You’ve done the hard work of creating a budget. You’ve cut frivolous expenses. You’ve crafted a financial plan that lets you tell your money where to go instead of wondering where it went. But even with a steady job and a sensible budget, you still find yourself living paycheck to paycheck. It looks like you’re going to have to find a way to earn some extra money, a side hustle.
With more than 44 million Americans working more than one job, the challenge is a familiar one. As job seekers search for flexible work opportunities, many businesses are busy exploring alternate ways to assemble a workforce of independent contractors.
With hundreds of thousands of individuals working under their respective banners, ridesharing services Uber and Lyft seem to have figured out how to recruit effectively. But as more and more people sign up to be drivers, are they seeing a worthwhile financial reward for their work? A recent study set out to answer that question.
Don’t overlook those operating costs.
Conducted by MIT’s Center for Energy and Environmental Policy Research, this study found that when operating costs were factored together with earnings, Uber and Lyft drivers earned an average of $3.37 per hour. In her article detailing the study, Mashable.com writer Monica Chin shared this explanation of how routine maintenance and travel-related costs can impact overall earnings:
“The study found that because of the high costs of insurance, fuel, and car maintenance, 74 percent of ride-share workers make below minimum wage in their respective states, and 30 percent actually lose money on their jobs. Drivers earn a median of 59 cents per mile driven, while incurring a median expense of 30 cents per mile. 40 percent of those costs were attributed to insurance, maintenance, and repairs, 40 percent to gas, and 20 percent to depreciation.”
Success isn’t automatic. But it’s possible.
As you can see from those statistics, there’s more to making money than just signing up to do the job. Success as an Uber or Lyft driver hinges on a combination of factors such as location, public transportation options, work availability, and smart personal business practices.
If you’ve been thinking about driving for Uber or Lyft, the future isn’t all doom and gloom. It’s possible to make money, potentially even a decent full-time income. The secret lies in approaching the opportunity with the mindset of a business owner instead of an employee. Creativity and efficiency are rewarded. Just showing up won’t cut it.
Can Poor Financial Habits Keep You in the Friend Zone?
Dating is all about discovery. It can be fun to open up and share a few personal details with someone we’re attracted to. In turn, learning more about the other person is a great way to spark conversations that go beyond polite formalities. But while we’re more than happy to show our highlight reels, we all have those things we’d rather not talk about. You know, things like misspelled tattoos. Failed relationships. An affinity for Nickelback. High school, in general. But what about our financial habits?
Is it possible that the way you manage money could have an impact on your relationship prospects? It’s a fair question, and a recent survey of 2,000 millennials uncovered some interesting opinions about debt and its impact on a person’s dating potential.
Does debt matter? Yes. And no.
In short, significant debt is frowned upon, but according to survey responses, it’s not viewed as negatively as being a workaholic. That’s the dating game in a nutshell, isn’t it? Don’t work too little and don’t work too much. Apparently, sensible moderation is attractive. So, what do you do if you’re interested in someone but your finances aren’t as solid as you’d like?
Before you start fumbling for the right words to confess your mountain of debt, don’t get ahead of yourself. Less than 10% of people thought that this kind of information should be shared early on. More than 87% thought it best to wait until the relationship becomes exclusive or moves to the point of sharing household expenses. So, if you’ve just started seeing someone and have more debt than you’d care to admit—relax. You’ve got time.
To share or not to share, that is the question.
Maybe all this talk about debt and dating has you wondering whether you’d be willing to share your most intimate financial details with a potential partner. The survey designers wondered the same and posed an interesting question: Would you rather tell your partner about your large debt or a pre-existing STD? Not surprisingly, the majority of respondents said they’d rather spill the beans about bloated borrowing. But it’s worth noting that more than 39% said they’d find it easier to divulge their most personal medical details.
If almost 40% of people would rather reveal their personal medical history instead of discussing monetary struggles with a potential partner, it’s safe to say debt-related anxiety can impact us emotionally as well as financially. If there’s a takeaway from this survey, maybe it’s the fact that debt and relationships have something in common: Neither improves when ignored.
Three tips for navigating the debt discussion
- Understand your debt. Rather than lumping everything you owe into one negative category, it’s important to remember not all debt is bad. Home mortgages and student loans are traditionally viewed as desirable, while credit card debt and payday loans can be roadblocks to financial success. Knowing the details of your debt is essential to managing it effectively. (It can also help you sound smarter if, and when, the topic comes up on a date.)
- Eliminate bad debt ASAP. High-interest credit cards, auto loans, and title loans can throw you into a tailspin of making minimum payments that never pay down the principle balance. Whether you cut frivolous spending or pick up a side job, find ways to pay off the accounts with the highest rates first.
- Get a good wingman. When it comes to your finances, there’s no shame in admitting you need help. With debt management tools ranging from credit counseling to low-interest consolidation loans, credit unions can play a pivotal role in your financial success. And judging from thousands of survey responses, a solid financial foundation may improve more than just your credit rating.
A large credit card shopping spree is often followed by a large balance the following month. And you may be wondering how you’re even going to keep up with the minimum payments. This kind of uncertainty can set the stage for bad decisions. Before you scramble and sign-up for credit repair services, take a deep breath and realize you have more control than you think.
Risk vs. Reward: Is credit repair worth the cost?
It’s important to remember that some credit repair services are legitimate businesses, able to follow through on their claims. Unfortunately, the reputable companies reside in a corporate landscape littered with scam artists and opportunists.
If you’re willing to devote enough time and research, it’s possible to separate the upstanding services from the scams, but as NerdWallet columnist Liz Weston points out, “If you’re able to do that kind of research, then you can certainly figure out credit repair and do it yourself.”
While the trustworthy credit repair companies aren’t necessarily too good to be true, there’s a good chance they’re too costly to be worth it. When you consider that many of these services charge monthly fees ranging from $30-$100, the boost in your credit rating may not justify the ongoing expense.
Facing credit challenges? Your credit union can help.
Good credit isn’t the result of tricks and trade secrets. It’s established by applying solid financial habits over time. The same holds true for credit repair. While there may be some additional steps required to clean up your credit report, rebuilding good credit requires a consistent commitment to responsible money management.
Turbine Federal Credit Union exists to ensure the financial success of our members. Educating people on proper credit management is part of that mission. If you’re drowning in debt and struggling to regain your financial footing, we could be the lifeline you’re looking for. Discussing your current challenges can be the first step toward putting those struggles behind you.
Repairing damaged credit is no walk in the park. But with a little hard work and dedication and the guidance of your credit union’s financial professionals, you can be on the way to reclaiming the good credit you deserve.
Ready to get started? Stop by our Main Office in Greenville or Aviation Office in Piedmont or give us a call at 864-254-2883.
Online Savings: These Aren’t Your Mother’s Coupons
When they opened their virtual doors in 1994, Amazon.com was merely an upstart online bookstore. Since then, the company’s growth has been nothing short of legendary. After launching its wildly popular Amazon Prime membership program in 2005, the company has cemented its reputation as a leader in the e-commerce marketplace.
But for a company that generated almost $178 billion in revenue in 2017, it seems strange to consider that despite their eye-popping income, much of their success hinges on helping people save money, not just spend it.
All the coupons. None of the clipping.
While Amazon Prime allows members to enjoy exclusive offers and free two-day shipping, one of the company’s lesser-known features, Amazon Coupons, combines the benefits of old-school coupon clipping with the 24/7 convenience of online shopping.
Now, before you smirk at those memories of your mom or dad dutifully leafing through the Sunday paper to save a quarter on toothpaste or 50 cents on laundry detergent, it’s important to remember that today’s coupons are a big deal. How big? According to a recent NCH study, consumers redeemed more than 2.06 billion coupons for more than $3.1 billion (that’s billion, with a “B”) in savings.
While web-based purchases used to be primarily for hard-to-find specialty items, companies like Amazon make it easier than ever to buy everyday products online as well. Sure, you can find incredible savings on big-ticket items like electronics and home furnishings, but since you only purchase these items once every few years, the savings average out over time. Smaller discounts are available on grocery and cleaning supplies, but since you use these more often, the savings can really add up. Whether it’s a huge discount on a big-ticket item or steady savings on everyday items, keeping more of your hard-earned money is a good thing. Savings big is exciting. Saving small is smart.
Saving money is big business.
With more than 44% of all U.S. e-commerce sales in 2017, Amazon has certainly positioned itself as the leader of the online retailer pack. But they’re not the only game in town. There is a staggering array of online coupons and discount codes available. A quick Google search will reveal page after page of potential saving options.
In fact, the savings are so plentiful that companies like RetailMeNot and Coupons.com created their entire business models around compiling online promo codes and coupons in one easy-to-find location. With so many deals available, it’s always a good idea to search services like Amazon Coupons or Coupons.com before you shop online or head to the store.
Save big. Save small. Save often.
The Sunday newspaper may be a thing of the past and coupons may look different than they used to, but saving money remains an essential habit for building a strong financial foundation. And with the mind-boggling multitude of deals and promotions available through services like Amazon Coupons, RetailMeNot, Coupon.com, and others, it’s never been easier to save money on big purchases, small purchases, and every purchase in between.
Do You Have What It Takes to Be an Airbnb Host?
If you’re a homeowner in 2018, there’s a good chance you’ve kicked around the idea of renting out your house through Airbnb. Whether you travel for work or suffer from a perpetual case of wanderlust, you’ve probably thought about opening your house to Airbnb guests while you’re on the road. Maybe you don’t travel, but you’ve considered renting out a spare room to earn some extra money. Either way, you share the same enterprising spirit that helped Airbnb’s founders stumble across a simple idea that changed the way people travel.
Big business with humble beginnings
When a popular design conference led to a sellout of San Francisco hotels in the fall of 2007, Brian Chesky and Joe Gebbia decided to rent out their apartment to Bay Area visitors. After a positive hosting experience, Chesky and Gebbia saw the potential for success on a larger scale. In August of 2008, the roommates teamed up with Nate Blecharczyk and launched Airbnb.
Since then, the company has brokered more than 260 million guest arrivals and amassed more than 4 million listings across 191 countries. While the global scale Airbnb’s success is impressive, the genius of their business model lies in the fact that it offers average homeowners an opportunity to participate in the $1.6 trillion travel industry.
Make your home work for you
If you travel throughout the year or have a spare guest room, listing your house on Airbnb can be an excellent way to leverage your investment, generate additional income, and accelerate your progress towards your financial goals. But before you get blinded by the prospects of teaming up with a business that reported approximately $1 billion in Q3 revenue, it’s wise to consider what it takes to be a successful Airbnb host.
Creating an inviting home atmosphere is important, but there’s more to it than that. As with any business venture, there are risks and rewards. Before listing your home with Airbnb, here are a few pros and cons to consider:
- Extra income. We can all agree this one belongs in the “pro” category.
- Cultural engagement. Since Airbnb offers global exposure, you have the potential to connect with people from diverse cultures around the world.
- Improved maintenance. When you routinely welcome others into your home, there’s a greater tendency to keep your house in order even when you don’t have guests.
- It’s a business. Operating a quality Airbnb property requires regular attention to business-related details like marketing, customer communication, insurance and property maintenance.
- Digital business still involves real people. If you’re not a people person, extended interactions with customers may prove frustrating.
- Risk of loss or damage. While you’re careful with your things, guests may not always be as considerate. When you rent your home, you assume the risk of accidental property damage and unexpected repairs. (This explains the aforementioned insurance.)
When it comes to business opportunities, it’s always a good idea to count the costs before launching your venture. However, if you’re a homeowner searching for an additional income stream to help you establish an emergency fund, pay off student loans, or set aside retirement savings, Airbnb may be the opportunity you’re looking for.
Uber Looks to Change the Travel Game. Again.
Visiting new places is fun. Feeling like a tourist is not.
With the upcoming release of the Uber Local service, Uber is doing all it can to help you feel at home no matter where you travel. The popular ridesharing service has been solving transportation challenges across the world since 2009, and now they’re stepping up their game to help travelers feel more like locals when they’re away from home.
Real-time data enables personalized service.
When you consider the fact that Uber boasts more than 40 million monthly riders, you quickly realize the company compiles massive amounts of travel-related data. Pick-up points. Drop-off locations. Commute times. Time of day. Average mileage. The list goes on. But rather than being content to let all that information sit in a server and gather figurative dust, Uber Technologies Inc has decided to leverage the data and help riders find current hot spots and popular points of interest.
In a recent interview, Alex Otrezov, Uber’s Head of Search and Experimentation, explained the goal of Uber Local by stating, “We use real-time data of our trips, obviously in an aggregate way, to show the hot spots to show where most Ubers are dropping people off. Whether points of interests or restaurants, whatever it may be, we want to make sure that we share that data with our users.”
Make your Spring Break even better with Uber.
With Spring Break just around the corner, you might be one of the millions making plans to get away for a few days. Whether you’re heading to the big city or the beach, there’s a good chance an innovative product like Uber’s personalized operating system would make it easier to find local points of interest that used to require knowing someone who lived in the area.
Once Uber Local officially hits the market, you won’t need to “know a guy” to find trendy NYC restaurants or track down the hottest events in Daytona Beach. All you’ll need is Uber. By utilizing mountains of transportation data and the latest A.I. technology, the world’s most popular ridesharing service will deliver a user-friendly service that tracks shifting trends, provides up-to-the-minute recommendations, and lets you travel like a local.
Financial Quick Fixes Come at a High Cost
Prohibited in 18 states, payday loan companies still manage to offer more than 20,000 locations across the United States, making them more common than McDonald’s restaurants. Banking on consumer desperation, these programs market their services to financially vulnerable customers. When potential borrowers encounter an unexpected money crunch, the appeal of getting instant cash with minimal qualifications seems too good to pass up. If the borrower is employed and receiving regular paychecks, that’s usually all it takes to get a loan. However, these loans traditionally charge rates of 300% annual interest (APR) or higher, saddling the already-struggling borrower with an even heavier financial burden.
Even though a payday loan is designed to be paid off when the customer receives their next paycheck, the outrageous interest charges often make it incredibly difficult to pay off the full amount. Since the average payday loan payment consumes 25-50% of a borrower’s income, the threat of default is extremely high. To avoid defaulting on the loan, many customers elect to pay only the interest charges and roll over the loan for another pay period. According to recent CFPB research, almost 4 out of 5 payday loan customers re-borrow within a month. What started as a temporary fix becomes an ongoing cycle of debt.
High-interest consumer loans: overspending over time
While payday lending companies are traditionally limited to loans of $1,000 or less, there is no shortage of consumer lending companies willing to offer similarly unfavorable terms on higher loan amounts. Like payday lenders, these lenders commonly target individuals with less-than-perfect credit or little to no collateral. But rather than charging outrageous interest rates for short periods, they make their money by charging slightly-less-outrageous rates (59% instead of 300%) over longer periods of time, often 2-3 years.
Consider this example (shown in the graphic above): borrowing $2,100 at an interest rate of 59.39% for 36 months would result in a total payment of $4,644, more than double the original amount borrowed. You don’t need a financial advisor to explain why that’s a bad deal. Fortunately, these lenders aren’t the only game in town.
Credit unions offer a convenient, cost-effective alternative
Because they’re structured as not-for-profit, member-owned financial collectives, credit unions are able to reinvest their earnings into programs that benefit their members—instead of paying dividends to shareholders like traditional banks. This distinction allows credit unions to approve personal loans with lower interest rates and higher flexibility than programs offered by payday lenders or banks.
For more details about how Turbine FCU can help you find smart solutions for your financial needs, stop by one of our local branches.