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Federal Employees Still Working Without Pay + An Important Lesson on Emergency Funds

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You may have heard that you should save at least six months of your income saved in your savings account to cover any future financial setbacks. But it’s easy to wonder why you can’t just use credit or help from family when extra cash is needed for an emergency – especially when saving for an emergency fund seems overwhelming. But what does that really mean, and can’t you just use credit or family when you need the extra cash for an emergency?

Unfortunately, Federal employees working without pay during the partial U.S. government shutdown cannot collect unemployment benefits, the Labor Department said, while those who have been furloughed can. This means the 420,000 workers deemed “essential” have also been deemed “ineligible” for jobless compensation. The Trump administration says it will call back another 50,000 federal employees to work without pay. Some 380,000 are currently furloughed.

With this unprecedented government shutdown numbers of people are now trying to figure out how to make ends meet. With a reported 72% of Americans living paycheck, it is now time to stop making excuses and start an emergency fund. Just for kicks and giggles here are some common excuses that people tell themselves about why they don’t need to save an emergency fund:

  • I can barely pay my bills, how on earth could I save on top of that?
  • I can ask my family for money if I really need it.
  • There are options to help me in a bind, like a credit card or payday loan.
  • I’m too young to need to save that much money right now, and can do it when I’m older and making more money.

Let’s say you decide to go one of these three routes instead of saving your own money…

  • If you can barely pay bills now, you will have a hard time catching up with your debt after the emergency is over.
  • If you borrow money from your family or friends, you will put a strain on that relationship, and they may become resentful of you if you don’t pay them back quickly.
  • If you use credit or loans irresponsibly, you may ruin your credit or fall into a debt spiral.
  • If you don’t start saving when you’re young, you’ll miss out on the benefits of compounding your cash and won’t have the luxury of having planned ahead.

So what is an emergency fund anyways?

The Simple Dollar breaks down what an emergency fund should be with their definition:

“An emergency fund is cash that you’ve saved up for the sole purpose of helping you maintain your normal life through the emergencies that life hands you.”

What are some emergencies people prepare themselves for by making an emergency fund? Check all that could apply to you.

  • You get a new job and can now afford to pay your bills and debt while you await your new paycheck cycle to start by transferring some of your emergency savings into your checking account.
  • Your car dies and you must get a new one, but you have money to put down a large down payment, getting you a new car and keeping your monthly payment at an affordable rate.
  • Your new car’s check engine light goes on, and now needs extensive work. You need your car to get to work, and have saved enough to fix it quickly, while using your insurance to get a rental car during the downtime.
  • You twist your ankle from playing basketball and can afford to cover the bills while you’re out of work for weeks.
  • You buy your first home, and during the winter your furnace breaks, costing you over $6,000, which you’re able to afford to keep the heat on for you and your family.
  • You finally get a meeting with the board to pitch your big idea and can afford to go out and buy yourself a nice suit.

How many did you check? Can you see yourself in any of those situations in the future, or did you come up with your own? And I know your next question… Where do I put my money to receive the biggest bang for my buck?

Bankrate.com recently published a comprehensive comparison guide by surveying 4,800 banks and credit unions across the country to give you the ability to make the best decision on where to put your money. This comparison will help you maximize the yield from your deposits. Here’s a link to that guide: https://www.bankrate.com/banking/savings/rates/

Ash Exantus aka Ash Cash is one of the nation’s top personal finance experts. Dubbed as the Financial Motivator, he uses a culturally responsive approach in teaching financial literacy. He is the Head of Financial Education at BankMobile and Editor-in-Chief at Paradigm Money. The views and opinions expressed are those of Ash Cash and not the views of BankMobile and/or its affiliates.

The Daily Digm (News)

Amazon has 30,000 Jobs they Need to Fill + How the Gig Economy is Making it Hard for Them to Fill

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Amazon has more open jobs than ever before. The company is attempting to hire 30,000 permanent employees in the U.S. alone. The jobs are spread out across departments and at locations throughout the country. Filling them is an especially tall order in such a tight labor market, with unemployment hovering near a 50-year low. To get started, the tech and retail giant will hold job fairs on Sept. 17 in six cities: Arlington, Boston, Chicago, Dallas, Nashville and Seattle.

Jobs may be so abundant because of the growth of the gig economy that allows people to work where they want doing what they want. Gig economy jobs continue to grow in popularity in the U.S., accounting for at least 5% of the workforce. So how do you fully take advantage? Moneyish.com recently wrote an article titled: The secret to making $115 an hour in the gig economy

In the article they give us 10 best fields for gig workers based on pay and job availability:

Artificial Intelligence – Deep Learning: $115 per hour
Blockchain Architecture: $87 per hour
Robotics: $77 per hour
Ethical Hacking: $66 per hour
Cryptocurrency: $65 per hour
Amazon Web Services Lamda Coding: $51 per
Virtual Reality: $50 per hour
React.JS Developers: $41 per hour
Final Cut Pro Editors: $37 per hour
Instagram Marketing: $31 per hour

The first trend you might notice is that this list is dominated by tech jobs. Gavin Graham, the special projects editor for FitSmallBusiness.com, says this is because these types of jobs lend themselves well to the gig economy and are growing fields that pay well.

So what exactly do people in the no. 1-rated artificial intelligence-deep learning field do? “They help develop “the technology that drives the ability of artificial intelligence to ‘learn’ and adapt,” says Graham. “Jobs in this field include developers who code the underlying algorithms using tools and programming languages, such as MATLAB, Python, Java, C++, Tensorflow, etc..,” he adds.

One possible surprise on the list: Instagram marketing. It lands on the list because job growth has been very rapid, he explains. While many companies have worked on Facebook and Twitter marketing, their Instagram platforms are less developed — and in need of help.

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Ariana Grande sues Forever 21 for $10 million + How to Protect Yourself From Those Trying to Steal Your Identity

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In a complaint filed on Monday, megastar Ariana Grande said Forever 21 and Riley Rose misappropriated her name, image, likeness, and music, including employing a “strikingly similar” looking model, in a website and social media campaign early this year.

She said this followed the breakdown of talks for a joint marketing campaign because Forever 21 would not pay enough for “a celebrity of Ms. Grande’s stature,” whose longer-term endorsements generate millions of dollars in fees.

This is a classic case of identity theft and while we can’t sue identity thieves for $10 million dollars, there are some practical ways that we could put ourselves less in risk. Here are four ways to protect yourself:

1. Change your password – I know it can be annoying to have to change your password or remember a new one, but it is important that you stop hackers dead in their tracks. Change your password regularly and make sure you include a variety of symbols, so hackers have a tough time guessing what it is.

2. Create a different username and password – Instead of using your Facebook login for all sites, create separate usernames and password per site. This way the breach doesn’t come from another third party, and you can better protect your account.

3. Set up two-factor authentication – Add another layer of protection to your account. Two-factor authentication It is a setting in Facebook where you can choose either text message codes or a third-party authentication as your primary security method. This way you know when someone is trying to do something fishy with your account.

4. Delete your personal info – The next time you log onto Facebook, take the time to delete some of the more personal information you have shared to reduce your risk of exposure in future attacks.

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SATs Keeps its Same Scoring Model + A Scoring Model You Better Undertand

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The SATs are changing course following backlash over a plan to assign an adversity score to every student who takes the exam. The original adversity score was made up of ratings for the student’s school and neighborhood environments and was intended to capture the obstacles a student might have overcome. Critics said over-eager parents could use the score to game college admissions. Instead, the College Board will use a different system in an attempt to capture a test taker’s social and economic background. For many SAT scores can make the difference in so many lives but what other score affects your well-being?

Many people are aware of the important role the credit rating plays in their lives. However, understanding what goes into a credit score (the credit score breakdown) might present some difficulty. There are several different methods of scoring, but most lenders and banks rely on the FICO method that has been in existence since the 1980s when it was developed by the Fair Isaac Corporation. The three prominent credit bureaus (TransUnion, Experian, and Equifax) all worked with Fair Isaac to come up with the FICO algorithm.

Your credit score may be any number from 300 to 850. The average American falls at about 690, which is deemed relatively good credit. However, while this score should secure you a loan, it will not get you the very best interest rates on loan. In fact, 300-640 = Bad Credit, 641-680 = Fair Credit, 681-720 = Good Credit, and 721-850 = Excellent Credit. Excellent credit should be the aim.

Following is the credit score breakdown:

Payment History

The biggest chunk of your score (35%) is derived from your payment history. This score is influenced by how well (or not) you pay your bills on time, how many have been sent to collection agencies, bankruptcies, tax liens, etc. Keep in mind that missing a payment is worse than making a late payment and that being late or especially missing a mortgage payment is a bigger blow to your credit score than missing a credit card or utility payment.

Usage Ratio

The amount of debt you have (compared to the amount of credit you have not used) accounts for 30 percent of your score. Try not to max your credit cards out. In fact, it is recommended that you only use 25 to 50 of the credit that is available to you. A way to balance this out is to obtain more lines of credit and not use them. However, you do not want to apply for a bunch of credit cards all at once as this is marked against you. If your credit is in good standing, apply for a reputable card every six months or so and save it for a rainy day.

Length of Credit History

Fifteen percent of your credit score is based on how long you’ve established credit. This is common sense. The longer your credit history, the better your overall score will be. More data about your past leads to a more accurate prediction of your future credit worthiness.

Credit Mix

Having several types of credit will actually boost your score if they are managed well. This counts for 10 percent of the overall rating.

New Credit

As mentioned earlier, opening new credit accounts all at once will negatively affect your score in the short term. It’s also important that you are aware that your score can be lowered for too many “hard inquiries” about your status. A “hard inquiry” is one that you have authorized a lender to perform. If you are inquiring about your own score, this will not count against you.

Understanding what goes into the credit score breakdown is the first step in improving your score and what will allow you to design your score and begin you on the journey to financial freedom.

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