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Hey MoneyLion, my name’s Austin Hankwitz and I talk about personal finance and investing online. I’ve compiled a list of a few things that you should keep in mind. It’s important to remember that this video is just for informational purposes. You should speak to a tax professional if you have questions about or need help with your taxes.

Let’s break down three things: filing your taxes for free, reporting crypto or stock investments, and changes to charitable deductions. By understanding these things, hopefully we can save some money together.

And just so we’re all on the same page, let’s quickly walk through basic information on how taxes actually work – because a lot of people don’t understand. There are a lot of deductions and other but the basics are that in the US we have a progressive tax system – which means taxation progressively increases as your income increases. There are 7 federal tax brackets, ranging from 10% to 37%.

To put some numbers around this – let’s assume you’re not married and made $45,000 in 2021. The first $9,950 you made was taxed as 10%, totaling about $1,000. After you made that first $9,950, every dollar you made beyond that was then taxed at 12% – until you hit about the $40 thousand dollar mark. This is about another $3,700 in taxes – bringing your total now close to $5,000.

That last $5 thousand you made above $40 grand was taxed at 22% – which is $1,100 in taxes. Right? A progressive tax system – taxation increasing as your income increases.

Great! You now have some background on how taxes work so let’s talk about filing them for free. If you make less than $72,000 per year, the IRS will help you file your taxes – for free, you just have to answer some personal questions. Google “IRS free file” – it’ll take you to an IRS.gov URL with more information. If you make more than $72,000 you can still fill out and file the forms yourself. Boom! You just saved yourself about a hundred bucks.

The second thing to know is there are requirements about reporting any stock and crypto transactions. For most apps and platforms  – they’ll either give you something called a Form 1099-B or a complete history of your transactions, which you may need to complete your taxes. If you have questions about this form, you should speak to a tax professional. 

Heck, maybe you lost money in 2021 – you might be able to deduct that.

Speaking of deductions, our final highlight here are the changes to charitable deductions in 2021. Ordinarily, people who choose to take the “standard deduction” on their taxes cannot claim a deduction for their charitable contributions. But, there was a temporary law passed in 2021 which allows you to deduct up to $300 in charitable contributions on top of the standard deduction. So if you donated to a qualifying charity, this is something that you may want to look into.

Video Summary

The tax season is coming once again, and it’s just as complicated as ever. Taxpayers shift through paperwork and look for ways to save. We’ll share some tax-saving tips and provide an overview of how the tax system works. 

Taxes explained

The U.S. tax system operates under a progressive structure. The more money you earn, the more you’ll pay in taxes. The U.S. tax system features seven brackets ranging from 10% to 37% in taxes. You’ll pay a different tax amount depending on if you’re single or married. 

We’ll use the example of an unmarried 45-year-old to calculate taxes. Based on the 2021 tax brackets, the first $9,950 gets taxed at 10%. The next $30,575 gets taxed at 12%. 

At this point, the IRS has taxed $40,525 of the single filer’s earnings. The remaining $5,000 gets taxed in the following bracket, with a 22% tax rate. As you move up the tax brackets, you’ll pay more money to the government.

Tax brackets can change at any time as dictated by the IRS. The IRS expanded 2022 federal income tax brackets for taxes due in April 2023, helping taxpayers save money for the 2023 tax season.

3 tips to save money on taxes 

Knowing the structure provides some clarity on your total tax payment. A tax professional can help you verify how much you’ll owe the IRS. 

Filing your taxes isn’t only about how much you pay. Taxpayers can utilize various strategies to save money during tax season. We’ll share three of our favorite tips to save money and get prepared for the tax season.

Tip #1: file your taxes for free

The IRS lets taxpayers who made less than $72,000 file their taxes for free. You can Google “IRS free file” for more information. The IRS will ask you some personal questions and then assist with the filing fee.

Taxpayers who earned more than $72,000 can still file their taxes for free. You can fill out the form yourself and save yourself the $100 filing fee.

Tip #2: reporting stocks and crypto transactions 

Most stock and crypto platforms will provide you with Form 1099-B or they’ll give you a list of your transactions, which you can then submit to the IRS. You should briefly review your transactions to ensure they match up. The 1099-B form will provide information on dividends and capital gains.

If you report a net loss through your investments, you can use it as a deductible. At the end of the year, some investors sell laggards to show a net loss. Then, they repurchase the same assets over 30 days later to avoid triggering the wash sale rule. 

If you can demonstrate a loss, you’ll save money. You’ll pay some taxes on this year’s capital gains, but you can consider selling underperforming stocks in November or December to save on next year’s taxes. 

Tip #3: use charitable deductions

The IRS recently made a new rule that helps you use charitable deductions. The original structure prevented taxpayers from putting charitable deductions on top of the standard deduction. 

The IRS changed this rule and currently allows taxpayers to deduct $300 on top of their standard deduction. If you donated to a qualifying charity last year, you can save on this year’s taxes.

Any taxpayers who donated more than $300 should itemize their deductions. Itemizing your deductions takes extra work but it often saves you more money than the standard deduction.

Save money when filing your taxes

We all have to pay taxes on our income. Taxes fund various state and federal programs designed to enhance the country. Taxpayers can avoid overpaying and keep more money in their pockets. You can reach out to a tax professional to discover all of the ways you can save money when filing taxes

The holidays have come and gone, and the next ‘holiday’ season has officially begun – tax season. Before you get stressed out and keep scrolling, let’s talk about what a tax return is and a few different ways you can consider using yours.

Hey MoneyLion, my name’s Austin Hankwitz, and I talk about personal finance and investing online. I grew up in a small town in northeast Tennessee, and probably like you, I definitely did not learn enough about taxes in high school or college. But that’s alright – there’s no better time than the present to find out more information.

First, what’s a tax return? Well, it’s a piece of paper or electronic file that reports your income, deductions, tax credits, and more to the Internal Revenue Service (“IRS” shown on the screen with frightened face emoji). That’s it. 

When I say “income,” you may be thinking of your wages stated on your W-2 that you receive from your employer. However, you may also receive other sources of income, such as money you made driving Uber or some other side hustle. You might also have investment income, so keep an eye out for the infamous “tax forms available” notification from your broker.

To maximize your tax return, you can consider claiming deductions. Deductions are specific expenses you’ve made this year that you can take off from your income and can lower your tax bill. There are different kinds of deductions, so be sure to look into the best options for your situation. 

Another way you can try to maximize your tax return is by taking advantage of tax credits you’re eligible for. Tax credits can lower your overall tax liability, with the Advance Child Tax Credit Payments in 2021 being a recent example. There are tons of other examples, so you may want to look further into them. 

Alright, we got the boring stuff out of the way. If you want more information, feel free to go to MoneyLion.com/taxes to view some helpful articles. 

Now you know about tax returns and where to find more information about them. But what can you do if you receive a tax refund this year? Everyone’s situation is different so consider using the money wisely for your situation. Let’s rapid fire-off a few options:

If you have debt, consider paying off high-interest debt like credit cards. If that’s taken care of, you can put your refund towards your emergency or “rainy day” fund. The amount you save for these purposes depends on your personal circumstances, but a generally accepted principle is to save 3 to 6 months of expenses.

If your savings account is established, you can also consider investing that money toward the future. 

We’d all like to build our wealth and reach our retirement goals. One way people do this is by investing in the stock market, which has returned roughly 10% per year on average for nearly the last century (Source: Nerd Wallet). With that in mind, you can invest your tax return money in well-diversified funds.

So there we have it! If you’re lucky enough to get a tax refund this season, there are a lot of things that you can consider doing with it, including paying off debt, saving for a rainy day, or investing the money that you may not have even planned to have in the first place.

A brief heads up — this is a sponsored video. MoneyLion and I have partnered to make important financial lessons easier to understand. My name’s Austin Hankwitz, and we’ll see you on the next Beyond the Wallet.

Written disclosure: This video is sponsored by MoneyLion. All content is for informational purposes only. 

This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes.

Let’s talk about the elephant in the room. We’re now in the heart of tax season and you’re likely not happy about it. Trust me, I’m NOT either – but let’s talk about some things that may help you better understand your tax obligations to Uncle Sam.

Hey MoneyLion, my name’s Austin Hankwitz and I talk about personal finance and investing online. I grew up in a small town in northeast Tennessee and, probably like you, I definitely did not learn enough about taxes in high school or college. But that’s alright – there’s no better time than the present to learn more.

First – let’s have a quick refresher on deductions. They’re exactly what they sound like – specific expenses you’ve incurred this year that are deductible from your income and can lower your tax bill. One of the most puzzling things about taxes is knowing what you can and can’t claim. 

For example, did you know that you can claim state sales taxes as a deduction? On your tax return, you can choose between deducting state & local income taxes or state & local sales taxes. For states like Florida, Texas, and my beloved Tennessee – this means you may want to consider writing off sales taxes because you already don’t have state income taxes. Keep in mind, the total of your deductions for state and local income, sales, and property taxes is limited to $10,000 per year for individual filers.

Moving along now, Did you know that you can claim property deductions? That’s right – you’re able to deduct mortgage insurance premiums, home mortgage interest, and real estate taxes paid to the taxing authority during the year.

Felt generous over the past year? Good karma may be coming your way because you can claim charitable contributions. You can deduct charitable cash donations, as well as give away items or property to qualified organizations. 

Let’s not forget to claim the contributions to your individual retirement accounts. The total of the contributions to all of your traditional and Roth IRA accounts is $6,000, plus another $1,000 for those over 50 years old. If you have a traditional IRA, your contributions are tax-deductible. Contributions to a Roth IRA aren’t deductible.

Perhaps you had some big-time medical expenses this past year? Well – you may be able to claim medical expenses to help lower your tax bill. In general, you can deduct the amount of qualified, unreimbursed medical expenses that exceed 7.5% of your adjusted gross income for that year. That’s a mouthful, but the point is if you had a large hospital bill or other medical expenses that weren’t covered for you  – you may be eligible to claim this deduction.

These are just a few of the many deductions you may be able to claim on your tax return. Remember – you always have the option of taking the “standard deduction.” These (italicized wording below is shown on screen) are the 2021 standard deduction amounts for different types of tax filers. If the total of your claims wouldn’t add up to more than these values – it may be best to go with the standard deduction.

$12,550 for single and married filing separate taxpayers

$18,800 for head of household taxpayers

$25,100 for married filing jointly 

And there you have it! Not the most fun subject, but one you may find useful as you prepare your tax return this year. 

A brief heads up — this is a sponsored video. MoneyLion and I have partnered with the goal of making important financial lessons easier to understand. My name’s Austin Hankwitz and we’ll see you on the next Beyond the Wallet.

Written disclosure: This video is sponsored by MoneyLion. All content is for informational purposes only. 

This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes. 

My name is Austin Hankwitz and I talk about personal finance and investing online. I grew up in a small town in northeast Tennessee and graduated from the University of Tennessee with a degree in finance and economics.

So what is inflation? Simply put, inflation is the overall increase in prices. Inflation is going to the grocery store and seeing your weekly gallon of milk cost $4.00 compared to the $3.50 it was priced at last year. Inflation is going to the pump and seeing the price of gas increasing from $3.00 to $3.50 since January.

Right? The overall increase in prices.

So how is inflation actually calculated and what can we do about it? Inflation is calculated through something called a “consumer price index” – sounds complicated, it’s not. You can think of the consumer price index as a basket of goods and services – this includes the price of food, energy, transportation, and shelter – all the essentials.

When the price of our food, our gasoline, our bus fare, and our rent increase – so does the consumer price index. So by keeping an eye on how much the consumer price index increases allows us to better predict and understand inflation.

Haha, we’ve predicted and understood now that inflation has hit a 30-year high – what do we do about it? Well, first – know that this doesn’t happen often so don’t panic. Again, this is the highest it’s been in over 30 years. Next, think about a high yield savings account. The goal here is to have our cash earn interest over time to offset the increase in prices elsewhere. Finally, consider talking to your employer about an annual raise. Talking about your desire to “just keep up with inflation” could help your case.

Remember, highest in over 30 years – nothing to panic about. We got this.

Video Summary

Inflation has many people worried about the economy and rising costs. While inflation normally holds out at roughly 2%, inflation soared 6.2% in October 2021. This rapid growth represents the highest inflation in 31 years. 

It’s natural for people to panic when their weekly gallon of milk costs $3.50 instead of the $3 it cost a year ago. However, panicking is never the solution. We’ll outline a plan and give you a breakdown of inflation to help you make smarter decisions.

What is inflation?

Inflation is the overall increase in prices. Groceries, rent, and transportation suddenly cost more. Inflation gets measured by the consumer price index. This index is a basket of goods and services that covers food, energy, transportation, shelter, and other essentials. 

The average price increases across multiple goods and services provide an average inflation rate. Some goods and services inflated above 6.2% in October 2021, while others inflated at lower rates. However, the average economic rate of inflation was 6.2%.

Keeping up with inflation

We have entered a 31-year high for inflation. However, we likely won’t see 6.2% year-over-year inflation in the future. Countries practice several measures to prevent inflation from staying out of control for multiple years. 

The federal government projected four interest rate hikes in 2022. Higher interest rates will decrease the money supply, leading to lower inflation numbers in the future. 

As prices rise, consumers will demand salary increases to offset higher costs. Some companies quickly offer higher wages to keep up with inflation and retain top talent. Other companies will offer higher salaries to attract new employees and help them keep up with inflation. Higher wages don’t happen immediately, but they eventually arrive and help employees beat inflation. 

Increasing your salary by the CPI rate helps you keep up with inflation. If your employer does not offer a suitable raise, you can work an extra side hustle to beat inflation. Trimming your expenses by 6.2% also helps you stay in line with the CPI.

The purchasing power of your money will decrease as it remains unused. A high yield savings account helps you keep up with inflation. Earning a higher return on your capital enables you to keep up with inflation. 

Build your financial health

Focusing on your financial health during high inflation gives you greater control. Your three most reliable steps to counter inflation are the following:

Lower your expenses

Increase your income

Invest your money

Using our suggestions and tips could have you on the right path for a better financial future!

Hey MoneyLion, my name’s Austin Hankwitz and I talk about personal finance and investing online. I grew up in a small town in northeast Tennessee and when I got my first job – I had to figure out how to build my first budget. Let me share with you what I’ve learned.

Money Life Lesson: Long story short, it’s called the 50/30/20 Rule. By using this rule you can have balance between your wants, your needs, your savings, and your investing.

The Daily Deposit: Let’s zoom out. The average household in America makes $65,000 per year. (source pub and headline in title)[1]  We all know money will be taken out for taxes, so let’s assume you’re actually putting about $48,000 in your bank account annually, or $4,000 per month.

Using the 50/30/20 rule we’ll be allocating 50% of our take-home pay toward needs – this means rent, utilities, groceries, transportation.. things you can’t live without. Notice I didn’t say any type of groceries, right? We’re always being smart and thoughtful about the food we buy at the store. But, 50% toward the necessities, or $2,000 per month.

Next, we’re going to allocate 30% of our monthly pay toward wants – this is dining out, buying new clothes, those subscriptions… that’s right, I’m talking about you, Netflix. Pin down what exactly a want is vs. a necessity. Looking to allocate $1,200 per month here.

Finally, we’re going to allocate the remaining 20% of our monthly pay toward saving, investing, or paying off our debt. That’s $800 every single month you either pay off debt with, or stash away in a savings account.

If you’ve adequately done both of those things, you can also put money aside for a down payment on a home or investing toward retirement if you want. A little can go a long way if you regularly budget.

And just like that you can create a great game plan for building a budget that lets you live a little, while also being responsible with your money.

A quick heads up: this video is sponsored by MoneyLion. All content is for informational purposes only and should not be construed as financial advice.

Video Summary

Wealthy people establish budgets for themselves. These budgets govern their spending and investing habits. Building your first budget can help you achieve your net worth target and practice financial responsibility. This financial instrument is easy to create and apply within your life. We’ll outline some budget building strategies to help you gain control over your finances. 

How does building a budget help your finances?

Building your first budget forces you to clarify key financial metrics. You’ll control each purchase and assess its impact on your life and finances. We all want to have fun, but overspending hurts our long-term financial health.

A budget helps you balance wants, savings, needs, and investing. Maintaining harmony across these four areas reduces stress in our lives while increasing happiness. A budget acts as the roadmap to achieve your vision. 

The 50-30-20 rule

The 50-30-20 budgeting rule is a simple rubric for budget mastery. This rule determines money allocation across your needs, wants, and savings. 

50% of your take-home salary goes towards needs. These needs include food, water, shelter, and other essentials. Be thoughtful when considering necessities. You need clothing to survive, but you don’t need luxury brands to survive. 

Luxury clothing and other wants get 30% of your take-home salary. Wants range from subscriptions to vacations. You don’t need them to survive, but they enhance your lifestyle. The 30% allocation prevents you from going over the top with your wants. However, it provides enough space to have some fun.

20% of your take-home salary goes towards savings. Budgeters store this money in their bank account or put it into investments. This money compounds over time and provides financial security. Saving and investing help with retirement and provide a buffer if you quit your job or get fired.

Consider taxes before spending your money

We’ve mentioned the “take-home” salary several times. You’ll receive paychecks from your employer or clients if you provide a service. The government will stretch out its hand and ask for some of that money.

Many people get surprised by taxes and scramble to accumulate funds for their bills. Plan for taxes in your budgeting before spending a penny. The 2020 U.S. Census Bureau pegged median household income at $67,000. This household income comes to $5,583 per month.

Instead of using $5,583 as your monthly budget, pull money out for tax purposes. Taxes vary based on a person’s location and the deductions they can legally claim. Paying $19,000 in taxes leaves you with $48,000. Use this number when building your first budget so you don’t get caught off guard by tax season.

A little can go a long way. Practicing financial responsibility with your money now will set you up for a more attractive retirement in the future.

Does it surprise you when you hear about a rich dude going into debt on a big loan? I guess my first impression was that loans were for the rest of us, but it turns out: loans are everywhere. 

Good news for us, from student loans to mortgages: they all have the same general concept and characteristics, so in this video I’m going to break down what you can generally expect out of a loan.

Hey MoneyLion, my name’s Austin Hankwitz and I talk about personal finance and investing online. I grew up in a small town in northeast Tennessee and after I graduated college, I was stuck with some student loans. Let me walk you through what I’ve learned about them.

Money Life Lesson: Loans are pretty easy to understand – when you borrow money in the form of a loan you need to pay back the amount you borrowed plus a bit extra, called interest, by a specific date.

The Daily Deposit: Maybe you’re in the situation I was – you want to go to college but you can’t pay for it. So, you take out a loan to pay for college aka student loans. This loan, like many others, has a few specific characteristics that you need to understand.

One, the loan amount – how much are you borrowing, and therefore, how much do you need to pay back?

Two, interest rate – how much extra money do you need to pay back on top of the original amount you borrowed? This is usually expressed as a percentage and is “billed” annually.

Three, the term of the loan – when does the total amount of money need to be paid back by?

There’s another huge factor:  fees. Every loan is different, and many fees are listed in the fine print. Some loans come with origination fees, or upfront fees to even borrow the money. Some have prepayment penalties, or extra fees you pay for paying off the loan early – which blows my mind, but anyway. Things to watch out for before you borrow.

Boom! Now you know how loans work. Remember, borrowing money can be a slippery slope – so don’t get too carried away.

A quick heads up: this video is sponsored by MoneyLion. All content is for informational purposes only and should not be construed as financial advice.

Video Summary

Loans help us acquire goods and services even if our bank accounts fall short. Rich people frequently take out loans to fund new initiatives. While we can select from various loans, they all have the same concept and characteristics. We’ll explore everything you need to know about understanding a loan. 

Why do people take out loans? 

People take out loans to cover financial gaps. Homebuyers make a down payment to acquire their home. A mortgage loan closes the gap in the purchase price. Students also take out loans to afford their college education.

Some people take out loans to outperform the interest rate. Some billionaires finance their homes because they can outperform interest rates by putting the extra money into the stock market, rental properties, or another asset. When taking out a loan, you’ll come across many choices. Pay attention to these characteristics before taking out a loan.

Loan amount

The loan amount measures how much you borrow. You’ll receive immediate access to extra funds to help with your purchase. However, you will have to pay back the loan amount over time. Taking out an oversized loan can add significant stress to your finances. Just make sure you only take out as much principal as you can pay back.

Interest rate

Every loan comes with an interest rate. This rate indicates how much you’ll pay on top of your principal. Lenders take a risk when handing out loans. Interest payments reward lenders for the risk they incur. Review multiple loans to find the most attractive rates. Raising your credit score and making a larger down payment can both reduce the interest rate on your loan.

Loan term

Every loan has a deadline for repayment. Loan terms are the payment schedules for your loans. They indicate monthly payments and how long the loan lasts. You can lengthen the term of the loan to reduce the size of your monthly payments as well. However, this will also result in you having to pay more interest payments over time. Shorter loan terms make it possible for you to repay the debt quicker. 

Fees

Each loan is different, and some come with fees. Review the fine print before taking out a loan, so you don’t get hit with a surprise. You may find many fees, but these two show up in many loans:

• Origination fee: the upfront fee you pay for taking out a loan
• Prepayment penalties: penalties for paying off the loan early

Borrow money responsibly

Borrowing money is a slippery slope. Some people borrow too much too soon and fail to keep up with interest rates. Before borrowing money, establish a budget, so you borrow the right amount. In some cases, you can adjust your loan term to make the debt more manageable.

The good news? They’re pretty straightforward to understand. The bad news? They can impact your life in a lot of ways. Let’s break it down.

Hey MoneyLion, my name’s Austin Hankwitz and I talk about personal finance and investing online. I’m from a small town in northeast Tennessee and didn’t know a thing about interest rates until I opened my first savings account.

Money Life Lesson: Let’s start with the easy stuff. What’s an interest rate? It’s the cost of borrowing money or the reward that you receive for saving it.

You may be borrowing money to buy your first house or get that new car. But borrowing money isn’t free – you have to pay a fee on top of that, usually expressed as a percentage called an interest rate.

On the other hand, banks are actually borrowing money from you when you leave cash in a savings account. Right? You’re letting the bank borrow money in the form of deposits, and they’re paying you interest for the use of it. This “use” is usually them giving out other loans.

The Daily Deposit:

That’s simple enough – but who sets the rates? The Federal Reserve does. “The Fed” changes interest rates to manage inflation and keep us out of recessions. When interest rates are low, banks are able to give out loans at a lower cost to you and me – allowing us to borrow money to spend more easily.

During the pandemic, the Fed lowered interest rates a lot to encourage people to borrow and spend more money. We’re now nearly 2 years into this and interest rates are still low. People can take advantage of the low-interest rate by doing things like refinancing their mortgage – especially if they’re paying PMI or “private mortgage insurance.”

So why do rates ever get raised? Because remember – the Federal Reserve is also in charge of inflation, not just recessions. When the economy returns to normal strength, rates need to be raised back up to prevent runaway inflation.

Video Summary

Interest rates heavily influence saving and spending. Businesses and consumers monitor these rates before borrowing money. Savers review interest rates before stashing their money into a checking or savings account. Tweaks to the interest rate can lead to economic prosperity or recessions. Want the inside scoop on interest rates? We’ll explain everything you need to know. 

Interest rates explained

Interest rates represent the cost of borrowing money and the reward for saving it. You’ll pay a fee to borrow money which gets expressed as an interest rate. Lenders charge this fee to lower their risk and earn a return on their investment. 

In exchange for the interest fee, you get access to capital sooner. Home and auto buyers often finance most of the purchase. If you make a 20% down payment, you’ll only need $100,000 to buy a $500,000 house. The bank is on the hook for the remaining $400,000 that must be paid, hence the interest payments.

You’ll earn interest on your checking and savings accounts. The banks borrow this money for issuing loans. Since banks make money from the interest rates, they provide lower interest rates to incentivize savers. This dynamic explains why checking account rates fall far below mortgage interest rates.

Why do interest rates change? 

Interest rates occasionally change. The Federal Reserve System, or the Fed, sets rate percentages as part of the monetary policy. When the Fed keeps rates the same, it’s business as usual. 

However, the Fed may increase or decrease rates at any time. Both decisions have pros and cons. Plus, the Fed often lowers rates to stimulate economic activity. 

Lower rates help businesses and consumers borrow more money. People can more easily afford a house, while companies can fund expansion efforts. Lower rates also help homeowners refinance for better rates and ditch private mortgage insurance if they’re paying into it.

Lower rates lower the cost of borrowing money. This policy increases the money supply but also risks inflation. Too much money will rapidly deteriorate the dollar’s purchasing power, leading to inflation. 

The Fed counters inflation by raising rates, thereby raising the cost of borrowing money. This policy restores order for the domestic currency, but it also risks a significant economic slowdown. 

These pros and cons explain why the Fed gradually modifies interest rates. Rushing to raise rates can lead to a recession. Lowering rates too quickly or resorting to negative interest rates can double the prices of goods and services.

Interest rates impact our budget. We need to plan for them and look for the most attractive rates for our purchases.

Hey MoneyLion, my name’s Austin Hankwitz and I talk about personal finance and investing online. I grew up in a small town in northeast Tennessee and I couldn’t qualify for a credit card until I was 22 years old. Now my credit score is 780. Let me share with you what I’ve learned.

Money Life Lesson: Like a loan, credit cards have terms, characteristics, and considerations to think about before getting started.

Exclusionary Context: But once you master the process, you can collect cashback on your everyday purchases as well as rack up points you can spend on things like travel and hotels.

The Daily Deposit: Let’s rewind. 2018: I was applying for a credit card. I was denied everywhere because I didn’t have any sort of credit history. Because of this, I had to take out something called a secured credit card.

I went to my bank, gave them $300 in cash, then borrowed against that cash in the form of spending on my new credit card – meaning my card had a $300 limit on it.

Consideration #1: if this is your first credit card – you might have to open a secured credit card.

Consideration #2: once you have a credit card and you’re spending money on it – how much should you spend on it? Generally speaking, you never really want to spend more than 10-20% of your total credit limit. Since mine was $300 at the time, that meant keeping my credit card spend below $60 per month. I used it for my Netflix subscription.

Finally, consideration #3: “fees and interest.” – Being smart about spending means you can avoid paying them. In the fine print on a credit card application, there’s something called an interest rate disclosure. If you don’t pay off your credit card every month in full, you’ll be paying that interest rate on the remaining balance. That’s when debt can accumulate… quickly.

Debt can be avoided by paying off your credit card bill in full every month. Now, when it comes to annual fees – there are several solid cards out there by well-known companies offering great perks on spending with $0 annual fees. Don’t fall for the trap that you have to get a card with a big bad annual fee. And no – your card doesn’t need to be made out of metal.

Congrats, you now know more about credit cards than I did when I was 22. Use this knowledge to help you responsibly earn some cash back, rack up points for that next vacation, so you can ultimately build your credit score, which can unlock a world of financial possibilities.

A quick heads up: this video is sponsored by MoneyLion. All content is for informational purposes only and should not be construed as financial advice.

Video Summary

Credit cards provide many perks such as cashback, free points, and travel miles. These financial assets build up your credit score, a vital metric that can give you access to numerous opportunities. 

However, a credit card can feel intimidating for the first time and lead to debt. We’ll share some credit card considerations to help you build your credit smartly.

How to get a credit card with no credit

Most credit card companies will want to see trustworthy credit history before giving you a card. Your credit score helps companies determine if you can manage debt responsibly. This requirement puts most applicants in a Catch-22 since most people use credit cards to build credit. 

A secured credit card provides a viable alternative. You can put money into a secured credit card and use that amount as your credit limit. This credit card won’t have perks like cashback on everyday purchases or points. These cards help beginners with building credit. 

Understanding your credit utilization ratio

Your credit utilization ratio measures how close you get to your credit limit. It impacts your credit score and ability to incur future debt. If you have a $3,000 limit and you’re $300 in debt, then you have a 10% credit utilization ratio. A credit utilization ratio below 20% helps your credit score the most.

Credit cards with higher limits provide more leeway. However, a secured credit card gives you less wiggle room. Some of these cards have $300 credit limits. A few purchases can quickly inflate your credit utilization ratio into a dangerous territory. 

Stick with a single subscription for your secured credit card. One subscription keeps you within your ideal credit utilization ratio range and sets you up for a better card. Once you get a better credit card, you’ll get a higher credit limit. You can raise your credit limit or pay down debt to lower your ratio.

Navigating fees and credit card debt

Fees and debt scare away most people from taking out a credit card. However, these cards help people rack up rewards and build credit. Any cardholder can avoid interest payments by paying debt on time. 

Only spend as much as you can pay off within the next 30 days. Any late payments will carry into the next month. Interest will build up your principal and snowball unless you pay on time. 

A credit card’s interest rate disclosure reveals your card’s interest rate. Most credit card companies charge double-digit interest rates. Check your credit card statement each week to ensure you stay on top of debt.

Some aspiring credit card holders come across cards with annual fees. Avoiding these cards and opting for zero fee cards lowers your costs and still provides many perks. 

Responsibly earn cash back, get points, and build your credit score one payment at a time. A credit card can open new possibilities if you use it correctly.

Hey MoneyLion, my name’s Austin Hankwitz and I talk about personal finance and investing online. Despite growing up in a small town in northeast Tennessee, I plan to retire wealthy – here’s exactly how.

Did you know that there are different types of retirement investing accounts? Let’s take a minute and touch on the two most popular ones.

First – let’s talk about 401k’s. 56% of employers in the United States offer a 401k plan to their employees. Simply put, this is a retirement savings plan with specific tax advantages. It was created by Congress in 1978 to encourage Americans to save for retirement – and it worked! The 401k plan is the main wealth-building vehicle 80% of millionaires credit their success to (credit source to Dave Ramsey research).

Here’s how it works – as an employee, you delegate a specified percent of your annual salary to be contributed toward your 401k retirement plan. People usually choose between 3-6%. Every paycheck, the money is automatically invested on your behalf. The best part? You’re able to write the total amount invested annually off of your taxes.

From a tax perspective, these can be great if you anticipate being in a lower tax bracket during your retirement.

If you’re really lucky, your employer might even match your contribution with money of their own. But don’t worry if your employer doesn’t do this – only 27% of companies in the US do. If you’re currently working a job that offers retirement planning, make sure to review all of the available options and choose what works best for your long-term goals.

Let’s now pretend you’re on the other side of the aisle and your employer doesn’t offer any sort of 401k plan – then what? Simple. Roth Individual Retirement Account.

Generally speaking, it’s the same thing as I just described with a 401k plan – BUT there’s no employer investing the money on your behalf. It’s you! There are a few rules you need to follow – like not investing over $6,000 into the account per year and still making sure that this isn’t money you’re planning on pulling out until you’re nearly 60 years old.

From a tax perspective, this is great for those that would rather go ahead and get taxed on the money they’re investing now – and enjoy the benefits of any appreciation later tax-free.

Bonus cheat code: if you have a 401k through your employer AND the means to invest in a Roth IRA on the side – this is totally fair game!

You may want to start by thinking about what you’d like your finances to look like in 30 years.

That can help you consider your options and put together a plan. But whether it’s a 401k, a Roth

IRA, or even an investment account that is not specific to retirement, the most important thing is setting money aside.

A brief heads up: this is a sponsored video. MoneyLion and I have partnered with the goal of making important financial lessons easier to understand. See you on the next Beyond the Wallet.

Video Summary

Many people build their wealth through investing. Your money can grow over time in a retirement account and assist with your financial goals. Many retirement options exist, but most people hear about the 401(k) & Roth IRA accounts. We’ll cover both retirement accounts so you can make informed decisions around your retirement planning.

What is a 401(k) retirement account?

More than half of employers offer 401(k) retirement accounts to their employees. These accounts come with tax advantages and let you contribute with pre-tax dollars. You will pay less in taxes while growing your portfolio. 

Congress created this program in 1978 to encourage people to invest towards their retirement. It’s worked well, and some companies make it easy for employees to contribute. Businesses take a small percentage of an employee’s weekly paycheck and put it into the 401(k) account.

Some businesses also offer 401(k) matching. They will invest $1 for every dollar you put into your 401(k). Price matching is a risk-free way to double your money. Some people can’t take the money out for decades since it’s going into a retirement account, but you’ll have access to the funds when you reach the age of retirement.

What is a Roth IRA?

Not every business offers a 401(k) plan. You can set up a Roth IRA account to provide retirement perks as a backup. Roth IRAs let you make after-tax contributions. You won’t put as much money into your portfolio because taxes will sap away some of your contributions.

However, qualifying Roth IRA withdrawals are tax-free. Traditional 401(k) plans don’t have this perk since their contributions are pre-tax. Different tax treatments and rules apply to Roth IRA accounts. You’ll have to conduct further research on each plan to find the best account for your objectives.

Roth IRAs also have income limits. If you make too much money, you can’t contribute to a Roth IRA. You’ll need to make six figures to trigger this rule, which is a good problem to have. You can still open up a brokerage account and invest that way.

Planning for the future

Both 401(k) & Roth IRA retirement accounts help you plan for the future. Some people create a Roth account to complement their employers’ 401(k) accounts. These people get to invest into an additional retirement account after maxing out their 401(k) contributions. 

These accounts make retirement less stressful and provide a financial layer of protection. Every contribution adds up and enables you to hit your net worth objectives.

Nearly 80% of Americans have debt of some sort – but did you know not all debt is bad debt? [Hey Moneylion,] My name is Austin Hankwitz and I talk about personal finance and investing online. I grew up in a small town in northeast Tennessee and I had to learn about debt the hard way – let me teach you what I’ve learned.

MoneyLife Lesson:

So we all know what “debt” is – right? It’s owing money to someone else. It comes with an interest rate and sometimes origination fees, but something you might not know is that there is such thing as having “good debt.”

It’s a pretty simple takeaway – if, over the long term, the debt is helping you reach your financial goals it could be considered “good debt.”

Let me give you an example – doctors. We’ve all been to the doctor’s office at some point in our life, and we all know doctors make a lot of money. But, at some point, that doctor had to become a doctor, and that means medical school – which is not cheap. Going into debt for education that will further your professional career and increase your earning potential down the road could be “good debt,” because over the long term it could help you meet your financial goals.

Now let’s talk about how some people are doing debt wrong – or “bad debt.” This could mean “buying too much car” when shopping for a new vehicle, buying that brand new iPhone when your iPhone 11 works just fine, or just generally taking out high-interest debt on a credit card.

Debt you shouldn’t feel bad about? A mortgage, student loans, or a small business loan – considering all of these things, over the long term, could help you meet your financial goals.

Video Summary

Not all debt is bad debt. Nearly 80% of Americans have some type of debt, and it can feel challenging to keep up at times. This predicament results in people overlooking debts that can lead to positive outcomes. We’ll outline the differences between good debt vs. bad debt.

What is a good debt?

Taking on debt enables us to spend tomorrow’s money today. Instead of saving enough money for a big purchase, we can borrow money and pay it back later. Some debts nourish careers and lead to compelling investing opportunities.

Many doctors get paid well because of their in-demand skills. However, before doctors get high-paying salaries, they must first complete medical school. This education isn’t cheap and may put you in debt. However, at the end of the tunnel, you’ll have the skills to pursue a reliable and lucrative career. These student loans can lead to a profitable return on your investment over time.

A house is another example of good debt. You borrow money to buy an asset that appreciates over time. Some homeowners purchase multiple properties and convert them into rentals. They use debt to finance the properties and generate cash flow via tenants.

What is a bad debt?

Not every good debt pans out. Some homes decline in value, and you may decide against becoming a doctor after receiving your medical degree. Every investment carries a risk. Bad debts also have risks, but they present no financial upside. 

Buying the latest iPhone when your iPhone 11 works just fine is an example of bad debt. Your new iPhone’s value will decline over time, and it will provide minimal improvements over your current iPhone. Buying a luxury car and racking up credit card debt also represents bad debts. 

The interest payments will rise as you accumulate more debt. Each purchase makes it more challenging to become debt-free. Your principal expands, and you’re left with fewer dollars to pay it off. No opportunity for a return on investment provides zero upside in exchange for a substantial downside.

Spend smart

No one is perfect. Some people want to buy nice things for themselves from time to time. We shouldn’t deprive ourselves of enjoyable products and services. However, smart spending minimizes our bad debts. We can look for opportunities to save money and seek alternatives. 

Spending smartly gives us more money for good debts. When people invest in their education and portfolios, they stand a better chance of hitting their financial targets.