Category: Credit 101

A Parent’s Guide to Setting a Successful Budget for a College Student

The post A Parent’s Guide to Setting a Successful Budget for a College Student appeared first on Penny Pinchin' Mom.

 You are getting ready to send your child off to college. Before you start helping them pack their belongings, there is one thing you need to do.

You need to help them create a budget. You need to teach them how to manage their money so they can learn the tools they’ll use long after they graduate.

WHY DO COLLEGE STUDENTS NEED A BUDGET?

The truth is everyone needs a budget. It does not matter your age. If you are dealing with money, a budget is necessary.

  1. Allows you to control your money. Rather than your money telling you what it wants to do, you get to tell your money where it needs to go. You are always in control when you have a budget.
  2. It teaches financial skills. A budget helps ensure that expenses such as rent, tuition, food, insurance, transportation, and housing are paid – before spending money on the fun stuff. (It also helps to make sure you don’t spend more than you make.)
  3. Makes you aware of where your money goes. When you use a budget, you see how you spend. It is very simple to see if too much is going toward dining out when you should be building your savings.
  4. Helps you track your goals. You need to cover expenses but you should also work on building savings at the same time. Your budget allows you to not only see those goals but track them in real time.

DOESN’T A BUDGET MEAN YOU CAN’T HAVE FUN?

Not at all! If anything, your budget will allow you to have guilt-free fun.

For example, the budget may allow you to spend $50 a week dining out. That means you can go to dinner with friends once (possibly twice) a week and enjoy yourself. You won’t be left wondering how you are now going to make rent.

WHAT TYPE OF BUDGET SHOULD YOUR STUDENT USE?

There are various methods of budgeting such as the 50/30/20 and the zero-based budget. For most college students, the zero-based is the simplest and easiest to follow.

The reason is that you track everything. You give every penny a job. That means if you earn $1,500 for the month that you “spend” the entire $1,500.

You will first cover the needs (food, shelter, transportation) and then your wants. If there is money “leftover” after this is done, it can be added to your savings.

You can use other types but if you have never budgeted before, using this method is the simplest.

WHAT SHOULD A COLLEGE STUDENT INCLUDE IN A BUDGET?

The budget will vary for each person, as the income and expense will be different. However, these are the most common categories that need to be included in a budget:

  • Rent
  • Renter’s insurance
  • Car payment
  • Car insurance (also saving for annual renewal fees)
  • Food
  • Clothes
  • Utilities (phone, electricity, gas, water, etc.)
  • Tuition
  • Fees
  • Entertainment (movies, games, concerts)
  • Dining out
  • Emergency fund savings

Again, you may have items that are not included above or see some that you do not need.

However, the most important thing of all is that every penny is given a job. Account for everything you will spend each month so you never have too much month and not enough money.

HOW DO YOU KEEP TRACK OF YOUR BUDGET?

For most college students, apps or digital trackers are the best options.  But, before you rush and sign up, keep the following in mind.

  1. Cost. Many apps are free and they will work perfectly fine. Other apps have a monthly fee attached to them. If you plan to use one of them, make sure you include that as one of your regular expenses. However, do not let the cost alone be a single factor when it comes to clicking the sign-up button.
  2. Security. Your security trumps all else. You need to make sure the app uses encryption as well as two-factor authorization.

Some of the best apps include:

  • Mint
  • You Need a Budget (YNAB)
  • PocketGuard
  • Mvelopes

However, your student may also like the traditional paper and pencil method – and that is OK as well.

Find the right one that works best for your student. That is all that matters.

TEACHING THEM TO BUDGET

Knowing you need a budget and where to track it is just the beginning. You need to teach your child how to budget.

Start by looking at each category that they need on their budget. You may already know the cost for each category but if not, you may need to make phone calls or do research to know.

For example, you know the rent for the apartment is $850 a month but how much are the average utilities? Ask the manager for these costs so you can include them in the budget.

Next, decide how much they want to allow themselves to spend on food. Show them how much a meal costs for a single person at each restaurant you eat at so they can create an average.

You will then have them decide how much “fun money” they want to include as well. You can base this on them wanting to go to the movies two times a month, one concert a month, or attending three events.

Now you can see the expenses for your student. Add their income to the budget and deduct the expenses. They will see if they are operating in the black (money left over) or in the red (spending more than they make).

Show them how to adjust the numbers by increasing their savings or lowering the amount they can spend on clothes – until the budget equals zero. Zero meaning they are spending every penny they earn.

And making them keep track now will help ensure they stay on track well into the future.

 

 

 

The post A Parent’s Guide to Setting a Successful Budget for a College Student appeared first on Penny Pinchin' Mom.

Source: pennypinchinmom.com

Do College Rankings Matter?

student at college campus mobile

All articles about college rankings should perhaps be read with a grain of salt and primarily through a lens of what matters most to individuals about the college experience and what they’re hoping it will be an investment toward.

Prominent publications and people have conveyed a variety of views about whether college rankings matter:

The editor-in-chief of the Science Family of Journals said no in May 2020. “To any logical scientific observer, the fine distinctions of where schools show up on this (U.S. News & World Report Best Colleges) list are statistically meaningless—but try telling that to a roomful of alumni or parents,” H. Holden Thorp wrote.

Ian Bogost, distinguished chair at Georgia Tech, wrote in The Atlantic in June 2020: “The absurdity of a numerical ranking mechanism for colleges becomes apparent the moment you look at how U.S. News calculates it. The methodology reads like a Dungeons and Dragons character sheet: 8% for class size; 10% for high-school-class standing; 4.4% for first-to-second-year student retention, and so on.”

But just because the consensus leans toward “no” doesn’t mean it should be the last word on anyone’s ultimate decision about where to go to school.

Even U.S. News & World Report says on its best-colleges website: “The rankings provide a good starting point for students trying to compare schools. … The best school for each student, experts say, is one that will most completely meet his or her needs, which go beyond academics.”

What Are the College Rankings?

There is no single, ultimate, etched-in-stone set of college rankings. All over the world, there are entities using a wide array of criteria to appraise universities.

Rather than expecting a “yes” or “no” to the question of whether college rankings matter, it would be more beneficial to understand why “It depends” could be more appropriate.

If you’re aiming for an education from a prestigious school, and money is no object—well, first of all, congratulations and good luck.

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8 Tips to Save Money on Meat

TipstoSaveMoneyonMeat

Buy It in the Morning

Looking for deals on meat? Hit up the supermarket in the early morning. That’s when they’ll be restocking the meat case, and you’ll have the best bet at finding a deal.

Buy in Bulk

Ask at the deli counter of your supermarket for “bulk ends,” and ask if there’s a discount! These end bits of sliced meats are too small to slice in the machine, but can be sliced or cubed at home. They’re often offered at half off!

Befriend the Butcher

When does your supermarket mark-down meat? It’s as easy as asking the butcher. Especially if you’re friendly, he or she will usually be happy to let you know this valuable savings secret.

Market Watch

Supermarkets have started using their own wording on meat packages to make you think that the product you are buying is a better grade than it really is. Most of the major chains are buying more select-grade beef, but may call it by any number of fancy names such as “top premium beef,” “prime quality cut,” “select choice,” “market choice,” or “premium cut.” Be aware that these titles don’t actually mean anything!

Ask for Discounted Cuts

Grocery stores make a lot of money on meat, so it’s not surprising that they display the priciest cuts in the case! Experience dramatic savings by instead asking the butcher to slice different cuts for you from the same primal (or section) of the cow or pig. These cuts can be as little as one-fifth the cost of the expensive, pre-packaged cuts, and they’ll be just as tender and tasty. Here are a few discounted (yet delicious) cuts you can ask for: Instead of buying ground beef, ask the butcher to grind up a bottom round roast for you. If you’re looking for rib eye steak, request chuck eye. (You may need to ask the butcher to cut a 4-inch roast off the front of the boneless chuck, then to peel out the chuck eye and cut it into steaks.) Instead of pork tenderloin, buy an entire loin roast and ask the butcher to cut it up for you.

Buy Bigger Hams

If you’re going to buy a canned ham, purchase the largest one you can afford. Most smaller canned hams are made from bits and pieces glued together with gelatin. Cured hams are injected with a solution of brine salts, sugar, and nitrites. The weight of the ham will increase with the injection, and if the total weight goes up by 8 percent, the label will usually say “ham with natural juices.” If the weight of the ham increases by more than 10 percent, the label must read “water added.”

Make Your Own Patties

Never buy meat that’s already been shaped into patties (unless it’s on sale). Instead, buy your own and shape into patties yourself. Place a sheet of waxed paper between each, then place the entire stack in a resealable plastic bag and put in the freezer.

Leaner Isn’t Always Better

Even if you want to prepare low-fat meals, you don’t always need to buy the leanest (and most expensive) ground beef. If you’re preparing hamburgers on a grill or on a broiler rack, most of the fat will be lost during the cooking process, so stick with the moderately lean varieties.

For more ways to save money from all over the internet, check out our Saving Money board on Pinterest. And don’t forget to sign up for our newsletter and follow us on Facebook for daily tips!

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Source: quickanddirtytips.com

6 Signs Your Personal Finance Software Makes Life Easier

6 Signs Your personal finance software makes life easier

6 Signs Your Personal Finance Software Makes Life Easier

Finding personal finance software is easy, because there are countless choices in mobile apps, online programs, and finance software you can run on your home computer. But they’re certainly not equal. Personal finance software should make your life simpler, not more complicated, and it should be customizable for your particular life, goals, and needs. You know you’ve found great software when your financial life becomes easier over time. Here are 6 signs your personal finance software makes life easier.

1. You Haven’t Paid a Late Fee in Months

Does your personal finance software let you know in advance of when bills are due? It should be easy to set up automated alerts that tell you a few days before monthly, quarterly, or yearly bills are due, so you can take care of them and avoid annoying and guilt-inducing late fees. Ideally your software should notify you by text, so you’ll be sure and get the message whatever you’re doing and wherever you are.

2. Spending Categories Correspond to Your Actual Life

When personal finance software requires you to shoehorn your actual spending patterns into pre-set spending categories, the result can be confusion and frustration. Look for software that lets you create an unlimited number of spending categories you can customize. Do you buy your employees breakfast once a month? You can make a spending category for it. Are you a coffee or microbrew aficionado? You can make a spending category for it. Your budget should conform to your life, not the other way around.

3. You See How Trimming Budget Fat Affects Financial Goals

Sometimes it just doesn’t feel worth it to hold back at the grocery store after a long day or when buying Christmas presents. But when your personal finance software shows you exactly how disciplined spending helps you achieve your financial goals, like a vacation or paying off a loan, it’s easy to avoid giving in to those little temptations you face every day. When you can see how your discipline pays off, you’re more likely to stick with your good habits.

Start now: Get budgeting software from Mint to help manage your finances and make everyday life simpler by clicking here.

4. You May Have Faced One or Two Painful Truths

Powerful personal finance software can tell you things like how much you spent on fast food last week, or how much you’ve paid in non-network ATM fees this month. Sometimes, getting control of your personal finances means facing some harsh truths, like how much those little extras add up to. Your software should also be able to tell you how much more quickly you can reach financial goals if you cut a certain dollar amount from various spending categories. It’s a great way to stay on track to your goals.

Meeting finance goals with personal finance software5. You Know Exactly How Close You Are to Meeting Financial Goals

Maybe you want to save for retirement, or build up a down payment on a home. Your personal finance software should show you exactly how close you are to your goal at any time. You should also be able to receive monthly emails that track your progress and see how your everyday spending decisions affect how much you’ll have left over at the end of the month. Don’t settle for software that doesn’t let you track your progress easily.

6. Your Personal Finance Software Goes With You Everywhere

Personal finance software that links your computer and your mobile devices empowers you to make smart spending choices anytime, anywhere. Thinking about buying an item you unexpectedly find on sale? You can check your account balances right on your phone and know instantly if you can afford it. You can also set up convenient alerts that can tell you right away such things as whether you’re approaching your credit limits on your credit cards.

Personal finance software has come a long way since the days you had to manually enter checkbook balances and draft amounts. Today’s software offers an astonishing array of features that not only help you achieve financial goals, but actually make your everyday life easier. And when it links your accounts to your computer and your mobile devices, like Mint does, you have all the budget tools you need, wherever you go.

Start now: Get budgeting software from Mint to help manage your finances and make everyday life simpler by clicking here.

The post 6 Signs Your Personal Finance Software Makes Life Easier appeared first on MintLife Blog.

Source: mint.intuit.com

Things Break. How to Make Sure Your Emergency Fund Can Cover Them

Things seem to have a way of breaking down at the worst times. Here’s how you can make sure you’re prepared for the worst.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Source: thepennyhoarder.com

Credit 101: What Is Revolving Utilization?

Aerial view of a young woman with brown hair contemplating her revolving utilization. She has a pen in her mouth and an open notebook on her desk.

According to Experian, the average credit score in the United States was just over 700 in 2019. That’s considered a good credit score—and if you want a good credit score, you have to consider your revolving utilization. Revolving utilization measures the amount of revolving credit limits that you are currently using, and it accounts for a large portion of your credit score.

Find out more about what revolving utilization is, how to manage it, and how it impacts your credit score below.

What Is Revolving Credit?

To understand revolving utilization, you first have to understand revolving credit. Revolving credit accounts are those that have a “revolving” balance, such as credit cards.

When you are approved for a credit card, you are given a credit limit. If you have a credit card with a limit of $1,000 and you use it to buy $200 worth of goods, you now have a $200 balance and an $800 remaining credit limit.

Now, if you pay that $200, you again have $1,000 of open credit. If you pay $150, you have $950 of open credit. But your credit revolves between balance owed and how much open credit you have available to use. How much you have to pay each month—known as the minimum payment—depends on how much your balance owed is.

Other forms of revolving credit include lines of credit and home equity lines of credit. They work similar to credit cards.

What Isn’t Revolving Credit?

Unlike revolving credit, installment loans involve taking out a lump sum and paying it back in an agreed-upon fashion over a set term of months or years. Typically, you agree to pay a certain amount per month for a certain number of months to cover the amount you borrowed plus any interest.

With an installment loan, the amount of your monthly payment is determined by your loan agreement, not the balance due. Common types of installment loans include vehicle loans, personal loans, student loans, and mortgages.

What Is Revolving Utilization?

Revolving utilization, also known as “credit utilization” or your “debt-to-limit ratio,” relates only to revolving credit and isn’t a factor with installment loans. Utilization refers to how much of your credit balance you’re using at a given time.

Here’s how to determine your individual and overall credit utilization:

  1. Look at your credit reports and identify all of your revolving accounts. Each of these accounts has a credit limit (the most you can spend on that account) and a balance (how much you have spent).
  2. To calculate individual utilization percentage on an account, divide the balance by the credit limit, and multiply that number by 100.
    1. $500/$1,000 = 0.5
    2. 5*100 = 50%
  3. To calculate overall utilization (all revolving accounts), add up all of the credit limits (total credit limit) and all of the balances (total spent) on your revolving accounts. Divide the total balance by total credit limit, and multiply that number by 100.

If you have a credit card with a $1,000 credit limit and a balance of $500, your utilization rate is 50%, for example. For the same card, if you have a balance of $100, your utilization rate is 10%.

When it comes to your credit score, revolving utilization is typically calculated in total. For example:

  • You have one card with a limit of $1,000 and a balance of $500.
  • You have a second card with a limit of $4,000 and a balance of $400.
  • You have a third card with a limit of $3,000 and a balance of $600.
  • Your total credit limit across all three cards is $8,000.
  • Your total utilization across all three cards is $1,500.
  • Your revolving utilization is around 19%.

How Can You Reduce Revolving Utilization?

You can reduce revolving utilization in two ways. First, you can pay down your balances. The less you owe, the less your utilization will be.

Second, you can increase your credit limit. If you apply for a new credit card but don’t use it, you’ll have more open credit, and that can reduce your utilization. You might also be able to ask your credit card company to review your account for a credit increase if you’re an account holder in good standing.

Find the Right Credit Card for You

What Is Revolving Utilization’s Impact on Your Credit Score?

Your revolving utilization rate does impact your credit. It’s the second-largest factor in the calculation of your credit score. Your utilization rate accounts for around 30% of your score. The only factor more important is whether you make your payments on time.

Why is credit utilization so important to your score? Because to lenders, it can say a lot about you as a borrower.

If you’re currently maxed out on all your existing credit, you may be struggling to pay your debts. Or you might not be managing your debts in the most responsible fashion. Either way, lenders might see you as a riskier investment and be less inclined to approve you for loans or other credit.

How Do You Know If You Have a Revolving Utilization Problem?

Sign up for Credit.com’s free Credit Report Card. It provides a snapshot of your credit report and gives you a grade for each of the five areas that make up your score. That includes payment history, credit utilization, age of credit, credit mix, and inquiries. The credit report card makes it easy for you to see what might be negatively affecting your credit score.

You can also sign up for ExtraCredit, an exciting new product from Credit.com. With an ExtraCredit account, you get a look at 28 of your FICO scores from all three credit bureaus—plus exclusive discounts and cashback offers as well as other features—for less than $25 a month.

Sign Up Now

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Source: credit.com

How to Use a Grocery Price Book to Get the Best Deals

The post How to Use a Grocery Price Book to Get the Best Deals appeared first on Penny Pinchin' Mom.

Have you ever wanted to learn how to find out when those items you need will be on sale?  Believe it or not, stores usually cycle sales on schedules.  By learning how your store does this, you can always get the best deals and know when to stock up, and when to pass on those deals.  The secret is learning how to use a pricebook.

A price book is also called a grocery price book.  And, it is just what it sounds like – a book which tracks the prices of the items you need at the stores where you shop.

A Price Book is a list of the products you purchase and the prices you pay
to watch for sales trends and cycles.

It will take time to create yours, but once you have it set up, it is easy to maintain and will help you know when those prices are at their lowest, allowing you to stock up and save as much as possible.

 

How Do I Make a Grocery Pricebook?

You want to make sure that what you use is simple enough that you can maintain it.  If you are a techy person, you might want to use something on your smartphone.  If you are a paper list maker, then you might want to go with an easier method like a spiral notebook or binder with inserts.  You can even create a spreadsheet on your computer.   The way you track does not matter.  What matters is that you just do it.

You will want to keep the list organized, however, by breaking it down by the department or possibly even product.  For instance, you will want one sheet for your dairy items, one for meat, one for produce, one for breakfast foods, etc.  That way, when you need to find the prices (and update it), you can easily find it.

 

What Do You Include in the Book?

No matter which method used to create your book, you will want to make sure to keep track of the products you purchase.  These will include:

  • Date
  • Store
  • Product/Brand
  • Size (oz, product count, etc)
  • Price
  • Per unit price

You can create your own form, can print one out below.  Just click the image to learn how you can get one that you can use.

How Do I Create My Price Book?

The simplest thing to do is to start keeping your receipts.  Once you shop, write down the information based on what you purchased.  It takes a little work up front to get started, but eventually, the book will be easy to maintain and you’ll get the hang of it.

To calculate your per unit prices, you will need to make sure you know the product size.  That might mean extra notes when you shop or updating the price book as you put your groceries away.  To determine a per unit price, take the price and divide that by the size.  For example, if you are looking at diapers you would calculate the price per diaper as follows:

$17.49 / 84  = $0.20 per diaper

You can simplify this even more by updating a price book while you shop.  Most stores have the per unit price listed right on the shelf for you.  That makes it simpler for you as you can just write down the price in your book.

Do I Ever Change the Price?

Yes!  That is the reason a Price Book works!  As you shop, you might have a price for an item listed in your booklet, but you find it on sale for less.  You will want to update that price in your book as that means there was a sale.

When you see it on sale again the next time, you might start to learn the sales cycle, such as every six weeks or every 12 weeks.  Doing this is how you learn when to shop for the items you need.

How Do I Make the This Work for Me?

Before you shop, you will want to consult your pricebook to see if the items on sale are the lowest price or if you know you can get a better deal.  If your Price Book shows a lower price, it doesn’t mean you shouldn’t buy that product.  It just means only purchase whatever amount you need to get by until the item goes on sale again at the lower price.

On the flip side of this, if you find that the price in the weekly ad is lower than what you show in your price book, it might mean that you not only need to update your price book pricing, but it also will let you know that it is a good time to stock up at this low price!

Does the Book Do More Than Share Sales Cycles?

It sure does!  If you find a great coupon, you will know in advance about what you will pay at the store.  Your price book helps you determine which store you want to shop at so you can use the coupon for the best deal.

A price book can also help with your budget.  If you find that you’ve got “too much month and not enough money” left until your next payday, you can make your list and know ahead of time what you can expect to pay at checkout.  This way, there are no surprises, and you can adjust your shopping list before you shop!

grocery pricebook

The post How to Use a Grocery Price Book to Get the Best Deals appeared first on Penny Pinchin' Mom.

Source: pennypinchinmom.com

Should You Consider Pet Insurance?

man with his dog on a computer

Owning a pet comes with an array of costs, and medical care can be one of the big ones. Does that mean you should get health insurance for your pet? Is buying pet insurance worth it?

Insurance policies for pets are more worthwhile for some pet parents than others. While a policy that covers general pet wellness and preventive care may not make economic sense (since the cost of the premiums can be similar to cost of care), a policy that covers accidents and illness can be a smart money move, particularly for pet parents who would have trouble covering a hefty vet bill should Fluffy or Fido suddenly get sick or injured.

But plans vary significantly on what they cover—and what they cost. Here are some key facts to consider when shopping for a pet insurance plan.

Average Cost of Pet Healthcare and Emergencies

Between food, daily care, equipment and toys, the cost of owning a pet can be high. The cost of veterinary care can also stack up pretty fast.

Pet healthcare costs vary widely, depending on region and what kind of care your pet may need. But, according to the American Pet Products Association , dog owners spend an average of $212 per year on routine vet visits, while cat owners shell out an annual average of $160 on routine care.

Heartworm tests and prevention can tack another $35 to $132 to the annual healthcare bill, while flea and tick prevention can cost $40–200 per year.

Even a healthy pet may need emergency care, ranging from a few hundred dollars to well over $1,000 Wound treatment and repair, for example, can run as high as $2,000 for a dog. Emergency surgery for a large dog can cost between $2000 and $5000.

What is Pet Insurance?

Once a niche product, pet insurance policies have been steadily gaining in popularity. Indeed, many employers now offer pet plans as part of their benefit packages. But what exactly is pet insurance—and how does it work?

Like health insurance for people, pet insurance companies help ease some of the costs of keeping your pet healthy. You can choose from different levels of coverage, with each plan costing a monthly or annual premium based on how much coverage you choose.

cash management account. If your pet is young or healthy, or you choose a lower tier, you can get accident and illness coverage for a fairly low cost, which pet owners may find well worth the security of knowing your pet can get the help it needs.

But it’s key to read the fine print. Many plans limit the amount you can claim, either annually or over your pet’s lifetime. If your pet is unfortunate enough to suffer a major medical problem, you could quickly max out your plan’s limit and find yourself paying the difference.

Depending on the cost of the premium, wellness-only and wellness add-ons may not be worth the price, since they can end up costing about the same, or potentially more, as paying out of pocket for routine care.

Alternatives to Pet Insurance

Again, like humans, unexpected expenses can come up from time to time, but that doesn’t mean they need to hurt your pocket.

Another way a pet-owner can pay for both expected and unexpected medical bills that come with pet ownership is to have an emergency fund specifically earmarked for your pet. Stashing just a little bit of cash each month into your pet care fund can slowly add up to a significant financial cushion.

Whether you do or don’t spring for pet insurance, you can lower the cost of pet care by monitoring your pet’s diet and exercise and staying up to date on needed vaccines. This can help keep your pet from needing emergency care—and prevent getting hit with an outsize medical bill. Even knowing the most common ailment associated with your pet can prevent a minor problem from turning into something major.

The Takeaway

Buying pet insurance that covers accidents and illness can be a reasonable hedge against a multi-thousand dollar vet bill. The payoff for wellness coverage, however, is less clear, as the amount you pay may be close to the amount you would have paid anyway.

If you decide to take out pet insurance, do your homework and make sure you’re aware of all the policy’s limits and exclusion.

Ready to adopt a new fur baby? Setting up an emergency fund for Mittens or Rex can be a smart money move. SoFi Money® makes it easy to set aside just a little money each month to cover unexpected pet care expenses.

Learn more about SoFi Money today.



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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com