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Investing apps have made it possible to start investing with any amount of money — including $1. The challenge is choosing the right app for your goals. Here are the best investing apps for 2026.

Best Investing Apps at a Glance

App	Best For	Minimum	Commission
Fidelity	Best overall / beginners	$0	$0
Charles Schwab	Full-service brokerage	$0	$0
Robinhood	Simplest interface	$0	$0
Public	Social investing / bonds	$0	$0
Acorns	Micro-investing / spare change	$0	$3/month
M1 Finance	Automated portfolio investing	$100	$0

Fidelity — Best Overall Investing App

Fidelity is the best all-around investing app for most people. It has no account minimums, no trading commissions on stocks and ETFs, fractional shares starting at $1, and some of the lowest-cost index funds available (the Fidelity ZERO funds have 0% expense ratios). Fidelity also offers strong research tools and educational content for beginners. It is the top recommendation for long-term investors building wealth.

Charles Schwab — Best for Full-Service Investors

Schwab offers everything Fidelity does with slightly different account types and research tools. It has an excellent thinkorswim trading platform (acquired from TD Ameritrade) for active traders, plus a clean mobile app for casual investors. Schwab’s customer service is also consistently rated highly. It is a strong alternative to Fidelity with no meaningful disadvantages.

Robinhood — Best Simple Interface

Robinhood made investing accessible by stripping away complexity. The app is clean and fast. It supports stocks, ETFs, options, crypto, and retirement accounts (Roth IRA, traditional IRA). Robinhood Gold ($5/month) adds 4.9% interest on uninvested cash and margin access. The main trade-off is fewer research tools than Fidelity or Schwab.

Acorns — Best for Micro-Investing

Acorns rounds up your card purchases to the nearest dollar and invests the spare change. It charges $3/month for individual accounts. The round-up feature is useful for people who struggle to invest consistently. Once you have enough saved to invest a lump sum regularly, switching to Fidelity or Schwab will reduce your fee percentage significantly.

M1 Finance — Best for Automated Portfolio Investing

M1 Finance lets you build a custom portfolio (called a “pie”) from stocks and ETFs, then automates all future contributions to maintain your target allocation. There are no trading commissions. The minimum account is $100. M1 is ideal for investors who want a set-and-forget approach with more control than a robo-advisor but less manual management than a standard brokerage.

How to Choose an Investing App

• If you are a beginner: Start with Fidelity or Schwab. Both have strong education resources and no minimums.
• If you want simplicity: Robinhood’s interface is the cleanest — it removes friction to get started.
• If you struggle to save: Acorns automates micro-investments. The $3/month fee is a high percentage on small balances, but the habit it builds is valuable.
• If you want automation: M1 Finance gives you custom portfolio automation with no fees.

Bottom Line

Fidelity is the best investing app for most people — no minimums, lowest-cost index funds, and strong research. For complete beginners who want the simplest start, Robinhood removes all barriers. Acorns is useful for building the savings habit. Whatever you choose, the most important thing is to start investing, even with a small amount.

Frequently Asked Questions

What is the best investing app for beginners?

Fidelity and Charles Schwab are the best all-around apps for beginners — no account minimums, no trading commissions, and strong educational resources. Robinhood is simpler but has fewer research tools.

Is Robinhood safe for beginners?

Robinhood is SIPC-insured up to $500,000 and regulated by FINRA. Your investments are protected. However, it offers fewer research tools than Fidelity or Schwab, and its options interface is designed to encourage trading — which is not ideal for long-term investors.

What app is best for long-term investing?

Fidelity is best for long-term, buy-and-hold investors. It has no minimums, offers fractional shares, provides strong research, and its index fund costs are among the lowest available.

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Index funds are the most reliable way most people can build wealth over time. They are low-cost, diversified, and require very little management. Here is how to start investing in index funds in 2026, even if you have never invested before.

What Is an Index Fund?

An index fund is a type of investment fund that tracks a market index — like the S&P 500, the total U.S. stock market, or the bond market. Instead of a manager picking individual stocks, the fund simply buys all (or most) of the stocks in the index.

The result is broad diversification at a very low cost. Because there is no active management, fees are minimal.

Why Index Funds Are So Powerful

• Low cost: The average actively managed fund charges 0.5–1% per year in fees. Index funds often charge 0.03–0.1%. On a $100,000 portfolio, that difference is $500–$970 per year — compounded over decades, it is enormous.
• Diversification: A single S&P 500 index fund owns shares in 500 companies across every major sector. One bad company does not sink your portfolio.
• Better returns: Over 15-year periods, more than 90% of actively managed funds underperform their benchmark index after fees. Index funds consistently beat most active managers over the long term.

Step 1: Choose Where to Open an Account

To buy index funds, you need a brokerage account. The best brokers for beginners are:

• Fidelity: No minimums, fractional shares, offers ZERO-fee index funds
• Charles Schwab: No minimums, excellent customer service
• Vanguard: The original home of index investing — best for long-term buy-and-hold investors

Step 2: Decide Which Account Type

• Roth IRA: Best for most people under 50 who expect to be in a higher tax bracket later. Contributions are after-tax; withdrawals in retirement are tax-free.
• Traditional IRA: Best if you want a tax deduction now. You pay taxes on withdrawals in retirement.
• 401(k): If your employer offers one with a match, contribute at least enough to capture the full match first.
• Taxable brokerage account: No contribution limits. Use this after maxing retirement accounts.

Step 3: Pick Your Index Funds

You do not need more than two or three funds to build a well-diversified portfolio. Here are the most recommended starting points:

• Fidelity ZERO Total Market Index (FZROX): Total U.S. stock market, 0% expense ratio
• Vanguard Total Stock Market ETF (VTI): Total U.S. market, 0.03% expense ratio
• Vanguard S&P 500 ETF (VOO): 500 largest U.S. companies, 0.03% expense ratio
• Vanguard Total International Stock ETF (VXUS): International diversification, 0.07% expense ratio
• Vanguard Total Bond Market ETF (BND): U.S. bond market, 0.03% expense ratio

Step 4: Set a Contribution Schedule

The most powerful thing you can do is invest consistently. Set up automatic monthly contributions — even $50 or $100 per month — and let compound interest work. This approach is called dollar-cost averaging: you buy more shares when prices are low and fewer when prices are high, smoothing out market volatility over time.

Step 5: Do Not Panic When the Market Drops

The stock market drops 10% or more in about one out of every three years. This is normal. Index fund investors who stay invested through downturns consistently outperform those who sell and try to time the market. The key is to invest in amounts you can afford to leave alone for at least five years.

Bottom Line

Open a Roth IRA at Fidelity or Vanguard, buy a total market index fund, and set up automatic monthly contributions. That is the entire strategy. Simple, low-cost, and historically effective over any 20-year period in U.S. stock market history.

Frequently Asked Questions

How much money do you need to start investing in index funds?

You can start with as little as $1 with brokers that offer fractional shares, like Fidelity and Schwab. Many index funds have no minimum investment. The Fidelity ZERO funds, for example, require $0 to start.

Are index funds safe?

Index funds carry the same market risk as the stocks they hold. Their value goes up and down with the market. But because they are diversified across hundreds or thousands of companies, a single company’s failure does not significantly impact your investment.

What is the best index fund for beginners?

The Fidelity ZERO Total Market Index Fund (FZROX) and Vanguard Total Stock Market ETF (VTI) are the top starting points. Both offer total market exposure at near-zero cost.

Advertiser Disclosure: AskMyFinance.com may earn a commission from affiliate partners when you click on links or apply for financial products on this site. Our editorial opinions are our own and not influenced by advertiser relationships.

The Roth IRA and the 401(k) are two of the most powerful retirement accounts available. Most people should use both — but the order matters. Here is how to decide which to fund first.

Key Differences: Roth IRA vs. 401(k)

Feature	Roth IRA	401(k)
2026 contribution limit	$7,000 ($8,000 if 50+)	$23,500 ($31,000 if 50+)
Tax treatment	After-tax contributions; tax-free withdrawals	Pre-tax contributions; taxed on withdrawal
Employer match	No	Yes (if employer offers)
Income limits	Yes (phases out at higher incomes)	No
Investment choices	You choose (stocks, ETFs, funds)	Limited to plan options
Required minimum distributions	None during your lifetime	Yes, starting at age 73
Early withdrawal of contributions	Anytime, penalty-free	Subject to 10% penalty before 59.5

The Recommended Order: Where to Save First

Follow this priority order for most situations:

Step 1: Contribute to Your 401(k) Up to the Employer Match

If your employer matches contributions, this is a 50%–100% instant return on your money. It is the best guaranteed return available anywhere. Contribute at least enough to capture the full match before doing anything else.

Example: Your employer matches 50% of contributions up to 6% of your salary. You earn $60,000. Contributing $3,600 (6%) triggers a $1,800 match — that is $1,800 of free money. Never leave this on the table.

Step 2: Max Out a Roth IRA

After capturing the full 401(k) match, put money into a Roth IRA up to the annual limit ($7,000 in 2026). The Roth IRA’s advantages are powerful:

• Tax-free growth and withdrawals in retirement
• No required minimum distributions — you never have to take money out
• Contributions (not earnings) can be withdrawn at any time without penalty — it doubles as an emergency fund backup
• More investment choices than most 401(k) plans

Step 3: Go Back and Max Out the 401(k)

After maxing the Roth IRA, return to your 401(k) and contribute up to the $23,500 limit. Even if the investment options are limited, the tax-deferred growth is valuable over decades.

Step 4: Taxable Brokerage Account

After maxing both retirement accounts, invest additional savings in a taxable brokerage account. There are no contribution limits, and you can access funds without penalty at any time.

When a Traditional 401(k) Beats a Roth IRA

The Roth IRA is the better choice for most workers in their 20s and 30s who expect to be in a higher tax bracket in retirement. But the traditional 401(k) wins if:

• You are in a high tax bracket now and expect to be in a lower one in retirement
• You earn too much to contribute to a Roth IRA directly (above $165,000 single / $246,000 married)
• You need the tax deduction now to reduce your current-year tax bill

Bottom Line

The smart order is: capture the full 401(k) employer match, then max a Roth IRA, then go back and max the 401(k). This approach captures free money, maximizes tax-free growth, and builds long-term flexibility. Most people can and should use both accounts every year.

Frequently Asked Questions

Can you contribute to both a Roth IRA and a 401(k) in the same year?

Yes. You can contribute to both in the same year as long as you meet the income limits for the Roth IRA. Contributing to a 401(k) does not affect your Roth IRA eligibility.

What is the income limit for a Roth IRA in 2026?

For 2026, single filers can contribute the full amount if their income is under $150,000. The contribution phases out between $150,000 and $165,000. Married filing jointly: full contribution under $236,000, phases out up to $246,000.

What happens to my 401(k) if I leave my job?

You can leave it with your former employer, roll it into your new employer’s 401(k), roll it into a traditional IRA, or cash it out (cashing out triggers taxes and a 10% penalty if under 59.5). Rolling into an IRA gives you the most flexibility.

Advertiser Disclosure: AskMyFinance.com may earn a commission from affiliate partners when you click on links or apply for financial products on this site. Our editorial opinions are our own and not influenced by advertiser relationships.

State Farm and Geico are the two largest car insurance companies in the United States. Both offer solid coverage, but they serve different types of drivers well. This comparison breaks down pricing, coverage, discounts, and service so you can choose the right one.

Quick Comparison: State Farm vs. Geico

Feature	State Farm	Geico
Average annual premium	~$1,480	~$1,320
J.D. Power satisfaction (2025)	847 / 1,000	829 / 1,000
AM Best rating	A++ (Superior)	A++ (Superior)
Local agents	Yes — 19,000+ agents	Limited
Mobile app rating	4.8 / 5	4.8 / 5

Pricing: Who Is Cheaper?

Geico is usually the cheaper option for drivers with a clean record. Its average full-coverage premium runs about $110 per month, compared to about $123 for State Farm. But pricing depends heavily on your ZIP code, age, driving history, and vehicle.

State Farm is often more competitive when:

• You have a teen driver on the policy
• You have a recent accident or ticket
• You bundle home and auto

Coverage Options

Both companies offer all standard coverage types:

• Liability (bodily injury and property damage)
• Collision and comprehensive
• Uninsured and underinsured motorist
• Medical payments (MedPay) and personal injury protection (PIP)
• Rental car reimbursement
• Roadside assistance

State Farm also offers rideshare coverage for Uber and Lyft drivers, which Geico offers in fewer states.

Discounts

State Farm discounts include:

• Multi-policy (bundle home + auto)
• Drive Safe and Save (telematics program)
• Good student (under 25, 3.0 GPA or higher)
• Accident-free discount
• Defensive driving course

Geico discounts include:

• Multi-policy and multi-vehicle
• Good driver (5 years accident-free)
• Federal employee and military
• Good student
• Membership and employee discounts (partner with 500+ groups)

Customer Service and Claims

State Farm scores higher in J.D. Power’s overall satisfaction study. Its large network of local agents means you can often meet your agent in person, which many customers prefer when filing a claim.

Geico is almost entirely digital. It handles claims well through its app and online portal, and has a strong reputation for quick claims processing. If you prefer to handle everything online without talking to an agent, Geico may suit you better.

Which Should You Choose?

• Choose Geico if you want the lowest base premium and prefer a digital-first experience.
• Choose State Farm if you want a local agent, have a teen on your policy, or want the highest customer satisfaction scores.

Bottom Line

Both State Farm and Geico are excellent insurers with top financial strength ratings. The best way to choose is to get quotes from both — prices vary significantly by location and driver profile. Spend 10 minutes getting quotes from each before you decide.

Frequently Asked Questions

Is State Farm or Geico cheaper?

Geico is often cheaper for drivers with clean records. State Farm can be more competitive for drivers with accidents or teens on the policy.

Which company has better customer service?

State Farm has higher J.D. Power satisfaction scores and a large local agent network. Geico is rated well for its digital tools and claims app.

Can I get a quote from both on the same day?

Yes. Both State Farm and Geico offer instant online quotes. Getting both on the same day is the fastest way to compare real prices for your ZIP code.

Advertiser Disclosure: AskMyFinance.com may earn a commission from affiliate partners when you click on links or apply for financial products on this site. Our editorial opinions are our own and not influenced by advertiser relationships.

Car insurance for seniors does not have to be expensive. Many insurers offer strong discounts for older drivers, especially those with clean records and low annual mileage. Here are the best car insurance companies for seniors in 2026.

Best Car Insurance Companies for Seniors

1. The Hartford (AARP Program) — Best Overall for Seniors

The Hartford partners with AARP to offer auto insurance designed specifically for drivers 50 and older. Key benefits include:

• Accident forgiveness — your rate does not increase after your first accident
• Lifetime renewability — they cannot drop you for old age alone
• New car replacement for vehicles less than 15 months old
• RecoverCare benefit for household expenses if you are injured in an accident

AARP members get exclusive pricing. If you are 50 or older, this is the first quote to get.

2. USAA — Best for Military Seniors

USAA consistently earns top customer satisfaction scores and offers very competitive rates for veterans and military families. If you or a spouse served in the military, USAA should be your first call. It is available to active duty, veterans, and their families.

3. Geico — Best Rates for Seniors with Clean Records

Geico offers low base rates and a mature driver discount of up to 10% for drivers who complete an approved defensive driving course. Its digital claims process is straightforward for seniors who prefer to handle things online.

4. Nationwide — Best for Low-Mileage Seniors

Nationwide’s SmartMiles program is a pay-per-mile option ideal for seniors who drive fewer than 7,500 miles per year. You pay a base rate plus a per-mile charge. If you drive significantly less than the average American (about 14,000 miles per year), this can cut your premium in half.

5. State Farm — Best for Seniors Who Want a Local Agent

State Farm has 19,000+ local agents nationwide. For seniors who prefer face-to-face service, State Farm’s agent network is unmatched. Its Drive Safe and Save program also rewards low-mileage driving with discounts of up to 30%.

Senior Car Insurance Discounts to Ask About

• Mature driver discount: Most major insurers offer 5–15% off after you complete a defensive driving course (AARP, AAA, and online courses qualify).
• Low-mileage discount: If you drive under 7,500 miles per year, ask about pay-per-mile or low-mileage discounts.
• Multi-policy discount: Bundling home and auto with the same insurer typically saves 5–15%.
• Loyalty discount: Many insurers reward long-term customers who have been with them for multiple years.

What Coverage Do Seniors Need?

As a senior, your coverage needs depend on a few factors:

• If you own your vehicle outright, you may not need collision and comprehensive coverage if the car’s value is low.
• If you drive infrequently, a pay-per-mile policy can reduce costs significantly.
• Make sure you have adequate liability coverage — minimum state limits are often not enough if you cause a serious accident.
• MedPay or PIP coverage is valuable if your health insurance has high deductibles.

Bottom Line

The best car insurance for seniors depends on your driving habits, military status, and preference for digital vs. local service. Get quotes from at least three companies — The Hartford (AARP), Geico, and State Farm — to find the best rate for your profile.

Frequently Asked Questions

Does car insurance go up after age 65?

Rates start to rise gradually around age 70 for most drivers. The increase depends on your driving record and the insurer. Maintaining a clean record and taking a defensive driving course can offset higher rates.

What discounts are available for senior drivers?

The most common are the mature driver discount (after taking a certified course), low-mileage discount, and bundling discount. AARP members can also access special rates through The Hartford.

Is AARP car insurance worth it?

The Hartford’s AARP Auto Insurance program offers competitive rates and benefits designed for drivers 50+, including a lifetime renewability guarantee and accident forgiveness. It is worth comparing against standard quotes.

Advertiser Disclosure: AskMyFinance.com may earn a commission from affiliate partners when you click on links or apply for financial products on this site. Our editorial opinions are our own and not influenced by advertiser relationships.

Having bad credit can raise your car insurance premium significantly — but some insurers penalize poor credit less than others. Here are the best options if your credit score is below 580.

How Credit Affects Car Insurance Rates

In most states, car insurance companies use a credit-based insurance score to help set your premium. Studies show that drivers with lower credit scores file more claims on average. As a result, insurers charge more to offset that risk.

The impact is significant. Drivers with poor credit pay an average of 61% more than drivers with good credit. That is roughly $700 more per year on a $1,150 average premium.

States that ban credit scoring: California, Hawaii, Massachusetts, and Michigan do not allow insurers to use credit scores. If you live in one of these states, your credit will not affect your premium.

Best Car Insurance Companies for Bad Credit

1. Geico — Lowest Average Rates for Poor Credit

Geico charges less than most competitors for drivers with poor credit. While rates still go up with bad credit, the baseline is lower than average. Geico’s large scale allows it to spread risk across a wide pool of drivers.

2. State Farm — Smallest Credit Penalty

State Farm applies one of the smallest credit-based surcharges in the industry. The difference in premium between a driver with excellent credit and poor credit is smaller at State Farm than at most other major insurers.

3. Progressive — Best for High-Risk Drivers Overall

Progressive specializes in nonstandard and high-risk drivers. It accepts drivers with poor credit, recent accidents, and DUIs that other companies reject. Its Snapshot telematics program also lets safe drivers earn discounts that can partially offset the credit penalty.

4. USAA — Best for Military Families with Bad Credit

USAA also applies a relatively small credit surcharge and offers some of the lowest base rates available. If you are eligible, it is the best option regardless of credit.

How to Lower Your Premium with Bad Credit

• Shop at least three quotes. Credit penalties vary widely by insurer — shopping around can save hundreds per year.
• Raise your deductible. A higher deductible lowers your premium. Make sure you can cover the deductible in cash if you need to file a claim.
• Drop comprehensive and collision on older vehicles. If your car is worth less than $4,000–$5,000, these coverages may not be worth the premium.
• Ask about telematics programs. Programs like Progressive Snapshot or State Farm Drive Safe and Save reward safe driving habits regardless of credit.
• Work on your credit. As your score improves, ask your insurer to re-run your credit at renewal. The savings can be significant.

Bottom Line

Bad credit raises your car insurance premium, but the penalty varies significantly by insurer. Geico and State Farm tend to offer the most competitive rates for drivers with poor credit. Always compare at least three quotes and consider telematics programs to offset the credit surcharge.

Frequently Asked Questions

Can insurers use your credit score to set rates?

In most states, yes. Insurers use a credit-based insurance score (different from your FICO score) to predict claim likelihood. California, Hawaii, and Massachusetts ban this practice.

How much more does bad credit cost for car insurance?

Drivers with poor credit pay an average of 61% more for car insurance than drivers with good credit, according to industry data. That can add $500 to $1,500 per year to your premium.

Will improving my credit lower my insurance rate?

Yes. As your credit improves, ask your insurer to re-run your credit score for a new rate. Some insurers do this automatically at renewal.

Advertiser Disclosure: AskMyFinance.com may earn a commission from affiliate partners when you click on links or apply for financial products on this site. Our editorial opinions are our own and not influenced by advertiser relationships.

The American Express Gold Card and the Chase Sapphire Preferred are two of the most popular mid-tier travel rewards cards. Both carry a roughly $95–$325 annual fee and earn strong points. But they reward different spending patterns. Here is how to pick the right one.

Quick Comparison

Feature	Amex Gold	Chase Sapphire Preferred
Annual fee	$325	$95
Dining rewards	4x at restaurants worldwide	3x at restaurants
Grocery rewards	4x at U.S. supermarkets (up to $25k/yr)	None
Travel rewards	3x on flights booked direct	3x on travel, 5x on Chase Travel portal
Annual credits	$120 dining + $120 Uber Cash	$50 hotel credit
Transfer partners	21 airlines and hotels	14 airlines and hotels
Travel insurance	Limited	Strong (trip cancellation, delay, baggage)

Amex Gold Card: Best for Dining and Groceries

The Amex Gold earns 4x points at restaurants worldwide and at U.S. supermarkets (up to $25,000 in grocery purchases per year). If you spend $500 or more per month on dining and groceries combined, the Gold earns more than the Sapphire Preferred in those categories.

The card also includes $120 in annual dining credits (at select partners like Grubhub and Cheesecake Factory) and $120 in Uber Cash, adding up to $240 in credits that partially offset the $325 annual fee.

Best for: People who spend heavily on dining and groceries and want to maximize everyday rewards.

Chase Sapphire Preferred: Best for Travel and Flexibility

The Chase Sapphire Preferred earns 3x on dining and travel, 5x on Chase Travel portal bookings, and 2x on all other travel. Its primary strength is the quality of its points and travel benefits:

• Points are worth 1.25 cents each when redeemed for travel through Chase Ultimate Rewards
• Trip cancellation/interruption insurance up to $10,000 per person
• Primary rental car insurance (not secondary)
• Baggage delay insurance and travel accident insurance

At only $95 per year, the Sapphire Preferred is one of the best-value cards for travelers.

Best for: Travelers who want comprehensive travel insurance and a lower annual fee.

Which Card Should You Choose?

The answer depends on where you spend most:

• Spend heavily on dining and groceries? Amex Gold earns more rewards per dollar in those categories.
• Travel frequently and want strong insurance? Chase Sapphire Preferred’s travel protections and lower fee make it the better travel companion.
• Want both? Some cardholders carry both — using the Gold for food spending and the Preferred for travel. Both programs let you transfer points to many of the same airline partners.

Bottom Line

The Amex Gold wins on dining and grocery rewards. The Chase Sapphire Preferred wins on travel benefits and overall value at a lower fee. If you eat out often and shop at U.S. supermarkets, the Gold justifies its higher fee. If you travel and want trip insurance, the Preferred is the smarter choice at $95 per year.

Frequently Asked Questions

Is the Amex Gold worth the $325 annual fee?

The Amex Gold’s $325 fee can be offset by its $120 dining credit and $120 Uber Cash credit — totaling $240 in annual value. If you use those credits, the effective fee is $85, which is easy to justify with 4x dining rewards.

Which card is better for travel?

The Chase Sapphire Preferred is better for travel. It earns 3x on travel, includes trip cancellation insurance, and its points transfer to 14 airline and hotel partners. Amex Gold earns only 3x on flights booked directly.

Can you use Chase points and Amex points on the same trip?

Not directly. Chase Ultimate Rewards and Amex Membership Rewards are separate programs. Some transfer partners overlap (like Air France/KLM Flying Blue), but you cannot pool points between the two programs.

A cash-out refinance lets you replace your existing mortgage with a new, larger loan and pocket the difference in cash. It is a way to tap your home equity for large expenses — but it comes with significant tradeoffs you need to understand before proceeding.

How a Cash-Out Refinance Works

Suppose your home is worth $400,000 and you owe $200,000 on your mortgage. You have $200,000 in equity. With a cash-out refinance, you could take out a new mortgage for $280,000. After paying off the existing $200,000 loan, you receive $80,000 in cash (minus closing costs).

Your new loan is larger, your monthly payment may change, and you start the loan term over — but you have accessed a large sum of cash.

How Much Can You Cash Out?

Most lenders allow you to borrow up to 80% of your home’s value (leaving 20% equity). Some programs allow up to 90%.

Maximum loan-to-value (LTV) formula: Home value × 80% minus current mortgage balance = maximum cash out

Example: $400,000 × 0.80 = $320,000 minus $200,000 = $120,000 maximum cash available

Requirements for a Cash-Out Refinance

• Sufficient home equity (usually at least 20% remaining after cash-out)
• Credit score of 620 or higher (higher scores get better rates)
• Debt-to-income ratio (DTI) typically below 43–45%
• Stable income and employment history
• Home appraisal

Cash-Out Refinance vs. HELOC vs. Home Equity Loan

Feature	Cash-Out Refi	HELOC	Home Equity Loan
Structure	New first mortgage	Revolving credit line	Second mortgage lump sum
Interest rate	Fixed or adjustable	Variable	Fixed
Closing costs	2–5% of loan	Lower or none	Lower than refi
Replaces current mortgage	Yes	No	No

Pros of a Cash-Out Refinance

• Lower interest rate than personal loans or credit cards. Home equity financing is typically much cheaper than unsecured debt.
• Potentially lower rate than your current mortgage. If rates have dropped since you originally borrowed, you may be able to cash out and lower your rate simultaneously.
• Fixed rate and payment. Predictable costs for the life of the loan.
• Tax deductibility (sometimes). Interest may be deductible if you use the cash for home improvements (consult a tax advisor).
• Large lump sum. Suitable for major projects or debt consolidation that requires a big payment upfront.

Cons of a Cash-Out Refinance

• Closing costs are significant. Expect 2%–5% of the loan amount — potentially thousands of dollars.
• You reset your mortgage term. Refinancing into a new 30-year loan extends the period over which you pay interest.
• Your home is collateral. If you cannot make payments, you risk foreclosure.
• Rate may be higher than your current mortgage. If you have a low-rate mortgage from 2020–2021, a cash-out refi may significantly raise your rate.
• Reduced equity. You have less of a cushion against market downturns.

When a Cash-Out Refinance Makes Sense

Home improvements that add value. Using equity to fund a kitchen remodel or addition can increase your home’s market value, creating a return on the investment.

Debt consolidation with a large balance. Consolidating high-interest credit card debt at a much lower mortgage rate can reduce your monthly interest costs significantly — if you commit to not running the cards back up.

Major necessary expenses. Medical emergencies or other unavoidable large costs where home equity is the lowest-cost option available.

When a Cash-Out Refinance Does Not Make Sense

Your current rate is significantly lower than today’s rates. Trading a 3% mortgage for a 7% mortgage just to access cash is expensive. A HELOC or home equity loan may be cheaper in that scenario.

Discretionary spending. Financing vacations, luxury items, or lifestyle upgrades with home equity is a high-risk use of a secured asset.

Short-term homeownership plans. If you plan to sell within a few years, closing costs may not be worth it.

Bottom Line

A cash-out refinance is a powerful but consequential tool. It converts illiquid home equity into usable cash at relatively low interest rates, but it comes with closing costs, resets your mortgage, and puts your home at risk. Compare it carefully against a HELOC or home equity loan, and make sure the use of funds justifies the long-term cost.

Medical bills are frequently wrong, inflated, or negotiable. Hospitals and medical providers set prices well above what they expect to actually collect. With the right approach, most people can reduce their medical bills by 20% to 50% or more.

Start by Requesting an Itemized Bill

Always ask for an itemized bill — a line-by-line breakdown of every charge. Never pay a summary bill without seeing the detail first. Studies show that up to 80% of medical bills contain errors. Common billing errors include:

• Duplicate charges for the same service
• Charges for services not performed
• Upcoding (billing for a more expensive service than what occurred)
• Incorrect room or procedure codes
• Charges for items like gowns or bandages that should be included in room fees

Compare the itemized bill against your Explanation of Benefits (EOB) from your insurer. Any discrepancy is worth questioning.

Verify Your Insurance Was Applied Correctly

Before negotiating, confirm your insurance was billed correctly and applied the right in-network rates. Call your insurer and the provider’s billing department if anything looks off. Errors in insurance processing are common and correcting them can reduce your bill without any negotiation at all.

Ask for the Uninsured or Cash-Pay Rate

Hospitals have a “chargemaster” — a list of prices far above what insurers actually pay. If you are uninsured or paying out-of-pocket, ask explicitly for the cash-pay or uninsured rate. Many providers will immediately drop prices to what Medicare or Medicaid pays, or offer a similar discount. You often do not need to be uninsured to ask for this rate.

Negotiate Directly with the Billing Department

Call the hospital or provider’s billing department and ask to speak with a financial counselor or the billing manager. Use a calm, professional tone. Here is what to say:

“I received a bill for [amount]. I would like to discuss what options are available to reduce this balance. I understand hospitals offer discounts to patients who pay promptly or have financial hardship. Can you help me?”

Do not accept the first offer. Counter-offer at 40%–60% below the billed amount and work toward the middle. Many hospitals will settle for 50%–70% of the original bill, especially if you offer to pay in a lump sum.

Apply for Financial Assistance or Charity Care

All nonprofit hospitals receiving federal funds are required to have charity care programs for low-income patients. But “low income” can extend further than you expect — some programs cover patients earning up to 400% of the federal poverty level.

Ask the billing department about:

• Charity care or financial assistance programs
• Sliding-scale fees based on income
• Hospital-specific grant or aid programs

You may need to submit income documentation, but the savings can be substantial — potentially 100% forgiveness of the bill.

Set Up a Payment Plan

If you cannot pay in full, request a payment plan. Most hospitals will set up zero-interest installment plans. This is often better than putting the bill on a credit card. Do not let a bill go to collections — that damages your credit and eliminates your negotiating power.

When setting up a payment plan, also ask again if there is a discount for agreeing to the plan. Sometimes getting on a structured plan qualifies you for an additional reduction.

Use a Medical Billing Advocate

Medical billing advocates are professionals who review and negotiate medical bills on your behalf. They typically charge a percentage of the savings they achieve (often 25%–35%). For large bills, this can be well worth it — especially for complex situations involving insurance disputes or hospital errors.

Dispute Charges You Believe Are Wrong

If you believe a charge is incorrect, submit a written dispute. Send it to both the provider and your insurance company. Request that the charge be reviewed or removed, and cite the specific error. Providers are often willing to remove disputed charges rather than deal with the hassle of defending them.

Do Not Ignore the Bill

Ignoring a medical bill leads to collections, which damages your credit score and makes future negotiation harder. Even if you cannot pay, contact the provider immediately to discuss options. Hospitals would rather work out a payment plan than send a bill to collections.

Medical Debt and Your Credit Score

As of 2023, the three major credit bureaus (Equifax, Experian, TransUnion) removed medical debt under $500 from credit reports. Medical debts under $500 that appear on your report should be disputed and removed. Larger medical debts in collections may still appear, but the CFPB continues to push for further consumer protections in this area.

Bottom Line

Medical bills are negotiable far more often than most people realize. Request an itemized bill, verify your insurance was applied correctly, ask for the cash-pay rate, and call the billing department to negotiate. Even a 20%–30% reduction on a large bill can save thousands of dollars — and it often takes just one phone call.

Compound interest is the process of earning interest on both your original principal and the interest you have already earned. Over time, this creates an accelerating growth effect that Albert Einstein reportedly called “the eighth wonder of the world.”

Simple Interest vs. Compound Interest

Simple interest is calculated only on your principal. If you invest $10,000 at 5% simple interest, you earn $500 per year — every year. After 10 years, you have $15,000.

Compound interest is calculated on your growing balance. If you invest $10,000 at 5% compounded annually, you earn $500 in year one. In year two, you earn 5% on $10,500 — that is $525. The balance grows faster with each passing year.

The Compound Interest Formula

The formula for compound interest is:

A = P(1 + r/n)^(nt)

Where:

• A = the future value of the investment
• P = the principal (starting amount)
• r = the annual interest rate (as a decimal)
• n = the number of times interest compounds per year
• t = the number of years

Compound Interest Example

You invest $10,000 at 7% interest, compounded annually, for 30 years:

A = $10,000 × (1 + 0.07)^30 = $10,000 × 7.612 = $76,123

With simple interest at 7% for 30 years, you would have only $31,000. Compounding adds more than $45,000 in additional growth — without any extra contributions.

How Compounding Frequency Affects Growth

Interest can compound on different schedules:

• Annually: Once per year
• Quarterly: Four times per year
• Monthly: 12 times per year
• Daily: 365 times per year

More frequent compounding means slightly higher returns. On $10,000 at 5% for 10 years:

• Annual compounding: $16,289
• Monthly compounding: $16,470
• Daily compounding: $16,487

The difference is modest, but it matters over long periods.

The Rule of 72

The Rule of 72 is a shortcut to estimate how long it takes to double your money. Divide 72 by your interest rate:

• At 6%: 72 / 6 = 12 years to double
• At 8%: 72 / 8 = 9 years to double
• At 10%: 72 / 10 = 7.2 years to double

Compound Interest with Regular Contributions

Compounding is even more powerful when you add money regularly. If you invest $500 per month into an account earning 7% annually, after 30 years:

• Total contributions: $180,000
• Total balance: approximately $567,000
• Growth from compounding: approximately $387,000

More than two-thirds of your ending balance comes from compound growth, not your own contributions.

The Time Factor: Why Starting Early Matters

Time is the most important variable in compound interest. Consider two investors, both earning 7% annually:

• Investor A starts at 25, invests $5,000/year for 10 years, then stops. Total invested: $50,000. Balance at 65: approximately $602,000.
• Investor B starts at 35, invests $5,000/year for 30 years. Total invested: $150,000. Balance at 65: approximately $472,000.

Investor A invested $100,000 less but ended up with more money — purely because of the extra 10 years of compounding.

Compound Interest Works Against You in Debt

Compound interest also works in the lender’s favor. Credit card debt at 20% APR, compounded monthly, can double your balance in about 3.6 years if you make no payments. This is why carrying high-interest debt is so destructive — compound interest works against you just as powerfully as it works for you in investments.

Where You Find Compound Interest

• Savings accounts and money market accounts
• Certificates of deposit (CDs)
• Brokerage accounts and retirement accounts (returns reinvested)
• Dividend reinvestment
• Credit card balances (compounding working against you)
• Mortgages and other loans

Bottom Line

Compound interest rewards patience and punishes delay. The earlier you start saving and investing, the more time compounding has to work in your favor. Even modest amounts, invested consistently over decades, grow into wealth that would be impossible to accumulate through savings alone.