“Buy Now, Pay Later” (BNPL) services have become increasingly popular, offering a tempting alternative to credit cards. A 2022 report from the Consumer Financial Protection Bureau found that from 2019 to 2021, the number of BNPL loans originated in the U.S. by the five lenders it surveyed grew from 16.8 million to 180 million, highlighting how appealing these services are to consumers.

The Allure of BNPL

Services like Affirm, Afterpay, and Klarna allow you to buy what you want now and pay for it over time; no need to wait for your next paycheck or save up for months. Add to that an interest-free option and this feels like a no-brainer, especially when budgets are tight. With BNPL, you can spread that $200 coffee table over four payments of $50, making it easier to fit into your monthly budget. It’s convenient, quick, and feels like a smart financial move, but it’s important to understand the fine print.

The Hidden Costs

Falling Behind on Payments: According to LendingTree, nearly half of BNPL users (47%) have paid late on one of these loans at some point, up from 40% in 2023. When this happens, you can be hit with late fees, which can quickly add up and make the total cost of your purchase higher than expected.

Impact on Credit Score: Some BNPL providers report your payment history to credit bureaus, which means missed payments could hurt your credit. (On the flip side, regular on-time payments may not necessarily help your credit score, as not all BNPL services report positive payment history.)

Risk of Overdrawing Funds: When you sign up for a BNPL service, you often have to give them access to your checking account for automatic payments. If you forget about a payment or spend more than you expected, the BNPL provider can still withdraw funds from your account. This could lead to an overdrawn account, resulting in additional overdraft fees from your bank.

Debt Accumulation: Because BNPL makes it so easy to purchase now and pay later, it can encourage overspending. You might be more likely to buy things you don’t really need, simply because the payments feel manageable. This can lead to debt accumulation, making it harder to reach your financial goals.

Finding Balance

How can you enjoy the convenience of BNPL without falling into financial traps? The key is to use these services wisely. Treat BNPL like any other form of credit. Ask yourself if you can afford the payments without stretching your budget. Avoid using BNPL for impulse purchases, and always read the fine print to understand any potential fees or penalties.

If you find yourself struggling with BNPL payments, don’t hesitate to reach out for support. Ask your financial institution what resources they can provide when it comes to helping manage your payments. You can also connect with our trusted nonprofit partner GreenPath Financial Wellness. Their certified financial experts can help you stay aligned with your budget and financial goals.

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As summer hits its stride, the idea of financially preparing for the holidays might feel like overkill. Consider this: money is the most cited source of stress during the holidays, with 58% of US adults worrying about overspending or not having enough money.  

July is an ideal month to assess your financial picture and make mid-year adjustments that will help you cruise into the holiday months with fewer concerns. To make planning easier, here is a seven-item checklist you can use as your guide:  

1. Review Your Budget 

With a customizable budgeting worksheet or free app, identify areas where you may be overspending and eliminate costs or comparison shop if possible. Budgeting isn’t about guilt, rather it is a way to ensure you’re saving a little each month – ideally 10% of your income. Less still counts.

2. Automate Savings

Consider the “set it and forget it” approach to allocating savings so that when peak holiday spending season comes around, you’ve avoided (or at least minimized) high interest credit card balances that can put a damper on the season and coming year. Look into opening a holiday-specific savings account at your financial institution and start saving now.

3. Strategize Debt Repayment

Review the balances and interest rates of your credit cards, loans, and other debts. Tackle high-interest payments first (so you’re able to put more toward principal in the long run). Explore a debt management program which can help you eliminate debt faster.

4. Check Your Credit Report

Request a free copy of your credit report from AnnualCreditReport.com. Review the report for any inaccuracies or signs of identity theft. Dispute any errors you find, which could be a contributing factor to a lower score.

5. Revisit Investments

If you have any investment accounts, assess whether your allocations still align with your long-term goals and risk tolerance. Market conditions often change, and your investment strategy should account for these fluctuations

6. Maximize Retirement Contributions

If you have a retirement account, check your contributions, and see if you have any room in your budget to increase them. This especially applies if your employer offers matching contributions, as it’s essentially free money. The sooner you invest, the more time your money has to grow.

7. Review Insurance Policies 

Ensure that your health, auto, home, and life insurance policies still meet your needs. Life changes such as marriage, the birth of a child, or significant purchases might necessitate adjustments to your coverage or comparison shopping for more favorable rates.

Get Connected

Chat with your financial institution about what resources they offer so you can feel more confident as you approach peak spending season. If you need additional support, GreenPath Financial Wellness also offers cost-free, judgment-free financial counseling with certified experts ready to meet you exactly where you’re at.  

Recommended for You:  

Online Course: Behavioral Economics (15 minutes) 

This free course will help you better understand your spending behavior and save more this holiday, just by changing small habits.

In a perfect world, summer would be a time for children and parents to soak up the sun and enjoy a slower pace. As most of us know, work calendars don’t align with school calendars. Summer camp is a lifesaver for busy households, and costs add up quickly, leaving many families feeling financially burdened.
Here are ten strategies for cutting costs this season:

1. Camp Scholarships: Many summer camps offer scholarships or financial aid for families in need. Chat with camp staff to determine your eligibility and submit any required documentation.

2. State Subsidies: Depending on where you live, some states offer income-eligible subsidy programs for qualifying families. Start your search online for local organizations that can steer you to the proper application forms.

3. Day Camps: Day camps can be significantly cheaper than overnight camps since they don’t include accommodation expenses. Look for day camps in your area that offer similar activities and experiences to overnight camps.

4. Sibling + Group Discounts: Do you have more than one camper in your household this year? Or perhaps even other children in your parent group that could add to the headcount? Look for camps that offer sibling and/or group discounts.

5. Community Programs: Most community recreation centers offer year-round low-cost or free programs for children, including day camps, sports leagues, or even virtual experiences led by online educators. Beyond rec centers, check out local offerings at YMCA or Boys & Girls Club.

6. Flexible Payment Plans: Research camps that offer flexible payment plans, allowing you to spread out the cost over several months rather than paying a lump sum upfront.

7. Partial Weeks: Does your schedule allow for partial weeks at camp? Many camps offer the option to enroll two or three days per week (or even on a per-day basis) instead of a full week session. This can make camp attendance more manageable in the short-term, especially if you have summer travel plans.

8. Pack Your Own Supplies: Camps often charge extra for snacks, meals, and supplies. Save money by packing your child’s snacks and lunch each day, and ensure they have necessary supplies like sunscreen, bug spray, and water bottles.

9. Flexible Spending Accounts: Some employers may allow allocation of FSA funds to cover expenses if the camp is considered a qualified dependent care expense. Check your specific plan to confirm whether summer camp expenses are reimbursement eligible.

10. Volunteer Opportunities: Some camps offer discounts for families willing to lend their time (similar to co-op programs where parents can assist in classrooms). Helping with administrative tasks or coordinating activities has the secondary benefit of enriching your resume.

You’re not alone when it comes to crunching the numbers. Connect with your financial institution to see what resources we offer and consider free financial counseling with our trusted partner, GreenPath Financial Wellness, if you need support in building your summer budget.

Additional Resources:

Interactive Budgeting Worksheet

Rest, Recharge, and Save with a Staycation

Vacationing on a Budget