenses. Early direct deposit can give you some peace of mind that your money is available for your most pressing needs. And if you’re trying to save money, automatically depositing a portion of your paycheck into your savings account can make it easier to stash those funds away so you don’t accidentally spend them. 

Top benefits of early direct deposit:

• Pay bills on time
• Avoid overdraft fees
• Avoid late payment fees
• Cover unexpected expenses
• Reduce stress when money is tight
• Initiate transfers before the weekend
• Making saving automatic

Get paid early with Stash

If you have a Stash account, you can set up early direct deposit and get paid up to two days earlier.³ You can even start by allocating a just percentage of your paycheck to your Stash banking account, and increase as you choose. Once you get set up, you should receive your first early direct deposit in one to two pay periods, depending on your company’s payroll policies, and the financial institutions involved. 

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How to set up early direct deposit with Stash

There are two convenient ways to set up early direct deposit with the Stash app. Once you log in to your app, you can choose to receive a pre-filled form to give to your employer or get your routing and account numbers manually so you can fill out your employer’s form. Either way, the process is quick, getting you on the road to an earlier paycheck.

Option #1: Email a PDF. Get a pre-filled form you can send to your employer.

1. Login to the Stash app.
2. Tap Bank at the bottom of the screen. 
3. Tap Direct Deposit.
4. Tap Set up Direct Deposit.
5. Tap Email a PDF. 
6. Check your email! We sent you a form that you can give to your employer.
7. Complete the form and give it to your employer.

Option #2: Copy your account information. Get your account and routing numbers manually.

1. Login to the Stash app.
2. Tap Bank at the bottom of the screen. 
3. Tap Direct Deposit.
4. Tap Set up Direct Deposit.
5. Tap Copy Your Account Information to see your account and routing numbers. 
6. Set up direct deposit with your employer using your routing and account numbers.

Ready to get paid early?

You’ve worked hard for your money, so why not get it into your bank account sooner with early direct deposit? Stash offers banking access that helps you take control of your finances: get your paycheck up to two days early, avoid overdraft fees,² automatically save and invest, and earn stock with the Stock-Back® Card.¹ It’s all part of Stash Core, the world-class infrastructure platform powering our banking and personal brokerage accounts that empower people to build wealth for the long term.

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The post Early Direct Deposit: How You Can Get Paid Early appeared first on Stash Learn.

If you’re not sure how to build credit, you’re not alone. The Consumer Financial Protection Bureau (CFPB) reports that approximately 1 in 10 American adults lack a credit record; that’s 26 million people. Another 19 million Americans have a credit record but no credit score because their credit history is either out of date or too thin to show up on a credit report. 

If you’re starting from scratch, figuring out how to build credit doesn’t have to be complicated. Here are some simple credit-building steps you can take to get started.

In this article, we’ll cover:

• How to build credit with credit cards
• How to build credit without credit cards
• How to monitor your progress

Build credit with a credit card

Opening a credit card can be one of the fastest ways to build credit if you use your card wisely. But how can you get approved if you have little to no credit history? There are a few options to make it more accessible:

• Get added as an authorized user: A family member or significant other can add you as a user on their credit card; that card’s payment history will then be added to your credit report
• Open a student credit card: Many financial institutions offer this type of card for college students
• Open a secured credit card: This type of credit card is backed by a cash deposit you make upfront 

If you’re not a college student and it’s not practical for you to become an authorized user on a family member’s card, that’s okay. Those solutions aren’t available to everyone. So let’s focus on building credit with a secured credit card.

Get a secured credit card

A secured credit card functions like a standard unsecured credit card, with one major difference:  you deposit cash when you open the card, which serves as collateral if you’re unable to make your payments. Generally, your secured card’s credit limit will be equal to the amount of your deposit. A secured credit card is not the same as a debit card; any money you charge to your card is a debt you have to pay back, and you’ll have to pay interest on any balance you don’t pay off each month.

Because the card issuer shares information about your credit usage with credit reporting agencies, regular responsible usage can help build up your credit history. Visa, Mastercard, and nearly all of the leading credit card lenders offer a secured card option. You can also inquire at your bank or credit union about applying for a secured credit card.

Keep your card balance low

Your card’s credit limit is the maximum balance you can have at any given time, but just because you can borrow up to the limit doesn’t mean it’s a good idea. One factor that credit agencies use to calculate your credit score is credit utilization. That’s the amount of credit you have available compared to your balance. Generally speaking, using more than 30% of your available credit at one time can hurt your credit score. For example, if your credit limit is $1,000, keeping your balance below $300 is a good guideline.

Another important reason to keep your balance low is to avoid spending money on interest or running up debt you can’t pay off without squeezing your budget. Think of your credit card as a convenient way to pay for everyday things you know you can pay off within your billing cycle, not a long-term loan. 

Best practices for keeping your card balance low:

• Keep your credit utilization at 30% or less
• Make more than one payment per billing cycle
• Don’t use your card to buy more than you can afford to pay off every month  
• If you can’t pay your full balance each month, at least pay more than the minimum

Set up automatic monthly payments

Payment history makes up about 35% of your credit score, so delinquent payments can quickly turn your efforts to build credit into creating bad credit. Additionally, late credit card payments are often subject to fees or penalties, so you’ll end up owing even more the next month.  

Setting up automatic monthly payments ensures you won’t miss the crucial deadline. Most cards give you several options for autopay, such as the minimum balance, a fixed amount, or the entire credit card balance each month. 

Request a credit limit increase

Increasing your credit limit without increasing your spending lowers your credit utilization ratio, which could benefit your credit score. After you’ve established a track record of on-time payments, your credit card company may be willing to increase your credit limit. If you have a secured card, you might have to add additional funds to your security deposit, but not always. In some cases, the institution might even automatically increase your credit limit after a certain period of time. Since credit utilization is an important part of developing a good credit score, it’s worth calling your institution to ask about your options. 

Open a second credit card

Once you’ve been using your secured credit card responsibly for about a year, you may be eligible to upgrade to an unsecured card. With your credit history established, there might be many more options for cards you could qualify for, so shop around to find the right one for you. Consider factors like the interest rate and whether the card has an annual fee. Some credit cards even offer added benefits like points or cash back that might interest you.

When you open a new credit card, it may be wise to stop using your first card so you don’t have to keep track of balances and bills for multiple credit cards each month. But don’t close that account. Credit reporting bureaus look at the age of your accounts when calculating your credit score; the longer an account has remained open and in good standing, the more it works in your favor. Essentially, older credit accounts give more credence to your credit history than new credit.    

Build credit without a credit card

Responsible use of a credit card is one of the best ways to establish your credit history, but it’s not the only path. It’s possible to build new credit without a credit card through a credit builder loan or by leveraging your rent and utility payments.

Apply for a credit builder loan

A credit builder loan (CBL) is a type of personal loan made specifically to help borrowers build credit history and improve their credit scores. Here’s how it works: Instead of the bank loaning you a lump sum that you repay over time like a standard loan, your lender will hold the loaned money in a secured savings account until the loan is repaid. You make fixed monthly payments and then get the principal back at the end of the loan term. 

Research shows that opening a CBL can increase your likelihood of establishing a favorable credit score by 24% and increase existing credit scores by 60 points or more, depending on your individual financial situation. While CBLs are not as common as other types of loans, you may be able to establish one with your bank or credit union.

Keep in mind that, just like with credit cards, making your payments on time is crucial; late payments reflect poorly on your credit score. And you’ll likely pay interest on the money you borrow, though some institutions will credit you back some of the interest after you’ve paid off the loan.

Leverage your rent and utility payments

If you pay your rent and utilities on time every month, you might be able to use your good payment history to build credit. These kinds of payments aren’t automatically shared with credit reporting agencies, but all three major credit bureaus, Equifax, Experian, and TransUnion, will include rent and utility payment information in credit reports if they receive it. 

You can’t report your payments to the bureaus yourself, and landlords and utility companies often won’t do so on your behalf because they have to pay a fee. The good news is that there are many rent-reporting services that will verify and report your payments. 

The options offered by these services and the fees they charge vary, so comparison shop to find the right one for you. Some just report rent, while others will also include various types of utilities. Some will also report your past payments, which can be a benefit if you’ve always paid on time. You’ll also want to find out which bureaus the service reports to, as not all of them include all three agencies. 

If you use a rent-reporting service to help build credit, remember that consistent on-time payments are essential if you want a positive impact on your credit score. 

Take your time and watch your numbers climb

Building credit takes patience and diligence; after all, it’s called credit history for a reason. It can take six months or more to generate your first credit score after you get started with a credit card or CBL loan. Having only that new credit won’t necessarily get you to a high credit score; keeping accounts in good standing over a longer period of time, maintaining a low credit utilization ratio, and making all your payments on time are key to increasing your score over time.

As you put your plan for how to build credit into action, keep an eye on how your credit score is affected. You can get a free credit report once a year from all three of the major credit reporting bureaus; check it to see your progress and make sure no issues bringing your credit score down. If you want to keep an even closer eye on your progress, a free credit score app will give you a more frequent look at your credit report, and many offer personalized tips for improving your credit score. And remember: building credit is just one piece of the puzzle. Your budget, savings, and investments are also core components of working toward a brighter financial future.     

The post How to Build Credit: Why You Need It and How to Get It appeared first on Stash Learn.

Just over half of Americans have difficulty passing a basic financial literacy test, according to industry data. What’s more, roughly 40% of respondents to a Stash survey¹ lacked an understanding of basic economic terms, like compounding and inflation.

While you can always bone up on your money-related vocabulary words, cultivating a deeper understanding of financial basics can help you reach your long-term goals. That can include buying a car or house, starting a family, or even retiring one day.

What does it mean to be financially literate?

Financial literacy, or a basic understanding of principles concerning money, is essential if you want the ability to honestly consider your financial situation, map out realistic goals, and develop a strategy to achieve them.

That can include making smart daily choices for spending, saving, and investing, as well as getting yourself out of debt, and avoiding unnecessary risks.

If you’re one of the millions of Americans wondering why financial basics weren’t covered during your high school years, it’s never too late to learn.

Here’s a quick rundown of some basic personal finance principles that can help you get caught up.

Learn to make a budget

Building a budget is step one on your path to understanding your own personal finances. A budget is a blueprint for your money, accounting for your income and spending, which should help you establish a plan going forward. 

Read How to Use a Budget to Stay on Track to get started. 

Get smarter about banking fees

You probably have a bank account, and you probably have a general idea of how a bank works. But not all banks are the same, and some will nickel and dime you with fees.

Are you paying too much in bank fees? Find out here: Bank Fees to Avoid

Be savvier about your saving

Saving is critical. If you’re in a tight spot, you’ll want to have a little extra cash you can use. And if you have goals such as buying a house, you can save for them over time. 

At Stash, we commend having a rainy day fund with $500 to $1,000 for surprise expenses, as well as an emergency fund with three to six months worth of expenses. Saving is part of our financial philosophy, the Stash Way. 

It can be difficult to start saving. But as of April 2020, Americans were saving a record amount as a result of the Covid-19 pandemic. If you have extra cash right now—maybe from a stimulus check or your tax return, if you got one—consider putting a chunk of that money into an emergency fund now before you spend it.

Good to know: Many people often conflate saving with investing. They can both be used for financial planning, but there are some differences. We won’t get all preachy and tell you that you need to save more, but more than half of Americans regret not saving more, according to a Bankrate survey. 

You may want to consider reviewing concepts like compounding and inflation while tackling your savings goals.

Read Saving vs. Investing: What’s the Difference?

Learn investing vocabulary

You can quickly go down a rabbit hole when you start digging into the world of investing. The basic premise, of course, is that you’re trading your money for a share in an asset such as a stock, bond, or ETF. The hope is that your investment may grow and benefit you in the future. Or, in other words, you’re putting your money to work. Keep in mind, however, that the market is not predictable and that your investment is subject to volatility, meaning that it can gain or lose value over time. 

Get your education started with Investing for Beginners: a How-to Guide. Our glossary of financial terms might also help you.

Overcome performance anxiety

A portfolio is an investing term that means your assets, including stocks, bonds, and cash. Your portfolio’s performance and return refers to how the assets in your portfolio gain or lose value over time.

Learn more about investment performance. Read: What is Investment Performance?

You may also want to consider Stash’s Smart Portfolios.² They are personalized portfolios, created by Stash’s investment team of financial experts³, that can help take some of the guesswork out of building a diversified portfolio.

It’s all in your hands

This checklist can help you start building your financial foundation by budgeting, saving, and investing. With Stash, you can do all of these things in one place.⁴ You can save for your goals with Goals⁵ pay your bills automatically with Bill Pay⁶, and invest in fractional shares of stocks, bonds, and ETFs. 

Also, remember to check out the Stash Way, our financial wellness guide for saving, investing, and planning.

The post Clip & Save: Your Financial Literacy Checklist appeared first on Stash Learn.

Letting the bills stack up without paying them can be even more upsetting. That’s one reason it’s important to build a budget that lets you cover all of your monthly expenses, including your credit card, utility, and other bills. And by paying your bills on time, you can ensure that you’re not overspending. It can also help you build credit, so you can achieve your larger financial goals, like owning a home, and saving for retirement. 

Stash’s Bill Pay tool can work with your budget, allowing you to manage and pay your bills in one place, in-app and online, and on time.¹ 

How to budget for paying your bills

If you don’t already have a budget, creating one should be the first step in building your financial plan. When you make a budget, you’ll account for the money you have coming in each month, the money you need to spend on essentials, the money you spend on non-essentials, and money that you save or invest. 

There are many different ways to budget. One method you might use is the 50-30-20 budget, which divides your income into three categories: essential, fixed expenses (50%), non-essential, variable expenses (30%), and investments and saving (20%). Your essential, fixed expenses include the bills you pay each month, such as rent, utilities, credit card payments, student loan payments, and more. 

So when you’re building a budget, take a look at your bills from the previous month to see what you typically spend paying them, and build those expenses into your budget. Then you’ll know how much money needs to go towards your bills each month, so you won’t be as tempted to spend on take-out dinners, or online shopping. 

Why it’s important to pay your bills on time

Paying your bills on time and in full is crucial to maintaining your financial health, and preventing debt. It can also help you to build good credit. Missing a payment on a bill one month can make it more difficult to catch up on payments. For example, if you miss a credit card payment, the credit card company may charge you more interest leading to you owing even more money than you initially did. 

By paying your bills on time, you can also increase your credit score, which is a point-based rating system that assesses how responsible you are with loans and debt over time. Credit scores, developed by a company called Fair, Isaac Co., are sometimes called FICO scores. Credit scores can run from a low of 300 to a high of 850, which is considered perfect credit. A score of 670 or above is generally considered good credit. Paying your bills on time and in full can contribute to a good credit score.

Having a solid credit score can help you reach your financial goals. If you apply to get a loan for buying a car or a house, or opening your own business, your potential lenders will likely look at your credit score to see how you’d handle that money.

Using Bill Pay with Stash

With Stash, you can use Bill Pay¹ to help you keep track of bill payments. Bill Pay can help you make sure that you pay all of your bills on time and in full by keeping all of your bills in one place. 

After setting up a Stash investment account, in order to use the Bill Pay feature, you need an active Stash Stock-Back® Card² and you need to verify your phone number. Once your card is activated and your phone number is verified, you can set up Bill Pay in the Stash app.

If you’re paying a utility, cable, internet, or credit card bill, you can use Bill Pay to send that company your payment electronically. This electronic payment should be fulfilled through Stash’s third-party payment service in three to five business days. If the recipient requires a paper check, you can also use Bill Pay to send a paper check. Remember that you’ll need to update bill recipients with your Stash routing and account numbers, which you can find under “Account and routing numbers” in your Bank settings. 

The post Here’s Why You Should Pay Your Bills on Time appeared first on Stash Learn.

Direct deposit can be an inexpensive and secure option for banks and consumers who want to get their funds more quickly, a potential win-win for both.

Benefits of direct deposit

There are a number of reasons you might consider using direct deposit:

•  It’s fast. Direct deposit allows money to move between accounts quickly, typically making funds available sooner than with traditional checks.
•  It’s secure. Direct deposit can be a safer alternative to paper checks, which can easily be lost or stolen. Transactions are also easy to track. You can monitor your direct deposit in your online account.
• It’s streamlined. The system reduces paperwork and the number of steps for banks that process direct deposits.  The system can also save time and effort for consumers. Many banks offer perks such as reduced fees or higher interest rates to account holders who set up direct deposit into their accounts.

Traditional uses for direct deposit

You may already receive your paychecks as a direct deposit if you enrolled in direct deposit via your employer’s payroll. More than 86% of U.S. workers receive their pay via direct deposit. Many employers prefer direct deposit because it eliminates paperwork—and the hassles and errors that come with it. The speed of automatic payroll saves a trip to the bank to deposit your paycheck. Banks encourage direct deposit for many of the same reasons: speed, fewer headaches, and easy electronic tracking.

Other uses for direct deposit

Direct deposit is used for a host of other transactions beyond employee payroll. The Internal Revenue Service (IRS) encourages taxpayers to make tax payments and receive refunds electronically. In fact, approximately 80% of all 2018 federal tax refunds were paid electronically. The Social Security Administration has been even more aggressive in promoting direct deposit: a 2013 federal law mandated that, with a few exceptions, the U.S. Treasury pay all Social Security and SSI benefits electronically.

Insurance providers and the U.S. Department of Veterans Affairs are among other institutions that have adopted direct deposit to streamline payouts to beneficiaries. Most states have instituted systems for making child support payments via direct deposit.

Like direct deposit, the internet has opened the door to a new class of electronic transfer service providers. PayPal, Venmo, and Google Wallet are among the best-known services that allow individuals and businesses to make and receive electronic payments. Users provide their routing and account information and can move funds to and from traditional bank accounts, often instantaneously.

Who is eligible to use direct deposit?

Anyone with a checking or savings account at a U.S. bank can use the direct deposit system. Both types of accounts can receive a direct deposit, and most banks will allow you to automatically split a deposit among multiple accounts. Brokerage accounts, or accounts through which you can make investments, may also accept an electronic transfer; but brokerage firms will sometimes use an intermediary bank to process them.

How to set up direct deposit to receive payments

To set up direct deposit of your paycheck, your employer will likely give you a set of forms that ask for your bank’s routing number and your account number. The routing number is a nine-digit number that you can find in the lower left-hand corner of your personal checks. If you don’t use personal checks, you can contact your bank directly to ask for its routing number. Your account number is immediately to the right on a check. You may also be asked to supply your bank’s mailing address. You’ll also have to provide your employer with a voided personal check to ensure that they receive all the correct details.

When setting up direct deposit into a brokerage account that uses a third-party bank, you’ll likely have to ask the broker for that bank’s routing information and the account number at that bank. This account number may not match your brokerage account number since your broker may be using the bank account as a temporary holding account. Not all brokerage accounts accept direct deposit so be sure to look into the limitations of your specific account.

Once you provide these numbers to your employer, they may set up a test deposit of a nominal amount—usually a few cents—to confirm that they have your correct banking information. Your first electronic deposit may be delayed until you verify your information. 

Making payments through direct deposit and electronic transfers

Direct deposit and electronic transfers can be a good way to send money to a friend or pay taxes or bills. Services such as PayPal and Venmo allow you to make payments to other individuals without writing a check or getting cash from the bank. In fact, many states, such as California and Massachusetts, require electronic payment for some taxpayers.

Electronic transfers have also streamlined payments for services such as credit cards and utilities. You can set these payments up to occur automatically on a certain day of the month or elect to review your bill before authorizing a transfer. Either way, you avoid the hassle of writing and mailing a check.

How long does direct deposit take?

In many cases, you will have access to direct deposits immediately, and banks must make them available by the next business day after the business day that the bank received the money. Electronic deposits often require no human oversight and are automatically validated by your bank, so there is no need to wait a couple of days for a check to clear. In rare cases, an employer may choose to use an electronic check, which is a type of Automated Clearing House (ACH) transaction. E-check funds may not be available for several days.

Direct deposit is great but getting your money earlier is even better. With Stash, you can access direct deposit funds up to two days before they arrive with Stash’s banking’s Early Direct Deposit feature.³ Remember that in many cases, an employer or other benefit provider will notify your bank of a pending payment before it actually arrives. And money always posts as soon as it’s received. With Stash banking, you can also divvy up your paycheck into different partitions¹³ so that you can stay on top of your bills and expenses. To learn more about direct deposit and how to take advantage of Stash banking’s Early Direct Deposit service, visit Stash Banking.

The post What is Direct Deposit? appeared first on Stash Learn.

Stash is excited to announce partitions², a new cash management tool that helps you create different categories within your Stash account. Partitions allow you to put money toward any financial goal you choose, from paying down your educational debt to money for groceries, even saving for a vacation. 

In conjunction with partitions, Stash also offers spending insights¹, a tool that comes with your Stash banking account that tracks how you spend the money in your account so you can visualize your money habits as you develop budgeting and saving goals with partitions.

What is partitions and how does it work?

As of March 31, 2020, you can find partitions in the Spend tab of your Stash account, as long as you have an account with an activated debit card. If you’ve already created a Spending Cushion for short-term savings, that Cushion will become one of your partitions now. 

When you start to create your partitions, take a look at your spending insights, which you can find in your transactions details under the Spend tab in the app. This tool sorts how you spend your money in a given month into a visual pie chart of categories such as groceries and restaurants. Looking at those insights can help you build your partitions. 

For example, if you know you spent $500 on groceries last month and you want to cut down on that spending, consider putting $400 (or whatever amount you decide) in your Groceries partition for the next month. 

You can also label each partition in your account to reflect any of your budgeting goals. For example, you may want to call one Emergency Fund and another one Credit Card Bills. You could even set one up as Trip to Europe, and one for Buying a House. Partitions allow you to save for both your short-term and long-term goals by allocating your money accordingly. 

Say you decide that you want to save more money towards buying a house. You can instantly move money from your Trip to Europe partition or any other one. These partitions aren’t different bank accounts. You can think of partitions as different files in a filing cabinet, with your Stash account as the cabinet.

Currently, you can create up to five partitions in your account. While you can’t delete a Partition yet, you can rename a partition as your needs change. You can also move money instantly between partitions if needed.

When you set up a partition, you can also create a reminder to tell yourself to add more money to it on a schedule that suits you. Plus, if you have Direct Deposit set up with Stash, you can automatically split each paycheck into different partitions, so you can continue achieving your financial objectives. 

Why use partitions?

Stash created partitions to help you stay on track with your budgeting and saving. And if you use a budget template such as the 50-30-20 budget or the envelope method, you might find partitions familiar, because you’re already saving money in different buckets every time you get paid. 

Partitions can help you save for specific goals, while you stay on top of saving.

We’re excited for you to get started!

The post Get Ready for Stash Partitions! appeared first on Stash Learn.

We’ve all been there—when you take a look at our bank statement or account balance, only to find that you have less money than you thought. Where did it go?

Then you see it: Your bank has hit you with fees that you never anticipated. It could be for simply accessing your money, having too low a balance, or even receiving your paper bank statement. It’s enough to make you want to keep your money in your mattress.

A dollar here, $20 there—these bank fees can really add up. In 2022, the average overdraft fee was $33.58—and that’s just one of many kinds of fees banks typically charge.

Here are five of the most common fees banks like to charge, and ways to avoid them.

1. ATM fees

• What it is: A fee for withdrawing money from an ATM machine.
• Average fee: $4.59, according to recent industry data

How to avoid it: Banks typically charge ATM fees when you’re withdrawing money from an out-of-network machine—or, an ATM that’s owned or operated by another institution.

To avoid ATM fees, get cash from your own bank’s machines, or go inside and do it the old-fashioned way: Speak with a teller. (Just make sure your bank doesn’t charge a teller fee, see below.)  You can also get cash back when you make a purchase with your debit card to get cash or switch to a bank that refunds ATM fees.

You can also shop around for a bank that covers a certain number of out-of-network ATM fees.

The Stash debit card gives you access to thousands of fee-free ATMs around the U.S.² You can deposit cash to your account through your linked bank account, via direct deposit, or at participating CVS Phamacy®, Rite Aid and Walgreen stores³.

2. Account maintenance fees

• What it is: A fee levied to service your account, typically your checking account. Maintenance fees are sometimes called minimum-balance fees.
• Average fee: Variable (Bank of America and Chase, for example, charges $12 per statement cycle for balances under $1,500;  Wells Fargo charges $10.

How to avoid it: If your bank charges custodial and maintenance fees, ask if they have a different kind of checking account option that doesn’t have minimum balance fees. If not, the easiest way to dodge them is to switch to a bank that doesn’t charge them in the first place. Otherwise, you’ll need to abide by your bank’s rules in regard to balances and deposits.

As a last-ditch effort, you can try arguing with your bank to get these charges refunded. The customer service agent may be kind and refund a month or two to keep your business—but that probably isn’t going to prove a fruitful long-term strategy.

3. Overdraft, and/or non-sufficient fund (NSF) fees

• What it is: A charge for overdrawing your account, and for the bank covering the difference.
• Average fee: $33.58

How to avoid it: One of the biggest money-makers for banks, overdraft fees are also the hardest to swallow. If you overdraw your account, you’re basically borrowing money from your bank—and your bank is happy to lend it to you at an incredible markup.

The difference between an NSF and overdraft fee is small but important. When you’re charged an overdraft fee, the bank covers the charge for you. When you’re charged an NSF fee, the transaction isn’t approved, as the bank declines to pay it on your behalf. You’ll be charged one or the other, depending on which action your bank takes.

If you write a check for more than your account balance, it’s possible that you’ll be hit with an NSF fee or overdraft fee, and the recipient will also be levied a returned-check fee. This is a fee charged by the recipient’s bank for depositing a bounced check.

One way to think about it is if you borrowed $24 and were hit with a $34 overdraft fee, you’d be paying 17,000% APR, according to the Consumer Financial Protection Bureau.

How can you dodge these fees? You’re entitled to decline or cancel overdraft coverage. If you cancel the coverage, the transaction will be declined, saving you from overdrawing.

A word of caution: Always, be aware of your account balances and plan purchases accordingly.

4. Paper statement fees

• What it is: A fee incurred for receiving a paper statement from your financial institution
• Average fee: Varies, but usually around $2

How to avoid it: It’s simple: Sign up for electronic statements, delivered via email. This is as easy as it gets, and while it may only save you a buck or two a month, it’s another dollar that can go toward your investment portfolio or retirement savings. Electronic statements are also good for the environment because they don’t require paper.

5. Teller fees

• What it is: A charge for talking to a live person—be it a teller or another bank representative
• Average fee: $3-$5, depending on account type

How to avoid it: Teller fees aren’t new, and the concept has been around since at least the mid-90s. They’re generally associated with online-only accounts, which typically don’t include in-branch services.

If you think you’ll need more than attention than an online-only account provides, opt for a traditional checking or savings account to avoid teller fees. Eighty-three percent of bank customers still visit their bank in-person, so be mindful of these teller fees if you do sign up for an online-only account.

Bank with Stash

Stash banking can help you avoid excessive bank fees. It won’t cost you anything to set up, there are no minimum balance requirements, and we won’t charge you any monthly or annual fees to maintain the account1.

Here’s a rundown of what we have to offer:

• No overdraft fees.¹
• No monthly maintenance fees.
• No minimum balance fees.
• Access to thousands of fee-free ATMs.
• Early payday—get paid up to two days early.³
• Stash Stock-Back®⁴—Why not earn stock when you spend? If you enroll in the program, every time you make a qualifying purchase at your favorite stores using your Stash debit card, you’ll earn a percentage back as stock.

The post 5 Bank Fees You Should Never Pay Again appeared first on Stash Learn.

My 6-year-old son and I both have pre-existing conditions, including asthma. The steroid inhaler my son needs to use every day has a $250 co-pay until our deductible is paid. That $150 urgent care visit last month found I was in the earliest stages of pneumonia. We don’t have a choice to forgo medical care due to cost, because it could literally cost us our lives.

In 2016, I filed my taxes and claimed an affordable-for-me $6,790 in medical expenses with insurance through the Affordable Healthcare Act (AHA). In 2018, I filed taxes in a state of near panic, claiming a whopping $24,365 in medical expenses through the AHA—same insurance company with no major illnesses, surgeries or hospitalizations that year. It’s an increase of nearly 259 percent.

And I’m not alone. In 2018, Americans spend a collective $3.6 trillion on healthcare or about $11,172 per person. About 20 percent of  working-age, insured Americans reported having a hard time paying their medical bills to the point it caused serious financial challenges, according to a 2016 survey by the Kaiser Family Foundation and the New York Times. (The survey is Kaiser’s most recent on the subject.) Challenges include being able to pay for food, clothing, and basic household items, or being forced to work additional hours or take on additional jobs. For the uninsured, that number spikes to 53 percent.

“The biggest barrier is that things cost too much,” says Caitlin Donovan, a medical billing expert and spokesperson for the National Patient Advocate Foundation, a non-profit that advocates for affordable, quality healthcare for people with chronic, debilitating or life-threatening illnesses.

“What’s hard about health care is that it’s unpredictable,” she says. “Nobody is saying I’m going to get cancer next year so I’m going to make sure my preferred oncologist is in network.”

But there are several things you can do to avoid or reduce massive medical bills, and potentially save yourself hundreds, if not thousands, of dollars without sacrificing necessary medical care.

Here are five things Donovan recommends:

1. Carefully consider your health insurance options

Whether you are insured through an employer or the AHA, carefully compare your options to make sure you aren’t consigning yourself to a year’s worth of financial headaches.

The cost of your premium, or the amount you pay each month for your insurance, should be weighed against the plan’s deductible, or the amount you pay out of pocket before the insurance company pays. So a low monthly premium with a high deductible could cost you more in the long run.

If you have pre-existing conditions, do your homework before signing up with a plan to ensure that your doctors and specialists are in that plan’s network, which will save you money, and that the plan’s prescription drug benefits cover the medications you take regularly.

Most major insurance companies have a website that lets you look up whether a certain doctor is in network, but Donovan recommends calling the provider directly to double check, especially if it’s a specialist you see throughout the year.

2. Stay in network for medical care whenever possible

All health insurance plans, including Medicaid, have a network of providers and facilities included in their coverage. If you see a doctor in that network, they bill the insurance company and you are left paying a smaller amount, such as a co-pay. But if you are treated by a doctor not in your network, you could be on the hook for the full cost, including the doctor’s office visit fee and any tests or medications you received.

That includes hospitals and the providers that work there.

Even if the hospital is in your network, their providers might not be, meaning your insurance coverage may not extend to the bills charged by the doctors who treat you, which could include out-of-network physicians, anesthesiologists or surgeons. It’s a practice called “balance billing” or “surprise billing”and it costs Americans thousands of dollars.

You can try to avoid using out-of-network providers in a hospital setting by making it clear to every doctor and nurse that you see that you only want to be treated by an in-network provider.

Some patients, Donovan says, even resort to putting up a homemade sign outside their emergency room area or hospital room saying “Do not enter this room unless you are in network.”

While it’s not a guarantee, Donovan says, “it’s been effective for some people I’ve talked to.”

3. Watch your medical bills closely for errors

Donovan kept close track of her medical expenses during her third pregnancy.

“One of the things I stumbled across was figuring out how much mistakes would have cost if I hadn’t have caught them,” she says. “It was over $500.”

For example, after the birth of her son three months ago, Donovan says she was charged $250 by one provider. She paid the bill, but upon closer examination realized that provider, who was in her insurance network, never even tried to bill the insurance company. She shouldn’t have been charged at all and it took her eight months to correct the error and get a refund.

“I’m a medical billing expert and I still made this mistake,” she says, adding that she caught another bill that didn’t line up with the explanation of benefits, which would have added $100 more in overcharges.

“If you’re not paying attention to it…you’re going to end up paying more money,” she says. “I’ve never seen a mistake work out in favor of the patient.”

4. Negotiate everything

While you can never be sure if the person on the other end of the phone will have a sympathetic ear, it is worth calling your healthcare provider if you get an unexpected or larger-than-expected bill. First, make sure your insurance has paid for everything they are responsible for, Donovan says, then check the Healthcare Bluebook, an online medical care guidebook that lists reasonable rates for a multitude of medical services.

“Then start working directly with your [healthcare] provider. They have an incentive to work with you because they need to get paid,” she says. “No one is crazy enough to think someone could get a $30,000 bill and pay it in full within 10 days in cash.”

Things to ask for include:

• If they will take the reduced rate paid by Medicare or Medicaid
• If they will take the rate quoted by the Healthcare Bluebook
• If they will give you a cash discount
• If they will set up a payment plan to spread out payments

Also talk to your healthcare providers about your financial situation and any concerns you have about medical bills, even if it makes you feel uncomfortable.

“It’s hard to talk about healthcare, it’s hard to talk about you finances, but you should do it with you provider because they can help you,” Donovan says. That help can include giving you samples of expensive medications or altering your treatment plans with a lower cost option that still gives you the treatment you need.

5. Don’t pay the collections agencies right away

“When you’re dealing with collections the first thing to do is to not pay the bill,” Donovan says. “If you pay a bill to collections, if something is in collections, that means you are claiming it and owning as yours.”

This may sound counterintuitive, but it can buy you time and save you money to avoid paying a bill even after it goes to collections. You may still have to pay your bill in the end, but there are some things you can do to avoid paying a large lump sum.

First, know that the three major credit bureaus have agreed to give consumers 180 days to resolve medical debt before it goes on your credit report. That doesn’t stop your bill from going to collections, but gives you time to resolve it, or at least delay it, before your credit takes a hit.

You can  validate the bill by telling the collection agency the collection agency you want to dispute the debt. They then have 30 days to mail you documents verifying your medical bill and what the bill is for. If they can’t or won’t do that, they have to stop trying to collect.

You can also try to negotiate payments with the collections agency by asking if they will set up a smaller payment plan or even reduced payment plans.”

Donovan has some additional tips for people looking to lower or avoid paying large medical bills:

Understand medical billing jargon, including co-insurance, deductible and copay, so you are clear on what you are billed and what you are responsible. Check out the HealthCare.gov glossary for more information on these topics.

Shop around for prescription drugs. Work directly with the drug manufacturer or pharmacy for a discount or consult GoodRx.com to see which pharmacy in your area sells your prescriptions for the lowest cost.

Use a primary care physician as your first line of defense. Donovan says there is a trend for patients to skip the primary care provider and head straight to a specialist, but the latter may charge hundreds of dollars more for care your PCP could also give.

Avoid potentially unnecessary testing. Ask your provider if it’s really necessary for X-rays, bloodwork, ultrasounds, or other testing. These services might not be medically necessary and can add significantly to your bill.

The post 5 Ways to Reduce Your Medical Costs appeared first on Stash Learn.

Item #1. Automate your savings

We have the best intentions when it comes to putting money aside for the future. We promise ourselves we’re going to put money aside every week. But often, we don’t.

Automation can make saving easier. Recurring Transactions puts it into action for your investments. It’s part of The Stash Way.

You can also now schedule recurring transfers into your debit account! You choose the amount of money to transfer into your Stash debit account and the frequency. 

By automating sums of money into your savings or investments, on a regular basis, you’re reinforcing good money habits.

Item #2. Get rid of hidden banking fees

A dollar here, $20 there—these bank fees can really add up. In 2016, for example, consumers were charged $34 billion in overdraft fees—and that’s just one of many kinds of fees many banks charge.

Stash debit doesn’t cost you anything to set up, there are no minimum balance requirements, and we won’t charge you any monthly or annual fees to maintain the account1.

Item #3. Start saving for retirement

There’s a wonderful life to be led after you stop working. You don’t need a lot of money now to start saving for retirement. Worried you don’t have enough money (or that you’re too young to get started)? Trust us, the best time to start is today.

Consider your retirement savings are a love letter full of cash for when you need it most.

Item #4. Protect your family

We get it. Buying life insurance seems like a really adult decision. But a long-term life insurance policy can provide a financial safety net for partner or kids. in case of your unexpected passing.

It can help your family pay the bills, outstanding student loans, medical debt, or other outstanding expenses. It could be the most important decision you make for your family.

Item #5. Give a child you love a financial head start

Send a child you love into the world with money in their pockets and a solid financial education.

With a custodial account, you can start contributing to it when they’re young–and teach them all about investing along the way. Once they’re over 18 (or 21 in some states), they can use it for college, a down payment for a home or they can take it over and keep contributing to it.

Item #6. Protect your stuff

Good news for homeowners and renters: It doesn’t cost a lot of money to protect your stuff. You can insure all your valuables in case disaster strikes (think fire, busted pipe, or burglary). It can even pay for a hotel if you have to be out of your apartment or home for a while.

The post Change Your Financial Life With These 6 Steps appeared first on Stash Learn.

Let’s start with the basics.

What is life insurance, anyway?

A life insurance policy can provide a financial safety net for your dependents or loan cosigners. 

Who are dependents?  Dependents are anyone that depends on you financially (your partner, kids, an elderly parent, younger sibling). A life insurance policy can help pay the bills if anything should happen to you.

What types of life insurance are there?

There are a few different types of life insurance, including term, universal and whole life, and variable life insurance. Each policy differs in regards to how long it covers you for (your entire life vs. a set period of time) or potential financial benefits in addition to your monthly premium. But all provide coverage in the event that something happens to you.

What is term life insurance, anyway?

It’s called term life insurance because it insures you over a particular period of time, and typically pays out upon your death.

Term life insurance may be a good option compared to whole life for those who are looking for an affordable way to obtain a policy that covers you for a set amount of time. Generally, this can be 10 years, 20 years, or more, depending on what you choose. 

I’m young and healthy. Do I really need life insurance?

If you’ve got dependents or loan cosigners, life insurance can be a good idea.

Here’s the positive news: The younger (and/or healthier) you are, the more affordable your life insurance is likely to be. Plus, you can lock in a good rate that will stay the same for the entire term, or time period, of your policy.

What can my dependents use the money for?

There are no restrictions on what the money can be used for. Your family can use the proceeds to cover funeral costs, mortgage payments, child care, and day-to-day living expenses. It can also help you settle unpaid medical bills or any tax debt that would ultimately be the responsibility of your co-signer.

Is it really expensive?

People generally tend to overestimate the cost of term life insurance. For example, a healthy 35-year-old could get $500,000 of coverage for 10 years for $26 a month from Bestow. 

I like it, but I hate paperwork

You can get a term life insurance quote online in seconds and apply in minutes for an instant decision.

Ready to get covered? Click here to learn more from our partner Bestow.

The post A Quick Guide to Term Life Insurance (And Why You Should Consider It) appeared first on Stash Learn.

For a few bucks a month, you can cover your laptop, your stereo, your clothes, furniture, and everything else in your apartment.

Renters insurance is like a roommate that comes through in the clutch and pays the bills when catastrophe strikes.

Before you send out invitations to your big BYOB housewarming bash, check out all the things that renters insurance can cover.

Party catastrophes

It’s all fun and games until someone knocks over the halogen lamp and starts a fire. Or invites a guest that swipes your cell phone. Or has a few too many and falls through the screen door and breaks a wrist. You’ll wake up with a hangover and a stack of bills.

Renters insurance can protect you against fire, theft, and clumsy party guests. It’s true, your policy can cover you in case your injured friend comes to you with medical bills.

Preserving your friendship and saving your wallet. Nice!

Lame landlords

There’s no insurance policy that can protect your from an absentee or not-so-attentive landlord. But if a pipe bursts or your windows blow out from a storm, damage to your stuff is covered. And if your place becomes uninhabitable, your policy can pay for temporary accommodations until you can move back in.

That’s way better than couch surfing or moving back in with Mom and Dad.

Road trips gone bad

Did you know your policy can actually protect you while you’re out of the house? It’s true. If you’re traveling by car, by train or by plane and lose your phone or other prized possession to pickpockets (or just bad luck), you won’t have to pay to replace it yourself.

Break-ins and burglary

No one likes to think about it but burglaries happen. It can be unnerving to think about a stranger having been in your home and then downright sickening to think about the cost of replacing your valuables.

While no one can replace memories or restore your faith in mankind, you can feel a little better that you won’t have to open your wallet to pay for what someone stole.

Bad dogs

Dogs are the best. Until they bite someone. Your policy can help protect you in case your naughty pup nips someone in your home. It can pay for your injured houseguest’s medical bills and cover you in case of legal liability. Not all dogs are covered so make sure you read your policy carefully.

Let’s review: Renter’s insurance typically can cover:

• Personal property
• Personal liability & medical bills
• Temporary living expenses… in the event of theft, fire, lightning, windstorm, vandalism, freezing, damage from aircraft or vehicles, riots, etc.
  

In short: Your stuff is replaceable. Your sanity isn’t.

Whew.

The post Moving In? Get Renters Insurance To Protect Your Stuff appeared first on Stash Learn.

“As we got closer, we realized it was our roof,” Milam says.

They sped toward their house in Hammond, Louisiana and breathed a sigh of relief to find Milam’s mother-in-law standing in the yard with their two children. While their family was safe, the house they were renting was heavily damaged by both fire and smoke.

And with no renters insurance, Milam, 30, and her husband were left bearing the full financial brunt of replacing their belongings. The damage: About $50,000.

Less than half of people have insurance

Only 41 percent of renters have insurance, compared with 93 percent of homeowners, according to a 2016 poll conducted by the Insurance Information Institute, even though the average annual renters insurance premium is just $188.

While the landlord’s insurance will cover the exterior of the building structure and things like plumbing and electrical work, it will not cover a renter’s personal belongings in the event of fire, theft or storm damage, according to the Insurance Information Institute.

Renters insurance is one of the most cost-effective ways to protect your belongings, according to the National Association of Insurance Commissioners. In addition to fire and theft, most policies also cover damage from vandalism, windstorms, lightning and certain types of water damage, such as burst pipes.

The fire that displaced Milam’s family was caused by faulty wiring, Milam says.

“We have tried to save some special clothing, books, and wood furniture, but it all must be sent to specialists to evaluate if it can be saved,” she said.

They found a new rental house shortly after the fire and immediately began researching renters insurance policies.They found a policy for under $40 per month, and they found peace of mind.

“The cost of the insurance is minuscule in comparison to the losses you could incur,” Milam says.

No insurance, big costs

Nate Masterson also learned about renters insurance the hard way, after accidentally leaving an old electric heater turned on in his Riverdale, New York apartment one cold, winter morning about two years ago.

The appliance overheated and the carpeting caught fire. While the fire department was able to save the apartment and the building from being a total loss, Masterson’s belongings weren’t so lucky. He lost his TV, XBox, speaker system, couch and his prized coffee table, a family heirloom bought at the 1893 Chicago World’s Fair.

“I had to go a good year without these things until I could save up enough cash to replace them,” Masterson says, adding he also had to pay his landlord nearly $15,000 for all the damages to the apartment.

Masterson, 28, hadn’t even considered renters insurance until a friend told him how inexpensive it was and how much money it could have saved him. He began to research and said he “flipped” when he realized how cheap a policy would have been. He now has a renters insurance policy for about $20 per month.

“The moral of the story is to always get yourself covered before moving into any apartment as you’ll at least have some kind of buffer in place in case you’re stuck in an emergency situation,” he said.

Extra insurance for special things

Renters insurance not only covers loss of property due to theft, but it’s also possible — and probably prudent— to get what’s called a floater policy for additional coverage for expensive or high-value items such as jewelry or musical instruments.  

Joanie Knight’s property was totally uninsured when she returned home to find that her babysitter had cleaned out her house in Bogalusa, Louisiana.

“I had returned to work after being a stay-at-home-mom and had only been working for two weeks. I knew the babysitter because her granddaughter and my daughter went to school together,” Knight said. “When I returned on that day, everything in my house was gone or broken, even clothes and bathroom supplies. We recovered some of the major appliances, but lost so much more. We ended up filing for bankruptcy almost one year to the date.”

Knight, 29, and her husband had been researching renters insurance and were waiting for her first paycheck to buy a policy. While the babysitter was prosecuted and Knight received a modest amount of restitution, it wasn’t enough to make up for all they’d lost.

She says they will never be without renters insurance again.

“Anything can happen,” she said. “Even by people you thought you knew.”

It’s a great time to take an inventory of all of your major possessions, including electronics, bikes, furniture, dishes and kitchen appliances, clothing and expensive jewelry.

Knowing how much you stand to lose will ensure you get the right coverage, and it will set you up for a smooth claims process if your possessions do get damaged or stolen.

Masterson said he doesn’t want other tenants to learn their lesson the hard way, as he did.

“For anyone in the position of tenant, it’s imperative for them to have renters insurance,” Masterson said.

The post How Renters Insurance Can Save the Day From Disaster appeared first on Stash Learn.

With this in mind, I let the height fib slide, and we continued seeing each other. After all, I didn’t mind dating a guy who was an inch shorter than me. And I liked that Trevor had a career as a web coder.

I’d been accustomed to dating broke guys who thought a 401K was some sort of dental implant, and it was such a relief to finally find someone who had a salaried, grown up job, like I did at the time.

And so it was a surprise, but not a complete shock, when Trevor said he’d made us a reservation at one of the most expensive restaurants in the city. I figured it was a romantic gesture—a sign we were getting more serious.

“Little lies now,” I thought. “Bigger lies later.”

Dinner was fantastic. After the waiter took our empty plates, I excused myself to the restroom, which was bigger and cleaner than my entire apartment. When I returned to the table, the waiter came by with the check and said, “I put the entire bill on the [gift] certificate. Is that what you wanted?”

Trevor turned bright red, slammed the check down and scribbled what was probably a very bad tip. He took my hand we hustled out.

“What just happened?” I asked.

He looked back at the restaurant. “Why did that waiter blow my cover?”

I was still utterly confused. But my confusion turned to disgust when I realized that he wanted me to think he was spending his own money when it was really a gift certificate from his wealthy parents.

The gift certificate itself didn’t bother me. I’ve used coupons for items under $3. I have no shame. But what stuck in my craw over the days that followed was that Trevor had intended to hide something from me.

I never fully trusted Trevor after the night of the gift certificate. I realized that for Trevor, image was more important than financial honesty. That fact made my stomach turn, and we broke up shortly after.  

You may think I’m nuts for making such a big deal out of a dinner, but before Trevor, it had never occurred to me that people might not be honest about their finances. But it happens all the time.

Big debts, big secrets

And if I thought lying about a gift certificate was bad, I wasn’t prepared for the many people who keep mountains of debt from their partners. A recent study by Student Loan Hero revealed that, among people with more than $6,000 in credit card debt, 32% of of them lie about it to their partners.

Why lie?

Among those who’ve lied, 59% said shame or embarrassment played a role. More than a third said they kept their secret so their partner wouldn’t nag them, 30% didn’t want to start an argument, 28%  feared it’d be a deal-breaker, and 20% reported that they were, at least in part, in denial about their debt. (Note: Respondents were allowed to select more than one reason for lying.)

Denial played a part with Matt Storrs, a lawyer in Queens, who didn’t tell his ex-wife about his mounting credit card debt because he thought a tax refund would negate it. When the refund didn’t cover the secret $5,000 debt, he came clean, and his then-wife was hurt.

“I felt destroyed by how it made her feel. Our relationship’s foundation had a lot of cracks, but this experience was the major rift that splintered those cracks,” Matt said. “Our trust crumbled.”

Be honest with each other

Ben Luthi, the lead researcher for the Student Loan Hero study echoed the sentiment that when you lie about money, you violate a fundamental trust in your relationship.

“As a couple, whether or not your finances are separate or together, there’s still a ‘we’re in this together’ type thing,” he said.

Luthi says one way to avoid the trap of getting into secret debt is to set financial goals with your partner. If you’re both working toward the same goal—buying a house, for example—you’re less likely to go over your personal budget.

“The biggest thing is to communicate,” Luthi said. “Sometimes you’ll do anything to avoid an argument because those are unpleasant, [but]in my experience … it ends up not being as bad as you think.”

The post Lying About Money: When in Debt, Tell The Truth appeared first on Stash Learn.

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We all know how important health insurance is. But why does it have to be so complicated? It’s bad enough that it’s one of the biggest bills we pay each month. But in today’s political climate, it’s hard to understand what’s going on. 

For most of us, we just want to be able to go to the doctor when we’re sick and not have to pay a fortune when the bills come. We all have different health issues that require different kinds of care.

In the U.S.,12.2% of adults are living without any kind of health insurance, according to recent data. And that number is rising.

If you don’t have health insurance or you’re about to kicked off your parents’ plan, this episode with Jennifer Fitzgerald, the CEO of Policygenius, is a must-listen episode.

Ready to start investing? Sign up for Stash and then enter the promo code PODCAST and you’ll get $5 to get started on your financial journey.

The post Podcast: Learn About Health Insurance with Jennifer Fitzgerald appeared first on Stash Learn.