5 Smart Ways to Use Your Tax Refund

If you’re expecting a tax refund this year, you might be wondering what money moves can help you make the most of it. Should you save it? Invest it? Or spend it? Here are five of our favorite strategies for how to use your tax refund.

1. Supersize your emergency fund

You know how important it is to have a well-stocked emergency fund. When life unexpectedly sets you back financially—a blown water heater, a major medical bill, or a pink slip—your emergency cash reserve can help keep you afloat and out of unnecessary debt.

One of the tried and true ways to build your emergency savings is to slowly fund it bit by bit with automatic contributions from every paycheck. But by making a lump sum deposit using your tax refund, you’ll reach your goal much faster.

How to save it: Assuming you regularly contribute $100 a month and your target balance is $5,000, it will take you four years to get there. Next, let’s assume you receive last year’s average federal tax refund of $3,000. If you drop that amount directly into your emergency savings fund account, you’d reach your target savings goal in only 1 year, 8 months.

> Tip: How big should your emergency fund be? Figure it out with this easy calculator from Money Under 30.

2. Decimate debt

How amazing would it feel if you could knock out a debt that’s been hanging over your head for far too long? Or how would it feel to take a massive bite out of an overwhelming credit card balance? When you use your tax return to pay off debt faster, you can save yourself years of worry and likely thousands of dollars in accumulated interest.

How to spend it: Suppose you typically pay the minimum owed ($200 for example) toward an outstanding $5,000 credit card balance. Assuming a 15% interest rate on that card, and that you don’t add any more to it, you’ll be paying off that card for a whopping 79 months (six and a half years!) and shelling out $2,900 in interest before you’re done.

But what if you applied your $3,000 tax refund to that debt while continuing to pay the monthly minimums? You could be debt-free in only 23 months and save yourself more than $2,500 in interest payments. Now that’s progress.

> Tip: If you want to see how much time and money you can save by making a lump-sum payment toward your debt, punch your numbers into Student Loan Hero’s Extra Payment Calculator.

> Tip: Need to tackle even more of your debt than your tax refund can handle? Try bridging the gap with a personal loan that can transfer balances for you.

3. Upskill your income

In today’s job market, fine-tuning your skills can mean more money in your pocket. The rewards of being more effective in your current line of work, more confident when you ask for that raise, or positioning yourself for a better, higher-paying job, is an investment that can pay you back many times over.

How to spend it: Whether you clean homes, field customer service calls, or write code for a living, consider spending part of your tax refund improving your communication skills or core job skills, or learning something new altogether. This could mean paying someone to rewrite your resume, going back to school to obtain a special certification, or buying the tools you need to improve your work productivity. No matter what, investing in your skills can ultimately lead to an increase in your future earning potential.

> Tip: Read more about the skills most worth learning in 2019.

4. Reach a big goal faster

You probably have several medium-to-long-term goals for your cash, such as:

  • Covering the cost of your kids’ continuing education
  • Paying up front for the wedding or car of your dreams
  • Putting a down payment on a home
  • Launching that small business you’ve been dreaming about
  • Retiring by the time you’re 70

If you’ve prioritized building a strong financial foundation, you’ve already put a plan in motion to reach those dreams. And if you pour that tax refund directly into your savings goal, you’ll get there much faster.

How to make it happen: If your goal is savings, opening a dedicated, high-interest savings account is a good way to watch your money grow and easily accessible. If your goals include planning for retirement or putting money away for future use, look into specialized accounts that offer tax benefits such as opening an IRA or a custodial account to grow your cash for your children’s future expenditures once they come of age.

5. Invest to grow your money for your future

If you’ve got a good handle on your emergency savings, credit situation, and other near-term financial needs, maximizing the impact of your tax refund over the long haul by investing it may be of interest. If you invest in something like LendingClub Notes, a fixed income alternative, you have the option to not only invest your initial tax refund dollars (your principal investment), but to reinvest your principal and interest as you get monthly payments, which may help your investments grow more quickly.

How to invest it: Here’s an investment scenario to consider. By investing the average 2018 Federal tax refund amount of $3,000 and any dividends, and assuming an annual return of 7%, after 10 years you’d nearly double your money. The longer your time horizon, the more you could see your money grow.

Of course, investing comes with a measure of risk. The market is constantly moving so it’s important you research the track record of the securities or other investment instruments you put your money into. LendingClub investors have historically seen returns of 3% to 8%, so you may consider putting your tax refund into a taxable, retirement, or custodial LendingClub investment account.

So how will you save, invest or spend your tax refund this year? Choose one of these smart money moves to quickly make a powerful impact on your financial future.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by LendingClub. Links are provided for informational purposes and should not be viewed as an endorsement.

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Source: lendingclub.com

5 Steps for Building a Strong Financial Foundation

Do you want to be the master of your money?

So many people crave financial health but feel less than satisfied with where they are. Our recent survey found that just 34% of participants feel that they’re doing well financially. That leaves a sizable amount of the population in need of guidance and support. So how can we all get to a place where we’re empowered with our money?

The key is to build a financial foundation that takes care of you now while supporting your future goals. Putting that structure in place is surprisingly straightforward. If you want to boost your financial confidence and set yourself up for success, this five-step method will help get you started.

Step 1: Get organized

Before you do anything else, get crystal clear about where you are right now with your money. Yes, you’ll need to round up some documentation, but this one-time exercise provides an invaluable baseline view into your financial health.

Start by building a personal balance sheet—which is simply a summary of your assets (what you own) and liabilities (what you owe). Your assets may include things like your bank account balances, investment holdings, a home, family car(s), and more. Your liabilities are the debts that you owe—like a mortgage, an auto loan, a personal loan, credit card debt, and so on. List out each asset and liability individually on a single sheet of paper. This is your personal balance sheet.

Once you have all your data, you’ll have a general sense of your net worth by adding up all your assets and subtracting your liabilities. Now let’s look at your monthly cash flow—which is every source of income you have and the expenses you have on a regular basis. (A budgeting template, like this one from the FTC, can make this process easy!).

Finally, check in on your credit. You’re entitled by law to a free copy of your credit report from each major credit bureau.

Step 2: Protect yourself

Now that you know where you stand, it’s essential that you put a plan in place to keep you financially safe along your journey.

  • Emergency Fund: If you don’t already have one, you’ll need to focus on building an emergency fund. (Check out our step-by-step process for getting yours up and running.) An emergency fund is a must-have for keeping you financially afloat—versus dipping into debt—when facing an unexpected cost, a job loss, or other crises.
  • Insurance: Check your insurance coverages. Insurance policies limit your out-of-pocket expenses when unforeseen things occur like medical costs, car accidents, disabilities, and even death. Even if you have coverage in place, you’ll want to review them as your lifestyle or family makeup may have changed since you purchased the insurance. You may be able to find a cheaper policy.
  • Estate Plan: Create or update your estate plan, which is simply a set of directions you provide about how what you leave behind is handled when you die. Estate plans may include naming your heirs, dividing up your assets, creating a trust, and assigning guardians for minors.

Step 3: Prioritize debt reduction

While some debt may be beneficial for your financial situation, you should be mindful of over-extending yourself because paying interest on any money you’ve borrowed can keep you from putting money toward your other financial goals. Focusing on debt repayment is a great way to free up cash and build that financial foundation.

Consider implementing an accelerated debt repayment strategy like the debt snowball method. Also, to simplify your debt payments and maybe knock down your interest rate, look into consolidating your loans or credit card debt.

Step 4: Define your financial goals

You’ve put the pieces in place to build the future of your dreams. So what do you want? Now is the time to spell out exactly what goals you have for both the short term and the distant future. Write them down, and make your goals SMART: Specific, Measurable, Achievable, Realistic, and Time-bound.

Ready to start brainstorming? Here are a few ideas to get you started:

  • Build an emergency fund.
  • Pay off high-interest credit card debt.
  • Save for a down payment on a home.
  • Improve your credit score.
  • Learn how to invest with confidence.
  • Set up vacation fund and budget to avoid putting it on your credit card.
  • Look into a secondary stream of income.
  • Retire by age 65.

Step 5: Make it happen

Once you’ve got your balance sheet and goals in writing, marry the two by identifying the areas for improvement in your current financial situation, and how you can make changes to get to your goals.

Once you’ve got your balance sheet and goals in writing, it’s time to get moving! Remember, your goals need to be achievable and realistic, so don’t overwhelm yourself by trying to accomplish them all at once. Maybe step one in building your financial foundation is opening a bank account to start your emergency savings. It could also be opening a retirement account or calling an estate lawyer to iron out your estate plan.

  • Have discipline: No matter what your goals are, sticking to the plan you just created and checking off your goals one by one will keep you progressing.
  • Budget: One of the most important aspects of a financial foundation is a balanced budget. you can’t be financially healthy if you spend more than you earn! Use the balance sheet you created to build a budget that reflects the reality of your income and expenses.
  • Automate: Make life easier by automating as much as possible like setting up recurring money transfers from your paycheck to special savings accounts or automating your bill payments so you never miss a due date.

Building a financial foundation takes focus and effort. But when you follow your step-by-step process, you’ll see real results with your money and gain confidence in your ability to create and stick to a financially healthy life.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by LendingClub. Links are provided for informational purposes and should not be viewed as an endorsement.

The post 5 Steps for Building a Strong Financial Foundation appeared first on LendingClub Blog.

Source: lendingclub.com

Spotlight On: Rockstar Women Engineers

As Women’s History Month comes to a close, we remain grateful and inspired by all the strides women have made in financial services, engineering, technology, and beyond. As a company, we pride ourselves on building teams that come from all walks of life and help us foster a culture where everyone is accepted, and differing viewpoints are heard. Our selection to Bloomberg’s Gender-Equality Index illustrates our continued efforts to increasing diversify our workforce, but sadly there are industry-wide realities we must continue to make progress toward.

As the leader in marketplace lending, we make a concerted effort to promote our female employees throughout the organization. Their stories help inspire and usher in the next generation of leaders. In this spirit, we spoke with a few of LendingClub’s female engineers to learn more about their experiences and share advice for those advancing in any traditionally male-dominated field.

Michelle Wang, Senior Software Engineer

Who or what inspired you to begin an engineering career?

I was good at math and science as a kid, so it felt natural to continue pursuing a STEM field, but I didn’t want to do research or work with living things, so I ended up choosing computer science because it was the most fun. If you’ve never tried it, writing code is pretty instantly gratifying.

How have you navigated a traditionally male-dominated field?

This isn’t just applicable to gender imbalanced fields, but finding allies (or friends!) and being a good ally has been really important to me. It helps foster belonging, and it just makes things so much better when you’re able to work in coalition with people who care about you and have your back.

What are your key pieces of advice to women seeking to enter this specific field?

You belong here. Most people you’ll meet, both men and women, are friendly and supportive and inclusive and want to actively help you succeed.

How has LendingClub supported your career goals and development?

The people around me at LendingClub have been amazingly supportive and are a big reason that I work here. I work with colleagues who listen, value my contribution, and give me space to step up into leadership roles. I always feel like I have a seat at the table and have learned a lot about being a responsible code owner, pragmatic engineer, and generous team member, from others across the organization who lead by example every day. My managers and directors up the ladder have also been great. They have actively asked me about my immediate and long term goals, pushed me to take opportunities that align with where I want to go, and fostered an environment where I don’t hesitate to share concerns or ask for things. I have grown immensely during my time at LendingClub and look forward to continuing on that upward path.

Alejandra Tonda, Senior Manager, Engineering

Who or what inspired you to begin an engineering career?

One of my professors at high school. He was the kind of person who cares about his students and really taught us to think critically. He pulled me aside and invited me to join a group of students to help him at the school so we could start getting familiar with the environment as well as learn about computer science. That experience really made the difference for me.

How have you navigated a traditionally male-dominated field?

Initially, I didn’t feel comfortable about it. Especially back in the days, at school. I was shy about asking my teachers questions and it was hard for me to build relationships with my peers. It took me quite a long time to find other girls and finally join a student group. From then on, things were much easier.

What are the biggest challenges you’ve faced, and how have you overcome them?

For me, the hardest part was changing my attitude to “I can do this, I can own this, I am capable as well.” To prove to myself that I can succeed. In the environment I grew up in, there weren’t ton of examples of woman leaders who inspired me, so that made it more challenging at the beginning.

What are your key pieces of advice to women seeking to enter the field?

Network—that has helped me tremendously. Being connected with women, sharing same pain points, learning from each other and developing somewhat of a sorority has empowered me and helped me to grow at a completely different pace.

How has LendingClub supported your career goals and development?

My managers and peers have been very supportive. They challenge and guide me by providing all the tools and trainings I need. Networking within LC has been very helpful as well, and LCWIN (LendingClub’s Women’s Internal Network) especially has opened a variety of options for me. Programs like Elevate were such a great experience, I wish every LendingClub woman manager would get a chance to participate.

Anything else you’d like to share to help empower the next generation of female leaders?

Connect, and don’t be afraid to speak up. There are others like you out there with the same questions and concerns. In diversity, there is strength.

Triveni Gaba, Lead Software Engineer

Who or what inspired you to begin an engineering career?

Engineering is a field that allows us to challenge real world problems by designing practical and efficient solutions. We can dive into problems and approach them in hands-on manner. I love doing that. My parents were the key force in motivating me to pursue this career.

How have you navigated a traditionally male-dominated field?

Most of the times, teams are looking for people who are best at what they do. With hard work and self-confidence, it has been a great journey, where people respect you for the work you do and also empower you to grow in your career.

What are the biggest challenges you’ve faced, and how have you overcome them?

Being taken seriously due to gender perceptions. I think this is a challenge most women in this industry face, especially during the first few years. This isn’t something that will change overnight; it takes confidence and a positive attitude to build that rapport.

What are your key pieces of advice to women seeking to enter the field?

Believe in yourself. Trust that your opinion matters and don’t fear sharing your ideas. Every idea deserves to be brainstormed.

How has LendingClub supported your career goals and development?

LendingClub has a positive diverse culture. Here, I work with colleagues and managers who are super supportive of women in tech. I have been treated like any other teammate, given credence for my expertise, and my voice matters!

Anything else you’d like to share to help empower the next generation of female leaders?

Love what you do and do what you love. If you use your talent for something you are passionate about, there is no stopping you! Each generation is responsible for paving the way and bettering the next.

LendingClub is helping millions of Americans take control of their financial lives. We strive to treat people with respect and fairness, and that ideal shapes how we work, how we treat each other, and how we invest in our employees and our community. Join us in using data, bold thinking, and a commitment to innovation to help put millions of Americans on a path to financial success. Search for available openings on our Careers page.

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Source: lendingclub.com

Balance Transfer Loan or Balance Transfer Credit Card? How to Choose

Feeling stuck in an ongoing cycle of credit card debt? We know how frustrating it can be to continually move debt from one credit card to another, making minimum payments but never reducing your overall balance. You may have tried balance transfer credit cards in the past—and you may be familiar with their restrictions, introductory periods, and other fine print. If you’re tired of the debt cycle, it could be time to consider a balance transfer loan to pay down your debt and start your journey toward financial freedom.

Balance transfer loans versus balance transfer cards

Balance transfer credit cards

A staple of the financial industry, credit card companies have used balance transfer cards as a way to attract new customers—or win back existing customers—for decades. In fact, you may have even received mail offering a 0% interest rate and no monthly fees for a short period of time (usually around 6-12 months).

Although balance transfer credit cards can sound like a great deal, they often come with a lot of hoops to jump through. Depending on your credit history, many offer low introductory rates up front, but come with high interest and fees after the promotional period expires. Frequently there are fees associated with the balance transfer itself—often around 3% of the total transfer amount.

Trickiest of all, when paying off a balance transfer credit card (or nearly any other credit card for that matter), your payments are usually applied to the items at the introductory rate (or lowest APR) first, leaving items with higher APRs as revolving debt on your card. What does this mean? You end up paying interest on top of interest, which can make getting out of debt feel next to impossible.

Tip: If you get a low-interest or no-interest credit card, especially from retailers like home furnishing or clothing stores, pay attention to the expiration date on your introductory rate. In many cases, if you don’t pay back the original balance in full by the expiration date, the deferred interest can come back—plus the interest you would have paid in the meantime. That means you’d be responsible for the remaining balance on the credit card, plus the original interest you would have paid on the entire balance, PLUS the interest the interest would have accrued. Yes, you read that correctly—they’re charging interest on interest. That could amount to hundreds—even thousands—of dollars on top of your original balance.

If this sounds overwhelming, don’t stress. Let’s look at a balance transfer personal loan next.

Balance transfer personal loans

Similar to balance transfer cards, a balance transfer loan also allows you to pay down high-interest debt and credit cards by consolidating them into one low monthly payment. But instead of using more revolving debt (as with a credit card) to accomplish this, you get a personal loan with a fixed term and a fixed rate. This means the APR you agree to when you apply is the same APR you will keep for the duration of your loan. You’ll never get a surprise notification that your rates have increased. And from the minute you accept your offer, you will know the exact date your balance transfer loan will be paid off. Since a balance transfer loan is not revolving debt, you’ll be able to circle the payoff date in your calendar.

Another benefit to balance transfer loans is they have no balance transfer fees. Although origination fees of 1-6% of the loan amount are typical, interest rates are often much lower than those on credit cards.

Deciding between a balance transfer loan or credit card

So when should you opt for a balance transfer loan versus a balance transfer credit card? As with most financial decisions, it depends. Try thinking about it like this:

    A balance transfer credit card might work for you if you qualify for a 0% or very low introductory offer from a credit card company with transfer fees below 3%, and if you think you can pay down the entire balance before the introductory rate is over.
    A balance transfer personal loan might be a better choice if you don’t qualify for one of those low introductory rates, if the transfer fee is higher than 3%, or you don’t think you can pay down the entire balance before the promotional period expires.

Still not sure which to choose?

Both balance transfer loans and balance transfer credit cards can help you consolidate debt, allowing you to make a single monthly payment instead of worrying about multiple bills and due dates from individual creditors. Which one you choose depends mostly on how quickly you are able to pay down your debt. Here’s a short recap of the benefits of both:

Benefits of a balance transfer loan for debt consolidation

  • Fixed, low interest rate that will not increase
  • Fixed pay-off period with a set end date
  • Better for paying over a longer period of time (typically 36 or 60 months)

Benefits of a balance transfer credit card

  • Low introductory rate
  • Better for paying over a short period of time (often less than 12 months)

If you think a balance transfer loan is right for you, LendingClub can help. Get started by checking your rate today.

The post Balance Transfer Loan or Balance Transfer Credit Card? How to Choose appeared first on LendingClub Blog.

Source: lendingclub.com

Marketplace Loans: How Might They Perform During A Downturn?

In this issue of Marketplace Insights, we focus on how marketplace loans might perform during an economic slowdown or recession.

Given the length of the current economic expansion, last year’s stock market dips, and growing recession concerns, investors have begun positioning for a more challenging investment environment. LendingClub’s experience of growth through the post-financial crisis period—to become the marketplace loan industry’s U.S. leader—supports our belief that marketplace loans’ unique features may make them resilient in a range of economic environments.


  • Marketplace loans may provide resiliency to diversified investment portfolios thanks to a combination of features including, relatively lower sensitivity to changes in interest rates and steady consumer demand for credit through different economic cycles.
  • LendingClub has deep expertise with consumer credit. Our platform is well-positioned to react to changing economic conditions.

In this piece we discuss marketplace loans as an asset class, review their historical performance, and discuss what that might mean for how they could perform during an economic downturn. We also highlight how LendingClub is preparing for a more challenging economic environment.

Read the full Marketplace Insights piece here.

The post Marketplace Loans: How Might They Perform During A Downturn? appeared first on LendingClub Blog.

Source: lendingclub.com

24 Landmark Facts about Women and Money

In honor of Women’s History Month—and the countless female financial trailblazers whose work laid the foundation for many of the financial freedoms women have today—we’ve rounded up a list of monumental events and fascinating figures that have shaped the story of women and money.

For centuries, women in the U.S. have fought for pay equality, lobbied for financial autonomy, and more than earned their places of leadership in the economy. Their legacy has impacted today’s world and economy in countless ways—here are a few notable milestones from 2000 to the present.

Earning Power

  • 1 in 3 married women earn more money each year than their husbands do.1
  • As of 2017, more than half a million women earned $100k or more in annual income.2
  • 45% of all U.S. millionaires are women.2

Financial Power and Independence

  • 31% of women keep their finances completely separate from their partners.3
  • 93% of women have significant influence in choosing their family’s financial services.4
  • 2 in 3 women handle the majority of money management in their households.5

Saving & Investing

  • Women save 9.0% of their take-home pay, while men save just 8.6% of theirs.4
  • Women’s investment portfolios receive a 0.4% higher annual return than men’s. Assuming equal pay, equal investment contributions, and a 30-year time horizon, that translates to nearly $300,000 more for your retirement.4

Spending Power

  • Women purchase 65% of new cars.6
  • Women purchase 85% of all branded products.6
  • Worldwide, women control more than $20 trillion of spending money.4
  • By 2028, 75% of global discretionary spending will be controlled by women.7

Women in Fintech—LendingClub’s Leaders

  • Chief Capital Officer Valerie Kay heads the entire investment division of LendingClub, leading all investor funding and scalable investment product innovation.
  • SVP of Risk Run Yi leads the credit strategy decisions, underwriting pricing, loss forecasting and new product development that bring borrowers to LendingClub.
  • Chief Compliance Officer Sylvie Brillaud leads the team of professionals who ensure fair lending standards and regulatory compliance across the entire company.
  • LendingClub values its diverse mix of talent, selected for a Bloomberg feature on gender diversity.
  • LendingClub’s Women’s Network hosts co-ed personal finance events, resulting in employees taking action to better their financial situations, like increasing their 401(k) allocations and moving emergency savings into high-yield accounts.

It’s undeniable that women have played a vital role in molding and driving the modern U.S. economy, in the fintech space, and at home. Check out the below for some of the monumental women and money moments that got us to where we are now.

A Timeline of U.S. Women’s History in Finance


Early 1700s: Pennsylvanian women are granted the right to own and manage property, but only if their husbands are physically or mentally unable to fulfill these duties.

1825: Rebecca Lukens becomes the first woman to head a U.S. industrial company after inheriting Brandywine Iron. The business eventually grew to be a Fortune 500 company.

1844: Maine becomes the first state to guarantee women the right to “separate economy.”

1848: New York passes the Married Woman’s Property Act, which gives a married woman the same financial rights as an unmarried woman and excuses her from liability for her husband’s personal debts.

1865: Pocahontas is the first woman to appear on American currency, depicted in the center of a crowd of men on a $20 bill.

1866: Emancipated black women working as laundresses in Mississippi unionize and organize a strike to demand better pay.

1869: Lydia Moss Bradley becomes what is most likely the first American woman to enter into a prenuptial agreement in order to protect her sizable assets.

1870: Victoria Woodhull and Tennessee Claflin open the first women-owned Wall Street brokerage house. It targets women investors as its primary customers.

1886: Martha Washington is the first woman to appear solo on U.S. currency when she becomes the face of the $1 silver certificate.

1903: Maggie Lena Walker opens Richmond-based St. Luke Penny Savings Bank, the first bank chartered by a woman in the United States.

1919: Sarah Breedlove becomes the country’s first self-made woman millionaire. She was born to freed slaves, orphaned, and later invented and sold homemade hair-care products to black women through the Madame C.J. Walker Manufacturing Company.

1933: Frances Perkins is appointed by FDR as the first female cabinet member. As the Secretary of Labor, she plays a major role in the creation of Social Security.

1938: The U.S. passes the Fair Labor Standards Act and institutes the federal minimum wage, eliminating many cases of gender wage disparity for hourly workers.

1960s: The U.S. grants women the right to have their own personal bank accounts.

1967: Muriel Siebert becomes the first woman seated on the New York Stock Exchange, joining 1,365 men.

1968: The Fair Housing Act, part of the Civil Rights Act, forbids discrimination in home lending on the basis of gender, race, and more.

1971: The Supreme Court unanimously strikes down an Idaho law that allows only men to administer estates in probate court. The legal brief that won the case was authored by future Supreme Court justice Ruth Bader Ginsburg.

1972: Katharine Graham becomes the first woman CEO of an established Fortune 500 company.

1974: Congress passes the Equal Credit Opportunity Act, which includes a ban on the banking requirement that women have a male co-signer on applications for credit and loans.

2003: The State Quarter series features its first woman, Helen Keller, on the Alabama quarter.

2007: Ruth Bader Ginsberg famously dissents in the case of Ledbetter vs. Goodyear Tire Company, where Lily Ledbetter sued the company, her employer, for gender discrimination after discovering she was paid less than male counterparts. While the Supreme Court voted 5-4 in favor of Goodyear, RBG pressed for Congress to amend the associated Title IV clause—and the Lily Ledbetter Fair Pay Act was the first bill President Obama signed when he took office in 2009.

2011: The U.S. Consumer Financial Protection Bureau (CFPB) is formed to oversee the fair lending practices of financial institutions and protect consumers from discriminatory business practices.

2014: Janet Yellen begins her four-year term as the first female Chair of the U.S. Federal Reserve.

2019: A record-breaking 102 women are sworn in to U.S. Congress, setting the stage for the next wave of change, from finance to equality and all areas in between.

During Women’s History Month—and every other day of the year—our hats are off to the financially savvy women who’ve brought us so far, and the extraordinarily powerful combination of women and money.

Through fair lending and transparency, LendingClub is doing its part to support equal access to financial products, providing a level playing field for women, and all of our customers, to take charge of their financial well-being.

  1. The Boston Consulting Group’s study.
  2. Wealth statistics, Shurwest.
  3. Study on joint partner accounts, Finder.
  4. 2017 study by Fidelity.
  5. “Women & Affluence” report, Citigroup.
  6. “Marketing to Women” report, Sheconomy®.
  7. “Growing Beyond: High Achievers” report, Ernst & Young.
  8. Women’s rights and their money: a timeline from Cleopatra to Lilly Ledbetter.
  9. Women, Money, and Power: An Historical Timeline.
  10. A History of Women on American Money.
  11. The History of Women in the Labor Movement.
  12. CFPB Launches Consumer Complaint Database.
  13. History of Fair Housing.
  14. Ruth Bader Ginsburg helped shape the modern era of women’s rights—before she joined the Supreme Court.
  15. U.S. enters new phase as women change the face of Congress.
  16. A Timeline Of Women And Wealth: The First Female Millionaires, Billionaires & CEOs And The Policies That Paved The Way For Them, Forbes.

The post 24 Landmark Facts about Women and Money appeared first on LendingClub Blog.

Source: lendingclub.com

How to Stop Living Paycheck to Paycheck and Save Money

The struggle to stay afloat financially is real. According to a report by employment website CareerBuilder, more than three-quarters of American workers are living paycheck to paycheck. More women, 81 percent, report living this way is the norm, compared with 75 percent of men.

Living on a financial tightrope requires a lot more than good balance. For starters, there is usually zero wiggle room in your wallet. So, unanticipated expenses (like a trip to the ER) can mean you have to sacrifice something else from your already tight budget. And saving for the future? It’s tough to do when the bulk of your paycheck goes to daily necessities. Not to mention, the possibility of slipping into serious debt can take a toll on your mental health.

If you happen to have a temporary financial crisis, options like personal loans can tide you over until you’re back on your feet. But if scraping by paycheck to paycheck is how you’ve always done it, there are steps you can take to stop the cycle and start saving.

Diagnose the Problem

Uncovering the root of your personal financial situation usually starts with tracking your expenses.

Tracking your expenses for as little as two weeks can help you understand where your money is going (though you should aim for at least a month). Take note every time money comes in, cash leaves your hand, or you buy on credit.

Once you have your log, examine it closely. Are you simply not earning enough to cover your essential expenses? More than half of minimum wage earners aren’t able to support themselves without holding down a second job. Or, are you overspending on non-essentials? Believe it or not, 9 percent of workers making $100,000 consistently live paycheck to paycheck. And sixty percent of six-figure earners are actually in debt.

After you’ve pinned down the reason why you’re living paycheck to paycheck, it’s time to tackle the problem.

Trim the Fat

Ever wondered where your money went at the end of the month? The solution to this is mindful spending. And that means starting with a simple budget to guide your spending choices and reduce your costs. Here are a few simple tips:

  • Eliminate pointless overspending. Paying too much for insurance? Get some new quotes and change providers if it makes sense. Shelling out on high interest? Negotiate lower credit card rates or look into a debt consolidation loan.
  • Stop spending on services you don’t use. You’ve stopped reading that monthly magazine. You never watch that premium channel. Could you be hosing down the car in your driveway instead of taking it through that fancy express wash every week? Cancel those perks and pocket the cash instead.
  • Swap out pricey goods for frugal alternatives. Instead of depriving yourself, get what you want for less. Ditch the theater and grab a movie for free at your library. Skip the new Italian restaurant and enjoy pasta by candlelight at home. Bypass the designer stores and buy your new duds at a discount outlet or secondhand store.
  • Avoid places that tempt spending. Hanging out around the mall or surfing shopping sites “just for fun” leads to impulse buys and reduces the amount you can save.
  • Deal with debt. Buying now and paying later is an expensive way to live. How much of your take-home pay is going to interest alone? Always make sure you’re paying at least your minimum payments. Once you cut costs using the methods above, pay extra toward your debt to reduce costly interest payments.

> More: Want to slash spending even further? Check out The Simple Dollar’s list of 100 ways you can cut costs.

Get Creative to Earn More

The problem with your money might very well be that you don’t earn enough to cover the basics. Today’s job market includes options for working odd hours, accommodating limited skill sets, or money-making tasks you can do while the kids are in school. From running errands for your elderly neighbor to starting an online business, your options for making extra money are unlimited, as long you have the motivation and the time.

Trick Yourself Into Saving

True story: A quarter of working Americans aren’t saving even one dollar each month.

If you’re among those who believe saving simply isn’t an option, start small—really small. Each pay period, set aside just 1 percent of your take-home pay. Are you still able to survive? (Do you even notice it’s gone?)

Get used to the adjustment. Then stretch yourself further. Save 2 percent of your income. Then shoot for 3 percent, and so on. Mr. Money Mustache, acclaimed blogger and saver, famously lived on just one-third of his income before retiring at age 30. But if setting aside the bulk of your income is not realistic, harness the power of automation to take the sting out of saving in these other ways:

  • Build an emergency fund. Automatically transfer a set dollar amount (no matter how small) into a savings account each payday.
  • Create a “goal” savings account. Maybe it’s a new roof, a weekend getaway, or your child’s birthday. No matter how large or small your ambitions, set up small, recurring transfers that whisk money into separate accounts for specific goals.
  • Sign up for your company 401(k) plan. Saving for retirement doesn’t get easier than an automatic deduction from your paycheck. Plus, your employer may offer sweet incentives like free money from a company match.

Ready to stop living paycheck to paycheck? With a few changes to your spending habits and some thoughtful planning, you can get ahead of your money and finally start saving for your future.

The post How to Stop Living Paycheck to Paycheck and Save Money appeared first on LendingClub Blog.

Source: lendingclub.com

2019 Trends in Women and Small Business

LendingClub’s second survey of more than 2,700 small business owners with our partner, Guidant Financial, reveals how female entrepreneurs and small business owners increasingly differ from their male counterparts.

Key findings include:

  • Nearly 3 out of 4 (72 percent) female small business owners have pursued higher education compared to 64 percent of their male counterparts
  • Black women are 40 percent more likely to be entrepreneurs than African American men (22 percent of females compared to 13 percent of males)
  • Women are 48 percent more likely to be concerned about the effects of the political climate than men.

The infographic below details our key findings from surveying women in small business:

To learn more about who female entrepreneurs are and what’s driving them, please download our white paper here.

If you’re a business owner looking for capital to invest in your business, we encourage you to consider a business loan through LendingClub. It takes just a few minutes to get a quote, there’s no cost, and no impact to your credit score to apply.

The post 2019 Trends in Women and Small Business appeared first on LendingClub Blog.

Source: lendingclub.com

Q4 2018 LendingClub Platform Update

To maintain equilibrium in the LendingClub marketplace, periodic adjustments are made, taking into account investor feedback, marketplace demand, loan performance, and the general interest rate environment. In line with that objective, effective February 19, 2019, interest rates are increasing for loan grades B-E by a weighted average of 57 basis points.

Please see below for our quarterly update on the credit environment and platform performance.  We believe marketplace loans can serve as powerful diversifiers for many investors’ portfolios, especially in volatile markets.

Macroeconomic, credit, and interest rate observations

Economic Backdrop

Economic fundamentals remain strong, despite increased stock market volatility and uncertainty about the longer-term macroeconomic outlook. Consumers remain healthy, with the unemployment rate, growth in payrolls,[1] and household debt service ratios[2] still favorable. The most recent jobs report[3] indicated the economy added 304,000 jobs in January, outperforming most economists’ expectations. While some economists point to interest rates, uncertainty over trade, and other geopolitical risks as reasons for caution,[4] broad economic indicators including the latest Manufacturing Institute for Supply Management (ISM) index of manufacturing activity[5] continue to suggest the economy is healthy. GDP is expected to come in at 2.5% for the fourth quarter of 2018.[6]

Credit Environment

Across the industry, credit is broadly stable, and delinquency rates remain flat[7]. Given we are in the later stages of the economic cycle and a generally high availability of consumer credit, we have seen some unsecured lenders tighten credit and make marginal pricing adjustments.[8]

Interest Rates

The Federal Reserve Board raised its benchmark federal funds rate an additional 25 basis points at its December meeting, for its fourth hike in 2018. However, following significant equity market volatility into year-end, the potential for a disorderly Brexit, and signs of softening growth in China, the Fed signaled a willingness to pause its planned 2019 rate increases at its most recent meeting “in light of global economic and financial developments.”[9]

Platform Enhancements

LendingClub employs a test-and-learn approach that enables us to prepare for a variety of credit environments. Over the past several months, we have undertaken additional tests around pricing, loan size, and user experience. Coupled with new functionality to enhance our ability to detect borrowers who are more likely to default early in their loan cycle, this continued emphasis on credit quality allows us to prepare for—and react quickly to—changes in economic conditions.

Effective today, February 19, 2019, interest rates are increasing by a weighted average of 57 basis points across grades B-E. We will continue to monitor the interest rate environment to inform decisions on potential future changes.

Updated Pricing & Return Forecast

Overall, we expect weighted average returns at a portfolio level to be 5.6% for new vintages, versus our projection of 5.8% last quarter. Looking across the portfolio, we are seeing stable performance overall, and improvements in higher risk segments based on changes made to the model in mid-2018. Please see the updated return forecast below. These projections incorporate the impact of new forecasts as well as the interest rate increases going into effect on February 19.

As always, we will keep investors apprised of changes on the platform.

Safe Harbor Statement
Some of the statements above are “forward-looking statements.” The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “predict,” “project,” “will,” “would” and similar expressions may identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual performance of the overall platform has differed from projected performance in the past, and could differ in the future. Factors that could cause actual results to differ materially from those contemplated by these forward statements include: increases to unemployment rates, particularly if such increases are concentrated in populations with a greater propensity to take loans facilitated by our platform; changes to consumer credit behaviors; stagnation or reduction in the growth of the nation’s gross domestic product or uncertainties created by political changes associated with a change in presidential administrations, the Company’s ability to continue to attract and retain new and existing retail and institutional investors; competition; and demand for the types of loans facilitated by the Company and those factors set forth in the section titled “Risk Factors” in the Annual Report on Form 10-K, filed with the SEC. LendingClub may not actually achieve the plans, intentions or expectations disclosed in forward-looking statements, and you should not place undue reliance on forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in forward-looking statements. LendingClub does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

[1] Source: U.S. Bureau of Labor Statistics, “Employment Situation Summary,” https://www.bls.gov/news.release/empsit.nr0.htm, as of 2/1/19.

[2] Source: The Federal Reserve Board, “Household Debt Service and Financial Obligations Ratios,” https://www.federalreserve.gov/releases/housedebt/default.htm, as of 1/8/19.

[3] Source: U.S. Bureau of Labor Statistics, “Employment Situation Summary,” https://www.bls.gov/news.release/empsit.nr0.htm, as of 2/1/19.

[4] Source: WSJ.com, “Economists See U.S. Recession Risk Rising,” https://www.wsj.com/articles/economists-see-u-s-recession-risk-rising-11547132401, 1/10/19.

[5] Source: Institute for Supply Management, “January 2018 Manufacturing ISM® Report On Business,® https://www.instituteforsupplymanagement.org/about/MediaRoom/newsreleasedetail.cfm?ItemNumber=31024&SSO=1, 2/1/19.

[6] Source: Federal Reserve Bank of Atlanta, GDPNow, https://www.frbatlanta.org/cqer/research/gdpnow.aspx, as of 2/4/19.

[7] Source: Moody’s Analytics, based on personal loan data provided by the American Bankers Association.

[8] Source: WSJ.com, “Credit-Card Spending Limits in the Crosshairs as Issuers Grow Cautious,” https://www.wsj.com/articles/credit-card-spending-limits-in-the-crosshairs-as-issuers-grow-cautious-1540805401, 10/29/18 and Kroll Bond Rating Agency, “2018 Consumer Loan Marketplace Lending Year In Review and 2019 Outlook,” 1/31/19.

[9] Source: Federal Open Market Committee, “Transcript of Chairman Powell’s Press Conference,” https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20190130.pdf, 1/30/19.

[10] “Average Interest Rate” is based on weighted average interest rates we obtained in testing by using the subgrade and maturity mix for issued loans in December 2018. As such, they reflect what interest rates may have obtained had the rate and credit policy changes going into effect on February 19, 2019 been in effect in December.

[11] “Projected Charge-Off Rate,” is LendingClub’s projection of the aggregate dollar amount of loan principal charged-off, net of any amounts recovered and accounting for the impact of amounts prepaid, as an annualized percentage of the aggregate dollar amount of loan principal for all loans issued under the Prime Program after February 19, 2019. Projected Charge-Off Rate is not a promise of future results and may not accurately reflect actual charge-off or prepayment rates. Actual charge-off and prepayment rates experienced by any individual portfolio may be impacted by, among other things, the size and diversity of the portfolio, the exposure to any single loan, borrower or group of loans or borrowers, as well as macroeconomic conditions.

[12] “Projected Return” is a measure of the estimated annualized return rate on invested principal (meaning for all funds then invested in Notes or loans) using an internal rate of return (IRR) methodology using a monthly term. Monthly cash flow projections are calculated as follows: the scheduled principal and interest payments based on the Interest Rate, minus the amount of such principal and interest payments lost due to the Projected Charge-Off Rate, minus Projected Fees. Monthly IRR figures are annualized by multiplying the monthly IRR figure by 12. Projected Returns are calculated based on grade and maturity mix described in the “Average Interest Rate” disclaimer above. Projected Return is not a promise of future results and may not accurately reflect actual returns. Actual returns experienced by any individual portfolio may be impacted by, among other things, the size and diversity of the portfolio, the exposure to any single Note or loan, borrower or group of Notes, loans or borrowers, as well as macroeconomic conditions. Individual results may vary, and projections are subject to change. The information presented is not intended to be investment advice, guidance, or a guarantee of the performance of any Note or loan. Notes are offered by prospectus filed with the SEC and investors should review the risks and uncertainties described in the prospectus prior to investing. Actual results may be materially worse.

“Interest Rate” is equal to the weighted average stated borrower interest rate for the loan grade or mix of loan grades (whichever is applicable) using the grade and maturity mix described in the “Average Interest Rate” disclaimer.

“Projected Fees” for loan purchasers means the aggregate estimated impact of LendingClub’s then-applicable: servicing fee (1%), collection fee (18%), recovery fee (18%), and an administrative fee (0.10%), each as of the date above.

“Projected Fees” for Note investors means the estimated impact of all applicable fees as well as the impact of interest not earned during the administrative holding period in the first month (2 business days). Applicable fees are LendingClub’s service fee and collections fee (if applicable). LendingClub charges an investor service fee of 1% of the amount of any borrower payments received by the payment due date or during applicable grace periods. The service fee is not an annual fee and may therefore reduce annual investor returns by more or less than 1%. We estimate the collection fee based on expected charge-off rates and the expected number of late payments that will be collected on past due loans with a given grade and term. For more detail on LendingClub fees for Note investors, please click here. Individual results may vary, and projections can change. Past performance is no guarantee of future results.

The post Q4 2018 LendingClub Platform Update appeared first on LendingClub Blog.

Source: lendingclub.com

2019 Trends in African-Americans and Small Business

LendingClub teamed up with Guidant Financial to survey more than 2,700 current and aspiring business owners for our second annual State of Small Business survey.

African-American business owners are happier, younger, and more female-led than the average of SMB owners surveyed. They’re also showing increased confidence in the state of small business going into 2019. The infographic below details our key findings from surveying this population.

To learn more about who African-American business owners are and what’s driving them, please download our white paper here.

If you’re a business owner looking for capital to invest in your business, we encourage you to consider a business loan through LendingClub. It takes just a few minutes to get a quote, there’s no cost, and no impact to your credit score to apply.

The post 2019 Trends in African-Americans and Small Business appeared first on LendingClub Blog.

Source: lendingclub.com