Life gets busy, and managing finances often takes a back seat until a late fee or missed payment reminds you to pay attention. But simplifying your financial life doesn’t have to be complicated. With the right strategies, you can reduce stress and stay on top of your money.

1. Automate your savings and bill payments

One of the simplest ways to reduce financial stress is automation. Set up automatic transfers to your savings account and schedule bill payments through your Sesame Cash pre-paid debit card, bank, or other service provider. This ensures your savings grow consistently and your bills are paid on time without the hassle of remembering due dates. The Consumer Financial Protection Bureau recommends automation as a key step in building better financial habits.

2. Avoid late fees with reminder tools

Missing payment deadlines can lead to costly late fees and a negative impact on your credit score. Use reminder tools like calendar apps or financial dashboards to get notifications about upcoming payments. Many tools, like the Credit Sesame all-in-one dashboard, also allow you to track due dates and set alerts, helping you stay organized and stress-free.

3. Consolidate your financial accounts

Managing multiple accounts at different banks or platforms can be overwhelming. Consolidating them under one provider or platform reduces complexity and makes it easier to track your finances. Look for tools that allow you to view your accounts, track spending, and monitor your credit score all in one place. This streamlining not only saves time but also improves financial clarity.

4. Use a budgeting tool

Budgeting apps and dashboards are invaluable for gaining control over your money. Many tools categorize spending automatically, helping you identify where your money goes and where you can cut back. According to a study from the National Foundation for Credit Counseling, budgeting is one of the most effective ways to improve financial health.

5. Keep track of your credit score

Understanding and monitoring your credit score is vital for simplifying your financial life. A good score can save you money on interest rates for loans and credit cards. Tools like free credit monitoring services inform you of any changes so that you can address issues proactively. Experts from the Federal Trade Commission recommend checking your credit report regularly for accuracy and signs of identity theft.

6. Declutter your financial paperwork

Physical and digital clutter can lead to missed payments or lost information. Set up a filing system for important documents, and switch to e-statements to reduce paper. Online dashboards can help you store and organize your financial information securely, giving you easy access whenever needed.

7. Set clear financial goals

Knowing what you’re working toward helps you prioritize your spending and savings. Whether buying a home, paying off debt, or building an emergency fund, breaking your goals into smaller, actionable steps makes them more achievable. Tools like financial dashboards can help you track your progress and stay motivated.

8. Consolidate insurance policies

If you have multiple insurance policies, consider bundling them under one provider. Many insurers offer discounts for combining home, auto, and life insurance policies. Using comparison tools like home insurance finders can simplify the process and help you find the best rates.

9. Embrace a minimalist financial mindset

Simplifying your financial life isn’t just about tools but also your mindset. Prioritize what matters most and cut out unnecessary expenses or services. A minimalist approach reduces stress and frees up money for the things that truly add value to your life.

Take the first step to simplify your financial life today

Simplifying your financial life can feel overwhelming, but starting small makes it manageable. Whether automating your savings or using a dashboard to consolidate your finances, every step brings you closer to financial clarity and peace of mind.

If you enjoyed 9 ways to simplify your financial life and reduce stress you may like,

• Take 10 steps to financial freedom on World Logic Day
• Personal finance vs. credit management
• Get your free daily credit score

Disclaimer: The article and information provided here are for informational purposes only and are not intended as a substitute for professional advice.

The post 9 ways to simplify your financial life and reduce stress appeared first on Credit Sesame.

Life insurance is a contract between you and an insurance company designed to provide financial protection for your beneficiaries in the event of your death. Policies come in various types with different features and costs. How good is your life insurance knowledge?

1. What is the primary purpose of life insurance?

A. Save money for retirement
B. Cover medical expenses
C. Provide financial protection for loved ones
D. Invest in the stock market

2. What is a beneficiary in a life insurance policy?

A. The person who pays the premiums
B. The insurance company
C. The person who receives the death benefit
D. The policyholder’s financial advisor

3. What is a term life insurance policy?

A. A policy that covers you for your entire life
B. A policy that covers you for a specific period
C. A policy that combines life insurance and investments
D. A policy with a guaranteed cash value

4. What is a whole life insurance policy?

A. A policy that covers you for a specific period
B. A policy that covers you for your entire life
C. A policy that only covers accidental death
D. A policy that covers critical illnesses

5. What is a rider in a life insurance policy?

A. An additional coverage option
B. The policyholder’s address
C. The amount of the death benefit
D. The premium payment schedule

6. What is the death benefit in a life insurance policy?

A. The amount paid to the policyholder while alive
B. The amount paid to the beneficiary upon the policyholder’s death
C. The cost of the life insurance policy
D. The policyholder’s age

7. What is a cash-value life insurance policy?

A. A policy that builds up a savings component
B. A policy that only covers accidental death
C. A policy with no cash value
D. A policy that covers a specific period

8. What are the primary factors affecting the cost of life insurance?

A. Age, health, and smoking habits
B. Marital status and number of children
C. Education level and income
D. Homeownership status and location

9. What is the purpose of a life insurance needs analysis?

A. Determining the right amount of coverage
B. Choosing the best insurance company
C. Selecting the appropriate policy type
D. All of the above

10. How might your credit score affect your life insurance?

A. Credit score has no impact on life insurance
B. A poor credit score can lead to higher premiums
C. A good credit score guarantees lower premiums
D. Only certain types of life insurance consider credit scores

Test your life insurance knowledge quiz ANSWERS

1. C–The primary purpose of life insurance is to provide financial protection for loved ones.
2. C–The beneficiary is the person who receives the death benefit.
3. B–A term life insurance policy covers you for a specific period.
4. B–A whole life insurance policy covers you for your entire life.
5. A–A rider is an additional coverage option.
6. B–The death benefit is the amount paid to the beneficiary upon the policyholder’s death.
7. A–A cash-value life insurance policy builds up a savings component.
8. A–Age, health, and smoking habits are well-established factors affecting insurance rates. Other factors may influence rates to a lesser extent.
9. D–A life insurance needs analysis helps determine the right amount of coverage, insurance company, and policy type.
10. B–A poor credit score can lead to higher premiums for some life insurance policies.

If you enjoyed Test your life insurance knowledge you may like,

• Insurance Credit Score: What is it and how is it used?
• Get your free credit score
• Test your mortgage knowledge

Disclaimer: The article and information provided here are for informational purposes only and are not intended as a substitute for professional advice.

The post Test your life insurance knowledge appeared first on Credit Sesame.

The term “leverage” simply means using something you have to get the result you want. In this case, what you have is excellent credit. And you can use it to:

• Save money on loans and insurance.
• Make investments.
• Earn cash, travel or merchandise for free.

The old saying, “It takes money to make money” is only partly true. You can achieve top-drawer credit without a high income, and you can use your excellent credit score to improve your finances every day.

How to leverage your credit

You can leverage your credit to save on insurance, pay less interest, make investments and earn freebies. Here’s how.

Save on insurance

In all but eight states, insurers can consider your credit score when setting insurance rates. If you have an excellent credit score and haven’t burned down your house or caused any highway pileups, you probably qualify for great rates.

Leveraging your credit score means shopping your insurance in these circumstances:

• Every other year (to avoid “rate creep”).
• If your renewal rate increases by 10% or more.
• When you have a life change like marriage, divorce, or kids moving out.
• Three years after a moving violation or accident.
• When your credit rating changes significantly.

Check with several companies or use an online shopping site to help compare rates and programs. And compare rates for every type of insurance you have — bundling can seem like a great idea, but it does not always save you money.

Pay less interest

It’s no secret that people with better credit pay lower interest rates. According to the Consumer Financial Protection Bureau (CFPB), the average credit card rates for people with the best credit run at least eight percentage points lower than those for people with poor credit.

You can use your good credit to save on other loans as well. Personal loan interest rates for consumers with the highest credit scores are competitive with home equity loan rates — without putting up your home as collateral. A quick online search finds example rates of just under 6% for the most desirable applicants, while those for borrowers with poor-to-fair credit run as high as 36%. At these rates, for a $10,000 five-year personal loan the prime borrower would pay interest of $1,600 while the subprime borrower would pay $11,680.

If you have a large auto loan or mortgage, it never hurts to shop for a lower refinance rate. People with less-than-excellent credit are unlikely to qualify for the lowest advertised interest rates. However, you can be reasonably confident that those deals are available to you.

Make investments

Even if you can afford to pay for purchases in cash, taking advantage of low- to no-interest promotions allows you to leave money in your bank or brokerage — where it continues to grow.

If you invest in home improvements, a business or other opportunities, the cost of money impacts your return on investment (ROI). Adding a $25,000 garage to your home might increase your property value by $35,000, but pulling money out of an investment account earning 10% per year or borrowing at a 10% annual rate offsets some or all of that gain. When you can take advantage of a zero-interest deal for a year or two, you can leave a few thousand dollars in your account.

Another way to leverage your credit is to set up a home equity line of credit (HELOC) for emergencies. Having access to emergency cash at a rock-bottom interest rate allows you to tie up your money in better-paying investments instead of savings or checking accounts. Read the fine print, however. Some HELOCs penalize you with fees if you never use them or if you close them out too early.

When evaluating investments, understand the risk involved as well as the potential return. Make sure that you’re comfortable with the downside because if an investment goes south, you’ll still need to repay the loan behind it.

Earn freebies

You can leverage your credit by taking advantage of offers that may be available only to those with stellar scores:

• Rewards cards.
• Cash-back cards.
• Signing bonuses.
• Zero-interest credit cards.

Rewards and cash-back credit cards are free money as long as you don’t carry a balance and the annual fee is low or zero. As long as you use them only for items that you would buy anyway, you can take advantage of credit cards’ safety, convenience and rewards at no cost. And when credit card issuers compete for customers with excellent credit, you may snag compelling incentives — like hundreds of dollars in cash, big discounts from retailers, or tens of thousands in air miles for signing up and spending a certain amount in the first few months.

Leverage your credit but beware of pitfalls

When your credit score hits the excellent range, you may receive offers every day — in your mailbox, online and when you shop. It can be tempting to say yes to all of them, especially when the credit card has no annual fee and includes a tempting bonus.

However, you should choose carefully and be mindful when paying with credit. Applying for a new account, even if it’s pre-approved, generates an inquiry on your credit report and drops your credit score a few points. And opening new accounts decreases the average age of your accounts. New credit (inquiries) impacts 10% of your credit score and lowering the age of your accounts affects 15%.

Another issue is being incentivized to use credit when you otherwise would not. Those generous signing bonuses don’t usually kick in unless you add a few thousand dollars to the account within three months or so. If that is more than you spend and can comfortably pay off, that offer might not be for you.

When you learn to leverage your credit, you can improve your bottom line and add a little fun to your life. Just make sure you’re disciplined enough to borrow and spend wisely, so you don’t lose the great score you worked so hard to achieve.

You may also be interested in:

• Maintaining Good Credit has Become a High Stakes Game
• Credit Card Pre-Approval Gives You Better Odds of Approval but Should You Sign Up?

Disclaimer: The article and information provided here is for informational purposes only and is not intended as a substitute for professional advice.

The post Leverage Your Credit: What it Means and How to Do it appeared first on Credit Sesame.

Life insurance is a way of ensuring that the people who depend on you are provided for financially should you die unexpectedly. 

Deciding what type of insurance to get can be challenging. Your choice affects the cost and benefits of your life insurance. The difference between term and whole insurance is primarily how long the policy lasts. However, there are also differences in policies provided.

How Does Life Insurance Work?

Basically, life insurance consists of two components:

• Premium. The amount you pay, typically monthly, for the policy
• Death benefit. The amount the policy pays if you die

When your policy is set up, you choose who receives the death benefit. This person is known as the beneficiary. You can have multiple beneficiaries on a life insurance policy, and in most cases, you can change your beneficiaries later.

The point of a life insurance policy is to protect against the unexpected. As an example, take a healthy 25-year-old who is the primary breadwinner for her family. 

A young healthy person is not expected to die any time soon. However, if the unexpected happens and she dies prematurely, her beneficiary would receive a death benefit worth many times what she paid into the policy.

This way, her loved ones could be covered financially for the unexpected loss of her ability to provide for them. That’s the point of having life insurance. You hope your beneficiaries won’t need it, but you want to make sure it’s there if they do. 

The big question then becomes one of how long you need to provide that protection. This is where the choice between term and whole life insurance comes in.

What Is Term Insurance?

The word “term” refers to a specific amount of time. Term life insurance policies are designed to be in effect only for a set period of time, such as 10 or 20 years. 

If you die during that term and you’ve kept up with your premium payments, the policy pays a death benefit. If the term expires before you die, the policy does not pay a benefit.

The premiums are relatively inexpensive.

What Is Whole Life Insurance?

Whole life insurance is as a permanent life insurance policy. It is the simplest and most common type of permanent life insurance. 

Permanent life insurance policy is not limited to a specific term. It stays in effect for as long as you continue to pay the premiums.

Another characteristic of permanent life insurance is that it may have a savings component. Under the terms of the policy, policyholders may received a dividend periodically.

Other forms of permanent life insurance have a variety of premium structures, savings components and death benefit arrangements. However, the two main characteristics shared by most permanent life insurance policies are

• Remaining in effect for as long as the premiums are paid.
• Having a savings component in addition to a death benefit.

These components of whole life insurance policies add to the cost of the policies. 

Term vs Whole Life Insurance

For younger adults in particular, the most prominent difference between term and whole life insurance is that term insurance is cheaper. However, since term insurance only lasts for a limited amount of time, you are faced with a decision of what to do once the term expires. 

You can try to get a new term insurance policy at that point. However, you are older and may have acquired health problems. Premiums are almost certain to be more expensive, and you may not even qualify for life insurance. 

Because of that, if you want to make sure you’re insured beyond the length of a term life insurance policy, whole life offers a longer-term solution.

A whole life policy may also pay dividends that allow you to build savings all the time. However, there is no guarantee that the value of those savings will exceed what you could earn by getting a cheaper term policy and investing the money yourself. 

The following table summarizes how term and whole life insurance address different needs:

Deciding What Type of Insurance Is Right for You

Both term and whole life insurance have their pros and cons, so the choice depends on your situation. Here are some considerations:

• If money is tight, term insurance might be the only way you could afford a policy that would provide a sufficient benefit.
• If you’re saving money rapidly and plan to retire within 10 to 20 years, term insurance might be the most cost-effective way of filling the gap until you’ve saved sufficient resources for your family to live on.
• If you’re fairly young but have sufficient income to afford whole life insurance, it might be the best option for providing insurance over a long time horizon.
• If you have very young children or long-term dependents, a whole life policy might be the best way of making sure they’re provided for even if it’s many years before you die.

Whichever type of life insurance you decide on, it’s very important to shop around for the best price. It’s a very competitive market with lots of different options, so be sure to compare prices and coverage details carefully before choosing.

You may also be interested in:

• Which States Help Consumers with Medical Debt?
• Rising Inflation and Healthcare: The Harsh Consequences

Disclaimer: The article and information provided here is for informational purposes only and is not intended as a substitute for professional advice.

The post What Is the Difference Between Term and Whole Life Insurance? appeared first on Credit Sesame.

Although gas is a big expense on a monthly basis, driving from gas station to gas station looking for the cheapest gas is probably one of the worst ways to save money.

Time and gas is wasted, and you are unlikely to save more than a buck or two. If your car has a 10-gallon gas tank and you find a station where a gallon of gas is 10 cents cheaper than at another station, then you save only $1 when filling up.

A better solution is to find a station near your home that consistently has low prices, and make it your main spot for filling up. Prices fluctuate at gas stations often, so the price you pay at your neighborhood station may be higher from time to time compared to other stations, but overall you should see lower prices and at worst you’ll pay $1 more.

However, if you are shopping for single big expense items, your efforts may be better rewarded by comparison shopping. Here are a few big expense items that deserve a bit of extra effort to save money, especially during self-improvement September.

Comparison shopping for beds

The average price for a Queen bed is $600 for a budget bed made of basic materials, $1,000 for mid-range bed using quality materials, and $1,800 for a luxury bed of high-end materials, according to the Sleep Foundation.

The markups on mattresses can be huge, which means there is an opportunity for savvy shoppers to find cost savings by comparison shopping. A Consumer Reports investigation found that local mattress stores sell at markups of up to 900%. This means that a mattress costing about $300 to make sells for $3,000.

An easy way to comparison shop is to go to a mattress store and try out a few beds. Chances are you can find one that’s comfortable and fits your budget. Paying more for a high quality bed can be worthwhile. It may give you a better night’s sleep, and may last longer than a basic bed.

But huge price differences can be found among mattress sellers, for a variety of reasons. Hundreds of companies are competing for your business, so comparing prices among brands can help you find a great deal.

Holiday sales on beds happen throughout the year. President’s Day, Memorial Day, Independence Day, and Labor Day are common sales periods every year. Buying a mattress online can also save you money, since online retailers have lower overhead costs and can sell at smaller margins.

Comparison shopping for loans

Shopping for a home, car or personal loan requires getting quotes from at least three lenders. It’s not as much work as you might think, and can often be done online in a few minutes. A mortgage loan takes some work, but you can save more because a home loan is often large and lasts for decades.

It’s tempting to take the first loan offer you receive. After all, if your credit score and other financial information is the same for each lender, then won’t loan offers be similar? Not always.

Some lenders have low overhead costs, such as online lenders where applicants fill out an online form for before getting a loan estimate. Some lenders also charge an extra $1,000 in broker fees to originate a mortgage, according to a 2018 study by Freddie Mac.

For a typical $250,000 home loan, the average expected savings from one additional quote is $1,435 over the life of the loan, the study found. Borrowers saved more as they shopped for more quotes, with five rate quotes pushing the average savings to $2,914. The biggest savings happened during challenging economic times.

An interest rate is the most obvious variable to shop for. Terms and fees should also be compared, including buying mortgage points that you pay upfront to buy down the loan’s interest rate. Some lenders structure their points differently, so you may be able to save by shopping around for points. Shopping with a variety of lenders such as big banks, credit unions, online lenders and regional banks may also help you save.

Comparison shopping for insurance

Insurance is one of those boring but often mandatory purchases that can make you want to renew automatically without going through the hassle of shopping around.

One survey on auto insurance found that 26% of Americans have never compared multiple insurance quotes. Of those who do, 66% said it takes 30 minutes to two hours to compare rates, and 73% said they saved money while shopping around. Most people saved $100 to $499.

Car and home insurance quotes can require a fair amount of information so that you’re comparing apples to apples. Coverage limits in different categories are where you can save the most, with some carriers offering much cheaper prices for less coverage in some areas. A high deductible also helps. Drivers with a few traffic tickets or accidents can expect to pay more, as can homeowners who have filed a few claims recently.

Combining home and auto insurance policies with one insurer can get you a bundling discount of 5% to 20% or more, according to U.S. News. Get at least three price quotes to get the most savings, and ask for rate quotes with and without the bundling discount.

Comparison shopping for credit cards

Whether it’s your first card or you have a long and strong credit history, shopping for the best  credit card interest rate can save you a lot of cash.

A high credit score is likely to get you the best rate. Raising your credit score can be enough to ask your credit card provider for a lower interest rate, so start by paying your bills on time to get the biggest credit score jump.

Consolidating credit card debt with a zero-interest, introductory rate balance transfer card can save you a lot of money if you have high debt and can pay the balance off when the intro period ends, usually in about a year.

The average credit card interest rate is 19.86% for new offers and 15.13% for existing accounts, according to one report. 

For a credit card balance of $5,000, a 19.86% rate and a minimum payment of interest plus 1% of the balance, which equals a minimum payment of $132.75 in this case, it would take five years to pay off the balance. The total interest is $2,896.

Drop the interest rate to 15.13% and under the same scenario the minimum monthly payment is $113.04, and it would take five years and six months to pay off the balance. But the total interest drops to $2,359, a savings of $537.

Why it’s worth shopping around

Clipping coupons and driving around looking for better gas prices may save you some money, but bigger expenses are likely to get the most reward from shopping around and comparing prices. Some things are negotiable, such as a bed, while home insurance and car loans may have less wriggle room. 

At the very least, it’s worth spending 30 minutes or so every year when your insurance is up for renewal, or when you’re thinking of buying a new car, to call a few insurers or check online to see if your rates can drop. It might be so easy and save you so much money that you’ll turn it into a lifelong habit.

Consumers who enjoyed comparison shopping for big expense items may also be interested in:

• How to Ask for a Lower Interest Rate on Your Credit Card
• Save Money With These 3 Holiday Shopping Hacks
• A New Credit Card Can Make it Harder to Get a Mortgage

Disclaimer: The article and information provided here is for informational purposes only and is not intended as a substitute for professional advice.

The post Comparison Shopping for Big Expense Items During Self-Improvement September appeared first on Credit Sesame.