Why Financial Literacy is Your Best Building Block to Wealth

Financial Literacy with Funding Hawk debt consolidation loans

“Financial literacy” may sound like some heavy-duty brainiac term — but honestly, all it means is how you make your financial decisions based on what you know about money. The “literacy” part isn’t about reading; it’s about understanding basic concepts that are core to how money works. And understanding how money works is critical in making all kinds of decisions that have both short- and long-term impacts on your financial stability — and your life. 

Why do I need financial literacy?

You want to work on your financial literacy so that you are able to make informed, sound decisions about money in your life. But like many things in life, financial literacy isn’t a one-and-done kind of learning; you will keep working on it your whole life. 

And aside from the obvious benefits of being able to make smart decisions about money – keeping yourself out of too much debt, being able to be financially stable — there are also positive health ramifications. Since money is Americans’ number-one stressor, it’s obvious that if you can master basic money skills that you would also be lowering your stress. 

Financial literacy can help eliminate that stress, by giving you skills and knowledge that make it much more likely you’ll have positive financial outcomes in your life. Financial literacy means you’ll be able to understand both basic financial concepts (related to banking and saving) as well as more complex concepts (like credit and interest) that control your money and money outcomes. If you understand those concepts, you can make financial decisions more quickly, more easily, and with better results.

So what do I need to be literate about? 

As we said above, learning financial literacy unfolds over a lifetime, and there are many concepts involved. But there are five basic categories:

  • Banking: Being fluent in how checking and savings accounts work, a basic understanding of interest, and knowing how to write checks and use debit cards.
  • Budgeting: Managing and reviewing monthly income and expenses, with an eye toward long-term goals. Building a budget framework so you don’t live above your means.
  • Saving: Setting aside a portion of your income for both long-term and short-term goals, building and maintaining an emergency fund, understanding how interest rates affect your savings.
  • Credit & Debt: Understanding how borrowing money works and what it costs, from credit cards to loans, learning about debt to income ratio and credit utilization (which impact credit score), being able to evaluation repayment terms, debt solutions and forbearance.
  • Investing: Understanding different investment vehicles, from savings accounts to stock funds, brokerage accounts, robo-investing and more. Contributing to retirement savings. Understanding tax implications and benefits of different investments.

Becoming financially literate about all of the above doesn’t just happen as you live life. Smart money consumers will actively seek out information, ask questions (of bank employees, financial advisors, friends and family), and not worry about looking uninformed. To avoid learning skills that will ease your progress in life because you don’t want to seek assistance is short-sighted; almost everyone needs help in mastering the above concepts.

What if I can’t “afford” financial literacy?

If you think financial literacy is not for you, because you’re struggling with debt or student loans or making ends meet, you’re wrong. Taking time now to learn these concepts will help accelerate your forward movement toward financial stability. Consider spending some time on personal finance websites geared toward education, such as NerdWallet and PennyHoarder.

But if you are suffering a financial hardship right now, or struggling to meet monthly minimums on escalating credit card debt, what you need now is a clear plan to get out of debt.

What Social Security Changes are Coming in 2022?

What changes are coming to social security in 2022

With the new year approaching rapidly, there are quite a few social security changes coming in 2022. Here are some of the main changes happening next year and how they could affect your benefits moving forwards especially for those planning their retirement.

Social Security Payments Will Increase

First, the Social Security Administration (SSA) announced that Social Security payments will increase by 5.9% in 2022. This increase is aimed at combating inflation by helping people maintain their purchasing power. The 5.9% increase marks the largest Social Security cost-of-living adjustment (COLA) in almost 40 years. Given the current state of the economy, this increase is necessary for seniors to be able to retire more comfortably. This is especially true given that the U.S inflation rate rose to 6.8% in 2021, largely due to the global pandemic.

Full retirement age is increasing to 67

The full retirement age will be increasing to 67 in 2022 for those born in 1960 or later. The option to start taking Social Security retirement benefits at age 62 is still available, however, this will result in reduced monthly payments. For example, those who opt for early retirement at age 62 will receive a 30% reduction from the full retirement age benefit amount. Those who choose to wait until age 70 will receive $4,194 per month in Social Security benefits in 2022.

Maximum Social Security Tax Limit Will Increase

In 2022, the maximum amount of earnings subject to Social Security tax will increase from $ 142,800 to $147,000. Most workers pay 6.2% of their earnings into the Social Security system each year until they exceed the maximum taxable amount. Those with an income above $147,000 will not have Social Security tax deducted from their salaries and will notice increased paychecks.

The amount of your Social Security benefits will be taxed according to your income level. If your individual income is between $25,000 and $34,000, 50% of your benefits will be taxed. For married couples, this income range becomes $32,000 to $44,000. Naturally, the percentage of Social Security benefits that are taxed will increase as your income increases. Those with higher incomes will have 85% of their Social Security benefits be taxable.

To learn more about your Social Security benefits, you can visit ssa.gov to get an estimate of what to expect in terms of benefits after retirement.

Are Rent-to-own Homes Worth it?

is rent to own worth it?

Rent-to-own homes are becoming increasingly popular among people looking to purchase a home but are suffering from bad credit scores. While rent-to-own contracts can be mutually beneficial to both buyers and sellers, there are several risks associated with them that should be kept in mind. So, let’s take a look at the benefits and drawbacks of rent-to-own homes to see if they are worth it.

Rent-to-own allows prospective buyers to lease a property for a certain period of time with either an option or commitment to buying it once the lease ends. Both the buyer and seller agree on a purchase price for which the buyer can purchase the home in the future. The buyer is usually required to pay monthly rent and an extra amount which acts as part of their down payment. Eventually, these extra payments will be credited towards the purchase price at the end of the contract. This extra amount is usually nonrefundable and may be lost if the buyer does not end up purchasing the home.

Rent-to-own homes tend to be appealing to some buyers that can’t qualify for a traditional home loan due to bad credit. It also makes sense in markets where home prices are increasing, since the purchase price of the home is usually set a few years in advance. Renting the home before purchasing also allows the buyers to test out living in the house.

However, not paying rent on time or deciding not to purchase the house may cause you to lose all of your previous payments. In addition, rent-to-own contracts do not usually follow a standard template, therefore it is highly recommended to have a real estate attorney take a look at it. Rent-to-own contracts can also be very risky for buyers with poor credit and that are looking to purchase a home. Some sellers will intentionally rent out homes to potential buyers who are struggling financially and will likely be unable to pay the required amount. This means that the buyers will lose a large portion of their money and have nothing to show for it once the contract ends.

Overall, Rent-to-own homes could be worth it for those who are unable to get a traditional home loan and are expecting property prices to rise in the upcoming years. However, this route is a risky one for those who find it difficult to stay on top of their finances.

5 Eco-Friendly Home Repairs That Will Save You Money

5 Eco-Friendly Home Repairs That Will Save You Money

Did you know that residential energy makes up about 20% of the United States’ greenhouse gas emissions? Want to do your part as a homeowner by reducing your residential carbon footprint? Eco-friendly home repairs can help reduce carbon footprint.

The good news is that converting your home into an environmentally friendly abode doesn’t have to cost an arm and a leg. There are many available eco-friendly home products that you can use. While more expensive projects do have a bigger impact, small improvements in how you live and how your household operates are great ways to go green while also saving money.

To start your DIY home projects, here are five eco-friendly home repairs that will benefit your wallet and our planet.

1. Install energy-efficient light bulbs

Whether you’re dealing with a flickering lightbulb or one that no longer turns on, when it’s time to replace them, choose LED bulbs. There are LEDs for every light fixture in your home, including smart bulbs that you can control from your smartphone!

LED bulbs use less electricity and last longer when compared to incandescent bulbs. They also last longer, sometimes up to 20 years!

Not only will you save money on bulbs, but you’ll also save on your electricity bill.

2. Repair leaky faucets

Is there a faucet in your home that has a constant drip? While this may not seem like a big problem, the simple fact is that leaky faucets put unused water, and your money, down the drain.

A faucet that drips one drip per second wastes over 3,000 gallons of water each year. This is more than the amount of water needed to take 180 showers.

Depending on the cause of the drip, you may be able to fix the problem by replacing simple parts, such as the aerator, ceramic disc, or gaskets.

3. Install low-flow shower heads

Another great option for improving your home’s water usage is to replace existing shower heads with low-flow options. These show heads dispense less than 2 gallons of water a minute, and range anywhere from $25 to $300.

With a low-flow shower head, you can decrease your home’s water consumption by up to 40% each year.

4. Use low VOC paint

If your house is due for a fresh coat of paint, choose a brand that offers low VOC. This type of paint is better for you, your family, and the earth. There are many benefits to using low VOC paint, including that it:

  • Has little to no odor
  • Doesn’t impact air quality
  • Reduces contaminants in the ozone layer

There are several notable brands that offer low VOC paint, including Farrow & Ball, Behr, and Para. Benjamin Moore also offers a Natura line, which is splatter resistant, odorless, and is made with 100% acrylic.

5. Install eco-friendly flooring

After years of daily foot traffic, you may be considering a flooring upgrade. New flooring is the perfect time to make your home a little greener.

There are several eco-friendly flooring materials to choose from, including sustainable wood, bamboo, and natural linoleum. These options are sure to look great in any room of your home.

Eco-friendly flooring is durable and is sure to last for years to come. This means less money spent replacing planks or paying for carpet cleaning.

Final thoughts

It’s more important now than ever to reduce your carbon footprint, and what better place to start than right at home? With these five eco-friendly home repairs, you can make your home more eco-conscious while also saving money!

4 Ideas for a Sustainable Labor Day Weekend

4 Ideas for a Sustainable Labor Day Weekend

Time has flown this year! Labor Day Weekend is right around the corner, which means that the unofficial end of summer is just a few weeks away. Labor Day is all about celebrating the economic and social achievements of American workers across the country.

It’s also a great chance to take advantage of the three-day weekend. What better way to celebrate than by planning fun activities for the entire family?

Here are some of the best ideas for enjoying a long holiday weekend while doing your part to be eco-friendly and sustainable.

1. Stay Local

For most families, Labor Day is a great time to get in a final summer getaway. While it’s always nice to visit a new destination, when’s the last time you explored your local community? Chances are that there are all sorts of hidden gems and fun activities that you and your family haven’t had a chance to enjoy.

Staying local is one of the best ways to reduce your carbon footprint. Most means of transportation require the use of fossil fuels, which disperse harmful chemicals into the atmosphere.

If you do plan to travel, consider carpooling to save money while also saving the environment.

2. Always Follow the Three Rs

No matter where this Labor Day takes your family, always follow the three Rs: reduce, reuse, and recycle. Whether you’re going on a hike, to the beach, or having a backyard barbeque with friends and family members, make eco-friendly decisions. Cut down unnecessary expenses to save money.

Some of the best ways to celebrate the holiday sustainably include:

  • Reusable or recyclable cutlery and dishes
  • Disposing of items properly and recycling as much as possible
  • Use simple decorations
  • Use food scraps for compost

Doing your part to protect the earth is a great decision this Labor Day.

3. Try Plogging

Want to burn some energy and make good use of the day? September 2021, Keep America Beautiful is hosting the 3rd Annual TrashDash. This plogging fun run is a great way to join others in a global movement to protect and clean up our planet.

And in case you don’t know, plogging is when you pick up litter while jogging. This is a fun activity that everyone can enjoy.

Be sure to get your plogging practice in, and remember, every piece of litter you pick up ensures a safer and cleaner community.

4. Volunteer

There are tons of ways to volunteer on Labor Day and beyond. One of the most popular volunteer programs is the Great American Cleanup. This is the country’s largest community improvement program that runs through October 18.

This program encourages adults and kids to do their part in cleaning up local beaches and parks. You can even plant a community garden!

Final Thoughts

The last year has been nothing short of challenging. Make this Labor Day Weekend one to remember by doing your part to keep America beautiful and free of trash and litter. Sustainably celebrating the unofficial end of summer fun means that the whole family can have fun while making our planet better.

5 Most Common Eco-Friendly Products for Everyday Use

5 Most Common Eco-Friendly Products for Everyday Use

Global warming is increasing, and the circumstances surrounding it are also getting worse and worse. According to the UN landmark report, it’s the “code red for humanity” because of frequent and intense heatwaves and rising sea levels. Still, when it comes to climatic changes, the majority of end-users, especially the older generations, put their money where their mouth is. Fortunately, that’s not the case with millennials, as 68 percent of them prefer eco-friendly products. If you’re concerned about global warming, then you’ve come to the right place. We’ve compiled a list of the best and common eco-friendly products that you can buy for everyday use. Let’s get started.

Rechargeable Batteries

Batteries have become one of the essential household items. Yet, a range of different chemicals are used to make batteries, and most of them are toxic. Not only are these chemicals harmful to the soil, but they can also cause water and air pollution. Consider using rechargeable batteries to keep them from landfills by prolonging their usage. You might need to pay more for rechargeable batteries, but in the long run, you’ll be able to save a lot by helping the environment at the same time.

Check Price on Amazon

Eco-Friendly Toothbrush

BPA (Bisphenol-A) can cause infertility, and it’s usually found in plastic. You can now easily find toothbrushes with BPA-free soft bristles and handles made of bamboo. These toothbrushes also have plant-based packaging, and they can easily last as long as traditional plastic-made toothbrushes do. Not only do these toothbrushes help you play your part to save the planet, but they also keep you from medical conditions caused by BPA.

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Reusable Grocery Bags

We use about 500 billion to one trillion plastic bags across the globe every year. Carrying a reusable shopping bag is an easy way to help create a sustainable society. It’s important to note that some malls and big grocery stores have already stopped offering plastic bags to discourage their use. The trending reusable grocery bags such as Tote bags also allows you to stay fashionable. 

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E-Reader

If you’re an avid book reader and a fan of paperback, then you might be negatively affecting the environment. You can eliminate this possibility by getting an e-reader. Kindle is one of the most popular e-readers available in the market, and it’ll come in handy if you frequently buy new books. It allows you to buy any book you want whether you’re interested in the best books about money or on any other subject. Most importantly, you won’t be harming trees this way. 

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Organic Dish Towels

Instead of using paper towels, you can now opt for 100 percent organic dish towels made of cotton. You can wash them multiple times by throwing them in your washing machine as well, just like any other cloth, to reuse them again. 

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Final Words

There are many other common eco-friendly products out there as well to replace your everyday items. These are the most common ones to get you started. You can start using these products right now on a daily basis to play your part in conserving the environment. 

You may also check 5 Best Green Products for Everyday Use!

The Real Cost of Paying Just the Minimum Card Payment

The Real Cost of Paying Just the Minimum Card Payment

Making your credit card’s minimum payment is better than no payment at all. It’s also better than racking up late fees and falling behind. But if you’re looking to pay down your debt, paying the minimum card payment isn’t going to get you very far.

Paying just the minimum amount can cost you hundreds, possibly thousands of dollars in interest charges. Here’s why the minimum payment can cause major problems now and in the future.

It Will Take Longer to Pay Down Your Balance

Credit card issuers typically set very low minimum payment requirements. Why? So that they can make money off fees and interest charges.

Most issuers will ask for a fixed amount, such as $25 or $30 a month, or a set percentage of the balance, whichever amount is greater. There are also cards that only require you to pay as little as 1% of the balance, plus fees and accrued interest.

While these are great options if you’re in a financial bind and need to put money towards other expenses, paying the minimum card payment is not a smart long-term solution.

Look at the “Minimum Payment Warning” on your monthly statement. These numbers show how much interest you’ll pay and how much time it will take to pay off the current balance if you pay just the minimum.

If you’re serious about paying debt and minimizing interest paid, pay more each month. Paying twice the minimum amount cuts the repayment period in half.

More Money Towards Interest

Unless you have a 0% APR card, interest is tacked onto your running balance. By making just the minimum payment, you’ll find that the amount is barely enough to cover last month’s interest. You’ll see little to no change to the principal balance.

The cycle of just paying interest fees becomes even worse if you continue to charge items to the card. The end result? You fall further behind and owe even more interest.

By paying just the minimum amount, you’re taking two steps forward and one step back.

Your Credit Score May Drop

When your credit card balances increase, your credit score may drop. This is because your credit utilization ratio increases. Ideally, this ratio should be no more than 30% of the credit limit on the card.

Credit utilization is a major factor in determining your worthiness as a borrower. This means that keeping high balances by paying just the minimum card payment could cause your score to drop.

Having a low credit score:

  • Makes it harder to qualify for loans
  • Means higher interest rates for future loans or credit cards
  • Could affect your ability to find a job
  • Could impact your ability to rent a home

The best way to protect your credit score is to pay more than the minimum payment and to avoid getting into further credit card debt.

The Minimum Means Major Problems

The real cost of paying just the minimum card payment is a hefty one. Depending on your balance and interest rate, you could be throwing away hundreds, maybe even thousands of dollars towards interest charges.

Take control of your finances and get serious about paying down debt. Pay as much as you can on your highest interest card, and then move on to other debt. Check options to gain sustainable money from home. The less debt you have, the more financially independent and secure you’ll be.