Tag: Budgeting

 

America’s Most Expensive Cities: How to Save on Rent in San Francisco

Welcome to Expensive Cities, a new series designed to help renters find affordable apartments in the nation’s most unaffordable metros.

If you’re hunting for an apartment in San Francisco, the city with the highest rents in the nation, congratulations on bucking at least three trends. First, you’re not joining the mass exodus from the Bay Area to cheaper cities like Las Vegas, Portland or Nashville. Second, you’re not squeezing into a dorm-for-adults where the building mom — er, building manager — keeps the laundry detergent stocked. Third, you’re not moving in with your parents, like one-in-three Bay Area millennials these days.

How much does it cost to rent in San Francisco?

Median rent in San Francisco rose to $3,490 for a one-bedroom apartment, up 3.6% from a year ago, according to apartment listing site Zumper. In iconic Pacific Heights, with its Victorian mansions and stunning views, one-bedroom units go for $3,695. In fashionable Hayes Valley, hip young professionals pay $4,025 for pads near the boutiques and restaurants. Renters insurance is San Francisco costs between $7 and $17 a month. (We’ve got a roundup of the best renters insurance companies in San Francisco here.)

Per Zillow, renters in San Francisco spend nearly 40% of income on rent. That’s slightly lower than the 47% of income renters pay in Los Angeles, where median rents are actually lower, but still well above the 30% most experts suggest you spend on housing.

Why are the rents in San Francisco so high?

San Francisco has a severe housing shortage that is driving many residents to seek extreme solutions. Generous tech wages draw hordes of workers to the Bay Area, but high costs soon drive many away.

Nearly half — 46% — of Bay Area residents plan to move from the area soon, according to a survey from Bay Area Council, a business-sponsored advocacy group. Their top reasons: expensive cost of living and rising housing costs. (Case in point: Even with rents climbing toward $4,000, it’s still more prudent to rent vs. buy in San Francisco.)

The city’s post-recession boom created this housing crisis.

“From 2010 to 2015, San Francisco created eight jobs for every home we built…and rents have skyrocketed as a result,” the city’s mayor-elect, London Breed, wrote in a essay on Medium.

How to find affordable rent in San Francisco

Keeping in mind that affordability is relative when it comes to the Bay Area (even New York City has areas where you can find studios for under $2,000), here are some neighborhoods in the area to search if you’re looking for cheaper digs.

1. Western Addition

Adjacent to Pacific Heights and Hayes Valley, Western Addition is an ethnically- and economically-diverse neighborhood that includes the small sub-neighborhood of NoPa (North of the Panhandle). There are no convenient train stations, but you can get around easily on a bike or use the multiple MUNI bus lines connecting the neighborhood to employment nodes in the Financial District, SoMa and Mission Bay.

“The western part of the city has smaller, older buildings and is less connected via public transportation than other sub-markets in the city, which keeps rents more affordable,” Katerina Cheok, market analyst at Costar Group, the parent company of Apartments.com, says.

Median rent is $3,300, though a recent online search turned up a bright NoPa one-bedroom — with hardwood floors and a decorative fireplace — listed for $3,095 with parking available for an extra $250 a month.

“Renters can get the nice amenities — shopping, trendy restaurants and bars — available in the neighboring areas, with more affordability,” Crystal Chen, a spokesperson for Zumper, says.

2. Inner Sunset

Another affordable option is the neighborhood of Inner Sunset, just three miles from the Pacific Ocean.

“It used to be like the suburbs of the city, quiet and family-oriented. But within the past few years, a lot of new restaurants and shops have been popping up in the area,” Chen says.

Young professionals looking for a laid-back neighborhood with a small-town feel have been moving there in droves. Though Inner Sunset is on the outskirts of the San Francisco, it’s easily accessible to downtown by the MUNI trains.

It’s important to note that Inner Sunset sits within the fog zone, which means mornings and evenings tend to be foggy year round. The median rent is $2,700 for a one-bedroom.

3. Downtown Oakland

About 20 minutes from downtown San Francisco via BART, Oakland has a variety of relatively affordable alternatives.

Rents in Downtown Oakland are currently hovering around $2,170, per Zumper. With many new residential projects under construction, it’s expected that 5,700 new apartments will be added in the next few years.

“These units will be close to, if not the same quality, as new units in South of Market and Mission Bay — but at much more affordable rates,” says Cheok.

4. North Oakland

North Oakland is one of the most rapidly gentrifying neighborhoods in the U.S — even inspiring a web series, “The North Pole,” that explores the changing racial and class dynamics when new residents and trendy businesses settle in a neighborhood.

North Oakland is next to downtown Oakland and also bordered by Berkeley, Emeryville and Piedmont. Renters can expect to pay $2,600 for a one-bedroom apartment, per Zumper.

5. Jack London

South of Interstate 880, the Jack London neighborhood is right on Oakland’s waterfront in a former warehouse and industrial zone. Also known as the Loft District, the area has been transformed by the arrival of live jazz bars and salsa dancing clubs. One-bedroom apartments in the neighborhood go for $2,750, according to Zumper.

6. Bonus tip: Moving in the off-season can pay off

In a quirk of the San Francisco rental market, new apartment buildings with many units to fill tend to offer some type of financial incentive to renters during the slow months. If you’re able take a lease that starts in the late fall or winter, when fewer people are moving, you may be able to bargain for a month or two of free rent or at least free parking, Chen says.

We can’t curb burgeoning rents in big cities, but we can help you save on coverage for your stuff. You can quickly compare renters insurance quotes here.


This article originally appeared on Policygenius.com

 

How To Spend $100 On Back-To-School This Year

The average parent will spend around $500 per child of their hard-earned money on back-to-school supplies.

For many parents, this price-tag seems daunting. But here’s the good news: you can still get your kids the school supplies they need without spending anywhere near $500. In fact, with careful planning, you can spend $100 (or less) on back-to-school necessities this year. Take a look at our 5 tips below and start saving money right now.

1. Shop Your Home

Before you even set foot inside a store, take inventory of what you have at home. Do you have binders that are in good shape? Do you have boxes of crayons, markers, or pencils that your child can use instead of new ones? Shop your home first by seeing what supplies you already have available. Then, cross off the items, gather them together, and make a list of all the remaining school supplies that you still need to buy.

2. Buy Only What’s Needed

If you’ve received a list from your school district stating what you need to buy for your child this year, only buy the items on the list. And, unless the list states a specific brand or size, choose the cheapest option available. As long as the particular item will serve its purpose and get your child through the school year, there’s no need to pay extra for the brand name. For example, in the Midwest, Crayola Crayons cost about $4.98 for a pack of 24 crayons. Yet, store brands from Target or Walmart only cost $2.98 for the same 24-pack.

Remember, you only have a $100 budget. If you want to make sure you don’t go over that amount and you’re only buying what you absolutely need, go shopping with only $100 in your checking account (you can always move money to your savings account and then back to your checking account later.). While some banks may charge you for dipping below a certain amount, in your checking account, you can always switch to a no fee bank to avoid that.

If your child needs more crayons (or any other school supplies) throughout the year, purchase them when the time comes. And remember: if you purchase extra items that aren’t on the list provided by your school, they may sit around your house all year. Wasted money.

3. Buy Online

Along with only buying what you need, you can receive significant savings on back-to-school supplies by shopping online. Not only does this save you time, but different stores will typically offer online only deals on school supplies.

Popular stores like Staples, Walmart, Target, and even Amazon will send out emails about back-to-school deals. If you haven’t signed up for these email lists, now is a great time to do this. This way you can get deals delivered right to your email in-box.

Another great reason to shop online for back-to-school supplies is that you’ll often qualify for free shipping straight to your home, or even to your local store if you’d rather pick up there. The items you find and pay for online are still eligible for returns, so there is no risk to you if you choose to shop online for back-to-school supplies. Instead, it’s just another way to save money, time and energy.

4. Use Coupons

If you have to buy brand name items, or if you want to save even more money, coupons, price matching deals, and savings found on apps can shave even more dollars off your back-to-school shopping bill. Almost all major retailers offer price matching, so if you find a product cheaper somewhere else, you can alert the store you’re purchasing from and they will match the price. The major retailers want your business, so don’t be shy. Take advantage of price matching to get the best deal for you.

If you decide to use coupons, remember to read and understand the store’s policy on how you can use your coupons. Each store is different, and it’s better to know the policy up front so you aren’t wasting time later. For example, some stores will not accept a store coupon on top of a manufacturer’s coupon. So, if you have a store coupon and manufacturer coupon for the same item, you may only be able to use one. The bottom line: read the policy, get your coupons in order, and make sure you have everything squared away before using them.

Even if you don’t use price matching or coupons, you can still save money or earn money back through your purchases. Apps and websites such as Ebates, Ibotta, and Checkout 51 all give you cash back for purchasing certain items or shopping at particular retailers. All you have to do is submit your receipt and the cash back or savings is then added to your account.

Also, if you use your Chime Visa® Debit Card, your purchases will round up with each transaction, thus adding more money into your savings account without having to think about it..

5. Check Out Discount Stores

Last but not least, don’t be afraid to check out discount stores or thrift stores. These stores aren’t just for cheap clothing or household items. You can find a plethora of back-to-school supplies for $1 or less. Plus, if your local thrift store offers discount days or extra coupons, you can use those to save even more.

If you decide to shop at a discount store, it’s important to remember that you may not find name brand items. However, if that’s not important to you, a discount store like the Dollar Tree can help you spend just one dollar or less on each item you buy. In other words, if you buy 40 items you may get away with spending only $40, which is well under your new $100 budget for back-to-school supplies.

Don’t Bust Your Back-To-School Budget

While the average parent may spend $500 on back-to-school supplies, you don’t have to spend anywhere close to this much money. It is possible to stick to a $100 budget for your child’s school supplies. All it takes is a little planning and willingness to shop around for the best deals.

 

How to Negotiate Your Way to a Better Budget

Ever wish you could pay less for a car or a couch? Make more money? Negotiation skills can help.

The ability to negotiate is a powerful personal finance tool. We talked to experts to learn the basic skills that can help your budget.

1. Ask questions

“Information in a negotiation is power,” said George Siedel, professor of business administration at the University of Michigan.

You can negotiate better when you know what the other side wants. If you can learn the interests of the person on the other side and match them with your own, you can get to a deal that benefits both sides, Siedel said.

2. Have alternatives

“If you have good alternatives you are in a much more powerful position in a negotiation,” Siedel said.

If you’re negotiating for a raise and another company has offered you a job at a higher salary, you can push harder because you have a good alternative if the negotiation fails, Siedel said. Or if you’re buying or selling a car, having options gives you more power to walk away from any single negotiation. Even if you’re set on a particular car, having an alternative can help get you a better price on your first option.

3. Make an offer

You may have an ideal price in mind when you’re buying a car. But don’t start there when negotiating, Siedel said. If you want the car for $10,000, say you’d like to buy it for $7,000 and see where the negotiation takes you. You may end up paying less than you expect.

Deals tend to be anchored around the opening offer, said John Lowry, president of the Lowry Group, a negotiation training firm. In a situation where there isn’t a set price, like work on your home or car purchase, it can be a good idea to throw out a price to see if someone will accept it.

When would you use these skills?

Negotiation and haggling aren’t huge part of our culture, Lowry said. But it never hurts for consumers to ask if they can get something for less.

“The question is not ‘Where can you use negotiation,’ the better question is, if you’re not negotiating, then why aren’t you in all aspects of your life?” Lowry said.

For example, Lowry teaches negotiation at the Pepperdine University School of Law. Many parents and students call the school and haggle over how much scholarship money they receive or how much tuition the school charges. Any in-home services like contractors, repairmen or cleaners are also subject to negotiation.

Negotiating may be harder in a retail environment, Lowry said. The person checking you out at Target probably lacks the authority to lower prices for you. But if you’re spending $10,000 at a furniture store, you can push the sales staff on prices.

Siedel teaches negotiation both at the University of Michigan and through an online Coursera course. Many students tell him they have found success renegotiating their cable bills by getting alternative prices from other cable providers. (The same strategy is particularly effective when you’re trying to get a better deal on car insurance.)

He also asks students to try to negotiate a discount at a restaurant as part of his course. The majority are successful.

“With about 40 students in the class, they usually save a couple thousand dollars in total,” Siedel said.

Success can depend on how comfortable people are with negotiating. While many students get a discount, half of them find the experience terrifying, Siedel said. Siedel will often negotiate for a discount when staying at a hotel, but his wife refuses to accompany him to the front desk.

What should you avoid when negotiating?

Don’t do all the talking. You can’t argue your way into a good deal. You have to find out what the other side wants and reach a compromise.

Don’t go into a negotiation unprepared. Without good alternatives and an idea of your goal, your negotiation is less likely to be successful, Siedel said.

Don’t waste your time. A discount is great, but if it’s going to take forever to get to a deal, it may not be worth it.

“If you’re having fun with it, there’s nothing wrong with that, but if there are other things you’d rather be doing, don’t become obsessed with saving a few dollars,” Siedel said.

Don’t lie. Exaggerating is one thing, but it can be dangerous to slip into committing fraud, Lowry said. Not only could you face legal ramifications, but misleading people is simply unethical.

How do you get better at negotiating?

The best way to improve is by doing it, even if you fail, Lowry said. Failure might be lead to some temporary embarrassment, but success can have a big impact on your budget. Plus, you may get more enjoyment around everyday transactions.

“If people do it, what they will find is that if they intellectually engage in the process, they’ll find what is typically mundane becomes kind of fun,” Lowry said.

Are you one of those people who hates haggling? You can outsource negotiating your bills to one of these four apps instead.

 

Biggest Financial Regrets Across America

For three years in a row, American adults have the same top financial regret. A May 2018 survey from Bankrate looks at the top financial regrets among Americans and how they deal with those financial regrets. By looking at the most common regrets, we know where we can best focus our future efforts on our investments, bank accounts, and beyond.

The top financial regrets of Americans

The number one financial regret among Americans is not saving for retirement early enough. This financial regret claims the top spot for the third year in a row in Bankrate’s annual Financial Security Index survey. This answer was number one for 18% of respondents.

Number two on the list is not saving enough for emergency expenses, with 14% of respondents most regretful about this. For workers in any profession, an emergency fund is an important part of maintaining financial stability. For freelancers and entrepreneurs, it is best to save at least six to 12 months of expenses in emergency savings.

The third most common regret is taking on too much credit card debt, with 10% of responses marking this as number one. This is no surprise, as Americans have over $1 trillion in credit card debt. The average household holds $8,600 in credit card debt.

Number four on the list is taking on too much student loan debt, a top regret for 8% of respondents. Americans have nearly $1.5 trillion in student loan debt. 44.2 million Americans have student loans, according to Student Loan Hero data.

The fifth most common financial regret is not saving enough for a child’s education, coming in with 7%. Both number four and five on this list share a commonality: they relate to a high cost of college. Number one and number five also have a big common trait: they both involve savings. These two topics are an important part of Americans’ biggest financial struggles.

Last on the top financial regrets list is buying more house than you can afford, with two percent of respondents choosing this answer. Like college, housing costs generally go up, up, up over time. In some areas, buying even a modest home takes up a huge portion of take-home pay.

Here is the full results care of Bankrate:

Biggest financial regrets
via Bankrate

How Americans respond to financial regrets

The list of common financial regrets does not yield many surprises to those who follow economic news, but how people respond to their biggest regrets is a bit more interesting. A full 25% have no plans to deal with their biggest financial regret and continue to go on living with it.

Dealing with financial regrets
via Bankrate

A nice relief, however, comes from the 49% who are already working on addressing their biggest financial regret. Whether it is debt, savings, or something else, a good budget and focus on finances can help overcome most money challenges.

While better than the quarter of Americans with no plans to address financial regrets, 19% plan to start work on their money problems within a year while six percent plan to do so later on in the future.

Only with a long-term focus on your finances can you rise above the statistics and go forward with no money regrets. While most of us would want to be wealthy someday, it takes a real effort to turn that dream into a reality.

Avoiding the biggest financial regrets

The best way to avoid many common financial regrets is simple: avoid going into debt. While it may not seem like a big deal swiping a credit card for a TV or choosing the expensive out-of-state school, credit card debt and student loan debt payments are a very real.

The next major focus to avoid a big regret is to save. Start with even $1 per week. No amount is too small. You can always increase it later. But if you don’t start saving, you will never build up savings to pay for a home, education, or retirement.

Thanks to the time value of money, the sooner you save, the better. Compound interest and compound investment values help your money grow over time. If your money has more time to grow, the impact of that growth is exponentially helpful.

Live a life free of financial regrets

Recovering from financial regrets is very difficult. Rather than turn around a difficult situation, avoid it from the start. That is one of the best paths to lifestyle satisfaction and a life free of financial strain and worry.


This article originally appeared on Due.com.

 

Over 60% of Americans Don’t Know What They Need to Retire

A recent study found that 61% of Americans don’t know how much money they need to retire. This concerning statistic highlights a major problem with retirement savings in the United States. A huge number of Americans have little to no retirement savings despite advice to stash away cash for a comfortable future. Let’s look at some important retirement savings rules to make sure you are not part of this scary statistic.

Americans don’t know how much money they need for retirement

A new study from Bankrate found that six in ten Americans do not know how much money they need to retire. With a large wave of Baby Boomers reaching their golden years and preparing to leave the workforce, millions of Americans may be in for a big surprise when the regular paychecks stop flowing in.

While Social Security or an increasingly rare pension plan can offer a safety net to aging Americans, most of us need much more than we will get from the government to maintain the same standard of living in retirement.

The study went beyond asking what people need to retire. Older Americans fared slightly better than Millennials in the survey and fewer than 2 in 5 non-retirees indicated that they feel their retirement savings are not on track.

Using the 15% rule to save for retirement

To avoid a ramen diet in retirement, you should follow best practices for retirement savings today. That may include contributing the maximum allowed amount to an IRA or Roth IRA in addition to participating in an employer-sponsored retirement plan like a 401(k).

One quick and easy option to meet your retirement needs is to save at minimum 10% to 15% of your gross income (that’s your income before taxes and deductions). This is easy to do automatically in most employer retirement plans.

To reach the maximum $5,500 per year in an Individual Retirement Account (IRA) or Roth IRA, you should save $211 per pay period if paid every other week to reach the target savings rate at the end of each calendar year.

If you make $50,000 per year, that means you should save $7,500 per year, or $625 per month, at the very least to maintain the same quality of life in retirement. But remember that this is just a minimum. You can save far more for retirement if you choose!

Calculate your actual retirement needs

While saving 15% or more for retirement is a good estimate on how much to save, you should do better and estimate your actual financial need in retirement. This is a tricky thing to calculate with a ton of accuracy, as you have to estimate your retirement date, how long you will live, and how much you need per month to get your total number.

Lucky for you, a Ph.D. is not necessary to calculate your retirement need. There are a handful of useful tools that make it easy and quick to estimate your financial requirements for retirement.

This in-depth calculator from AARP gives you detailed results on your retirement readiness. The Kiplinger calculator gives you a quicker result in estimating your retirement needs, but with a little less detail.

You control your retirement destiny

If you are behind on saving for retirement, there is no one to blame but yourself. But don’t dwell on the past and savings that have yet to take place. Instead, focus on the future and boosting your retirement savings starting today. That is the only way you will get on track to reach your retirement goals.

It may seem like a long way off, but your retirement is just around the corner in the scheme of things. Take the steps you need now so you don’t end up in a difficult situation in retirement. Many older Americans find themselves stuck working in retirement or skimping at home to make ends meet. Even if you can’t start by saving a full 15% of your income, you can start with something. Some retirement savings apps let you start with as little as $1 or $5!

Start saving and get yourself on track for your dream retirement. Your future self will thank you.


This article originally appeared on Due.com.

 

How to Determine the Budget for Your House

Saving up for a down payment on a house is one of the most important things you can do before starting your house hunt. But even a 20% down payment won’t help you much if your monthly payments on a new house stretch your budget too thin.

This is what is often referred to as house poor and it’s a wise idea to avoid this. So, how do you really know how much house you can comfortably afford to buy? You can start by estimating all of your eventual monthly housing costs, including your mortgage, insurance, taxes, repairs and more.

Read on to learn about the costs involved in buying a house. From there you can best determine what you’ll actually be spending every month.

Principal and interest

This is the basic monthly cost of your mortgage loan, which you pay directly to the lender. This includes your monthly principal as well as any interest that you pay on the life of your loan.

Keep in mind that if you’re making a down payment or have closing costs, the loan amount will be different than the sales price of the home. As an example, let’s say you have your eye on a home with a sales price of $250,000 and can afford a $25,000 down payment.

The closing costs, which are fees and expenses you pay to complete the sale of the home, will be three percent of the sales price or $7,500. You’ll be expected to pay this amount when you close on the sale of your house.

Getting back to the actual mortgage, in this scenario your total loan amount is $225,000. Let’s say you choose a 30-year fixed-rate mortgage with a 4.5% interest rate. Using a simple loan calculator, your monthly principal and interest payment would be $1,140.04.

Mortgage insurance

Depending on the type of loan you apply for and the size of your down payment, you may be required to pay mortgage insurance. The beneficiary of the insurance policy is the mortgage lender and this coverage protects the lender if you default on your loan.

To give you an idea of what to expect, here’s how much mortgage insurance typically costs by loan type and your loan-to-value ratio, which is calculated by taking your total loan amount and dividing it by the value of the home.

 

Loan type Loan to value Mortgage insurance cost
Conventional loan 0% to 19.99% $30 to $70 per month for every $100,000 borrowed
FHA loan All loans Upfront cost at closing of 1.75%; annual cost of 0.45% to 1.05%
USDA loan All loans Upfront cost at closing of 1%; annual cost of 0.35%
VA loan All loans Upfront cost of 1.25% to 3.3%; no annual cost

So, let’s take our previous example to calculate your monthly mortgage insurance costs. You opt for a conventional mortgage, and your loan-to-value ratio is 90%, so you’ll need to pay what’s called private mortgage insurance (PMI). The lender’s insurance company charges $50 per $100,000 borrowed. So, with a $225,000 loan, your monthly PMI bill would be $112.50. This premium will be added to your monthly mortgage payment.

With conventional loans, your PMI requirement will “fall off” your loan automatically once your loan-to-value ratio reaches 78%. That said, you can request to have it removed once your loan to value is 80%.

Homeowners insurance

Once you buy a house, it will likely be the most valuable asset you’ve ever had. As such, you’ll want to insure it against damage, loss and other hazards.

In addition, if you have a mortgage, the lender will require an adequate homeowners insurance policy because it technically owns the property until you pay off the loan. Homeowners insurance costs can vary depending on where you live and other factors. But the average annual premium in the U.S. is $1,083 or $90.25 per month.

Depending on your mortgage lender and situation, you will either pay this directly to the insurance company or to the mortgage company into an escrow account. In an escrow account, your lender collects your monthly insurance premiums and then pays for the insurance on your behalf. By tacking your homeowners insurance premium onto your monthly mortgage payment, it ensures that you don’t accidentally miss a payment and lose your coverage.

Property taxes

State and local government agencies collect property taxes every year based on the value of your home and the property upon which it stands.

Property tax rates not only depend on the state where you live but also your county, township or school district. So, let’s say you live in Arizona, where the average property tax rate is 0.77%. With a home value of $250,000, your property tax bill would be $1,925 annually or $160.42 per month.

Maintenance and repairs

Whether your home is brand new or 100 years old, you can expect to pay for regular maintenance and unexpected repairs. The worst part about this is that there’s no way to know for sure how much these expenses will cost.

For this reason, it’s wise to have an emergency fund with enough money in reserves. Consider opening a separate bank account to keep the money away from your everyday spending. As for how much you should have saved up, experts recommend that you save between one to three percent of the home’s purchase price. If you split the difference and save two percent on a home worth $250,000, that’s $5,000 a year or $416.67 per month.

Calculating your monthly payment

Once you determine the budget for your new home, you’ll have an idea of whether or not you can afford the house you’ve got your eye on.

For that $250,000 home, here’s how the costs add up:

  • Principal and interest: $1,140.04
  • Mortgage insurance: $112.50
  • Homeowners insurance: $90.25
  • Property taxes: $160.42
  • Maintenance and repairs: $416.67

All told, the total monthly budget to afford that house is $1,919.88 — or $1,503.21 if you already have the $400 plus a month saved up in your emergency fund.

So, take a look at your budget before you decide whether you can comfortably afford to buy a particular house – without becoming house poor. If you discover that it’s just too expensive, no worries. You can either keep looking for another other house that fits your budget or continue to save more money for a bigger down payment.

 

Grocery Hacks: 7 Ways to Save Money at a Farmers Market

Farmers markets have a reputation for being expensive. A lot of the items for sale are typically organic and local, meaning vendors can demand a premium for them. But there are some tricks to saving a bit of money at farmers markets, just like there are tricks for saving money at a grocery store. Here are seven things you can try next weekend.

1. Go late

Heading to the farmers market early in the morning will get you the best pick of everything the vendors have to offer, just like an early trip to the grocery store. But unlike the grocery store, if you wait until an hour or so before the market closes, you have a better chance of getting some good deals on the produce and other items the vendors don’t want to pack up and take home. If they don’t offer you a discount, hold off, circle the stalls and try again just before they pack up. You can often cut your costs in half.

2. Ask for discounts

If it’s getting close to the time they pack up and they haven’t offered you a discounted price, go ahead and make them a lower offer. If the tomatoes are marked as $4, it’s easy to say “I’ll take those off your hands for $2.50 so you don’t have to pack them up.” You’re not exactly asking for a discount, and chances are they’ll take your offer or counter it.

3. Get to know the vendors

Going to the market late also gives you a chance to chat a little more with the vendors since most people have already come and gone. Ask about their operations, what if any special products they’ll have in the coming weeks. The more often you visit (and the better they recognize you) the better your chances for scoring a discount or some little extras. Also be sure to ask whether they allow visitors at the farm (or where they produce their candles, jams, etc.).

4. Visit the farms

If they do allow visits, take some time to go on a tour. It can be a fun family outing, especially if you take a picnic (or if they offer foods at the farm) and make a day of it. Be sure to mention you found them at your local market and name the person you spoke with there. It’s all about making a personal connection that could lead to specials, discounts and even freebies. (Speaking of which, we’ve rounded up some of the best summer freebies here.)

5. Buy the ‘ugly’ food

Are the greens wilted from sitting in the summer heat? See if you can talk the vendor down. Are the peaches a little beat up? Ditto. Gravitate toward produce you’ll need to use that day and see if you can get it for cheaper than it’s marked.

6. Avoid the extras

Sure, there are tempting nibbly bits and drinks at the farmers market. Sometimes there are even lovely handmade products, but these artisanal items tend to come at a greater cost than you can find elsewhere. And you can bring your own snacks and a water bottle if you think you’ll get hungry and thirsty. Stick to the fresh food items if you’re serious about saving money.

7. Take cash

Farmers markets vendors are more and more likely to accept credit cards these days, thanks to the mobile technology that makes it easy for them, but it still costs them to do so and they may pass that cost on to you. Take cash and be sure and ask if there’s a discount for paying with it. They may not offer the small price drop if you don’t ask.

If organic and artisanal foods are your fav — but hard on your budget — we’ve got some hacks for saving at Whole Foods, post-Amazon acquisition editionhere.


This article originally appeared on Policygenius.com.

 

How to Avoid Regrets About How You Spend Your Money

How you spend your money is a loaded subject. Nearly half of Americans deem finances a hard subject to address with others. They rate it more difficult to navigate than politics or religion. Sixty-eight percentwould rather disclose their weight than talk about finances. More than 40 percent don’t even broach the subject with the person they marry before entering into holy matrimony. Even to yourself, how y0u spend your money is a topic you most likely avoid thinking about.

However, treating money as a taboo subject hurts people. Families tend to feel chronically anxious due to a lack of clear conversations about money. Many times, with little discussion about goals and expectations, people end up following some financial gurus’ guidelines to the letter. This can actually be damaging to their personal finances. Plus, it can make them feel like “financial sinners” for making different choices. That”s why it’s time to think differently about how you spend your money.

Rules About How You Spend Your Money Can Lead to Regret

James Lenhoff, CFP, the president of Wealthquest and the author of “Living a Rich Life,” has seen dozens of clients who’ve accumulated a lot of money in their later years — and a lot of regrets. “Many of them get to a stage where they realize they didn’t create many memories with their money,” Lenhoff says. “They’re watching their kids have families and regretting all the things they didn’t do — they’re seeing the breaks or weaknesses in the logic.”

These clients often see their own kids are reluctant to take vacation time or splurge on a family excursion, yet many of these behaviors have been “inherited.” However, it’s hard to lay all the blame at their feet in a society that champions short-term “good” feelings over long-term satisfaction. “Society reinforces this mistake of thinking that status symbols and things are worth more, encouraging us to buy the bigger house, the newer car. The messaging is all geared toward making us feel better about ourselves,” Lenhoff explains. “In the end, we all want experiences, but society has confused us into thinking products areexperiences.”

In order to combat that messaging, most personal finance books give us rules to follow that keep us from splurging. But, it’s a Catch-22 because the money “rules” teaches us to grit our teeth and “do the right thing.” This is always assumed to mean saving more. “There’s an assumption among some financial experts that we need to treat people like children, give them harsh black-and-white boundaries,” Lenhoff says. “Like kids, they develop a sense of shame for disappointing Mom and Dad. The behavior is so deeply ingrained that even when they have saved enough, they are paralyzed by the ‘rules,’ and they can’t let go and use some of their money to enjoy themselves.”

Forces That Impact How You Spend Your Money

These two forces are always fighting within us. That means many people end up being filled with money-driven regret for one of two reasons. First, they spent their money on products, which didn’t fulfill them. Second, they hoarded their money, waiting for the right time to spend it.

However, they could never relax enough to do so when it was time. The good news is that those outcomes aren’t inevitable. There are steps you can take to avoid financial regret.

As Lenhoff says, “Nobody lived beyond their means because they couldn’t do math; they were emotionally motivated to do something.” He recommends that younger savers and spenders approach their relationship to money in a way that may be antithetical to the “rules.”

Find out where you stand

Because of the taboos surrounding money discussions, most people don’t actually know where they fall on the financial spectrum. Are they in a healthy position or not? Many couples, Lenhoff explains, contain a “Go” and a “Whoa”: The “Whoa” is the self-controlled saver, while the “Go” is the free-spirited spender. “Go” assumes they’re fine, but “Whoa” assumes they’re not. The problem is that neither one really knows who is right.

To overcome this, you must have a clear-headed conversation to lay out what you have and where you’re going. What does it take to make your life work right now? And, what are your non-negotiable goals for your family? A financial planner can help you outline how far ahead or behind you are on hitting those targets. Then, once you’re confident that you’re saving what you need to save each month to fund your goals, you can spend the rest as you like.

Don’t be fooled by others’ exteriors

In a world where we’re constantly cajoled to keep up with the Joneses, people often look around and feel their neighbors, friends, and family members are doing better.

But, the secrecy surrounding money — and the prevalence of living on credit cards — has erroneously led us to assume others are killing it. In reality, they could simply be swimming in debt. Don’t make decisions on how you spend your money based on how well you believe others are doing.

Use your net worth as your golden rule

Many people are overly focused on their income as a measure of progress. However, your income doesn’t matter if you aren’t using it to grow your net worth. If your net worth didn’t go up last year, that’s a problem no matter how much income you had. Your net worth changes only through saving or paying down debt.

You should be doing both. Don’t focus so much on paying down low-cost debt that you miss opportunities to save for future goals. Make sure you’re using your income to grow your assets over time. A growing net worth is the clearest indication of financial health.

Avoid budgets

Budgets are very restrictive, and they start from made-up numbers. Lenhoff says, “Most people approach budgets with ‘What can I squeeze myself into?’ They should start with ‘What’s my current reality?’” Just because you could eat freeze-dried Ramen for six months doesn’t mean it’s likely you will.

And, a shoestring budget that’s a far cry from your usual existence will feel overly prohibitive. Also, it’s impossible to stick to. Instead, create a spending plan that focuses on how you’ll spend your money rather than on how you’ll avoid spending your money. Acknowledge that you will be spending money so you can plan to spend it wisely.

Think not just about how the money will serve you in the future

There’s truth in the saying, “You can’t take it with you.” Therefore, you need to celebrate milestones along the route to your biggest goals. Enjoying the money you’ve earned while meeting your financial obligations and saving for your long-term goals shouldn’t be considered taboo but smart. It’s giving you pleasure now and later. This is what money that exceeds your necessities is intended to do.

While money may often be treated like a dirty secret, it doesn’t have to be a source of pain and regret. By shifting your mindset about how you spend your money now, you can ensure you use it in a way that brings you peace today and security tomorrow.


This article originally appeared on Due.com.

 

5 Things I Wish I Had Known Before Buying My First House

When my wife and I bought our first home in September 2017, we made our fair share of mistakes. In hindsight, we should have done some things differently.

The good news: I won’t make the same mistakes again and am grateful that we did make the right choices in some instances. To help you learn from my mistakes as well as my smart money moves, here are 5 things I wish I had known before I started house hunting.

1. A mortgage broker won’t necessarily get you the lowest rate

A mortgage broker acts as a middleman between you and lenders. These brokers compare loan deals with several lenders to find you the best package. They charge a small fee for their efforts.

Since we were new to the game and didn’t feel comfortable doing everything on our own, we found a mortgage broker. He came highly recommended, and we were excited to work with him. Yet, when we were under contract for a house, I wasn’t impressed by the interest rate the broker was offering from one lender. I figured that this was a result of our low down payment —  just three percent at the time.

But when that deal fell through, we decided to build a house and had time to build up a 10% down payment in our savings account. Even better: the home builder told us that if we got our mortgage through one of their partner lenders, the builder would pay our closing costs. When we told our broker about the offer, he told us that was a common tactic by home builders and that we’d end up with a higher interest rate.

Not the case. In fact, the builder’s partner lender offered us a better interest rate than the broker. We gave the broker an opportunity to match or beat the rate, but he was unable to do so.

The bottom line: a mortgage broker won’t always get you the best interest rate. Do your research and explore all options before settling upon a mortgage.

2. Your emotions can work against your best interests

Once we signed an initial contract on the first home we fell in love with, we hired a home inspector to see if there were any major problems with the house.

The results of the inspection were overwhelming:

  • We would need to replace half of the roof.
  • We needed a new water heater.
  • The water pipes were cracking and the entire system needed to be replaced.
  • There was water damage in one of the bedrooms from a window leak.

To fix all of the issues, we were looking at $20,000 out of pocket, and the seller offered just $500. Yet, I loved the house and I wanted to make the repairs. I had to step back and detach emotionally. From that point, I realized this house was looking like a money pit.

The bottom line: don’t let your emotions rule as you may end up regretting your choice. Luckily, we got out before it was too late.

3. Your monthly payment is a lot more than your mortgage

Your monthly housing payment is a lot higher than your mortgage payment alone. Here are the main elements of a monthly housing payment:

  • Principal and interest: This amount goes toward paying off the mortgage loan.
  • Private mortgage insurance: You will pay this if your down payment is less than 20% on a conventional loan. You can, however, request to have it removed once your loan amount is 80% of the value of the house.
  • Homeowners insurance: This coverage protects you against damage and theft. We pay monthly into an escrow account, and the lender makes our premium payment for us annually.
  • Property taxes: These are due annually, but your lender may require you to pay a monthly portion into an escrow account.
  • Maintenance and repairs: Our home is only nine months old, and we’ve already spent money out of pocket for maintenance and repairs. To avoid any nasty surprises, real estate experts recommend saving between one percent and three percent of the home’s value each year. This way, you’ll be able to pay for those unexpected home repairs. .

When we received the final disclosure that broke down our monthly payment, it was higher than I anticipated. Yet, if we knew what the house would cost us each month from the beginning, we may have lowered our house budget even more to make more room for other things in our budget.

The bottom line: make sure you factor in the total monthly cost of owning that house. This will give you a true sense of what you can afford.

4. Your first home is never going to be perfect

After months of checking out existing homes, my wife and I were disappointed that we couldn’t find one without problems. Ultimately, we decided to build a new home.

Brand new homes, however, are not perfect and you may still have to pay for repairs or deal with issues – even in your first year in the house. For example, the insulation subcontractor didn’t blow any insulation above my kids’ rooms in the attic, and the builder made some major blunders with the landscaping that took months to fix.

Because we thought we were avoiding all of these problems by building a home from scratch, it’s been a frustrating experience.

The bottom line: be realistic and save your pennies. No house is problem-free.

5. Get everything in writing

During the building process, the construction manager for our home promised us some things that he didn’t deliver on. When we tried to get the builder to make good on the promises, he refused.

The bottom line: get everything in writing, even minor things. This will help keep the builder, seller and others accountable. After all, buying your first home is likely the biggest financial decision you’ll ever make, so take as much control of the process as you can.

The final word

While we made some mistakes buying our first home, we also learned from our experience.

When it comes time for you to buy a house, make sure you take the time to set realistic expectations and budget wisely. This will help you enjoy your new home without second-guessing yourself at every turn.

 

Behavioral Hacks and the Gig Economy: 4 Tactics for Financial Wellness

When it comes to finances, freelancers and other gig economy workers have it tough. Not only do we struggle with unpredictable cash flow, but we also have to deal with our own benefits and insurance.

Yet, while it may be stressful at times, there are things you can do to modify your money habits and boost your financial wellness.

Behavioral science, or the study of why humans and animals do what they do, can help us better understand our behaviors and how they play into our money matters. Take a look at Common Cents. A financial research lab at Duke University, Common Cents conducts in-depth studies to help low- and moderate-income households in the U.S. achieve financial wellness. From their research, they’ve garnered some insights into behavioral science and financial health. For instance, you can use a money-saving app to meet your financial goals.

Here are 4 other ways you can change your behaviors to help you slay your money woes.

1. Label Your Savings Accounts

This may seem like a minor thing, but behavioral research reveals that simply labeling a savings account increased total deposits in Ghana by 31.2 percent – after only nine months.

Why not try this? Just coming up with simple labels for your savings accounts can help boost your savings. For example, I have labels for my specific accounts for self-employed taxes and emergency savings. I also have a gift fund, “fun” fund, art fund (to buy and make art stuff), retirement fund, and more recently, a house fund. This helps me stay motivated.

Here’s another tip: you can have fun with your labels to remind you of saving for things that matter to you. When I was younger, I used silly labels for my savings accounts, like ‘Buddha Statue Fund” and “Guinea Pig Fun House” fund. That bit of silliness made saving money more enjoyable.

2. Match Payment Dates with Paychecks

Research suggests that most people pay their bills when the paychecks roll in. Then, they spend the rest of their money right up until the next payday. Yet, this isn’t so easy when you’re a gig economy worker. Why? If you’re in this boat, you likely get paid different amounts at different times from various clients. (Cue #facepalm.)

To help you pay your rent and bills on time, try assigning paychecks to specific bills. For instance, you can earmark money from your biggest retainer client toward your rent, student debt and credit card bill. The smaller amounts that you receive at random times? This can go toward your savings and discretionary spending. Or, if you’re a Chime Member and enrolled in direct deposit, you can get paid up to two days early. Score!

If you’re a part-time gigger, use the money from your main 9-to-5 job toward rent and bills. And try putting the essentials on autopay. The Common Cents report found that millennials were about 10 percent more satisfied with recurring transactions than non-recurring ones.

3. Add Friction in the Right Places

From a consumer psychology standpoint, friction is anything that makes it harder for someone to spend money. That’s why retailers do all they can to make shopping – both in stores and online – as painless and quick as possible. To get you to spend more, retailers remove these points of friction. For instance, a point of friction while shopping in a store is having trouble locating an item. After scouring the aisles, you may get frustrated and leave without buying anything. So, retailers do all they can to make it easy for you to locate things and drop them in your shopping cart.

To make it hard for you to spend those hard-earned dollars, try adding in your own friction. Want to keep a healthy reserve for your emergency fund? Sock it away in a separate account. Out of sight, out of mind. And, if you’re wary about spending too much on happy hour and meals out, try setting aside a certain amount each week toward discretionary spending. Then, spend only this amount on your dining out.

4. Automate, Automate, Automate

While you should squirrel away some of your income, doing so can be mentally taxing. Add to that deciding how much to save and this can induce anxiety. Once you finally settle upon the amount to save, you’ll then have to figure out how to transfer money between accounts. We’ve all been there.

Auto-save to the rescue.

Automating your savings is one of the most painless ways to save money. Why? Well, for starters, the weight of decision-making doesn’t fall in your hands. And, because it’s all done automatically, you’re much more likely to actually save.

According to the 2017 Common Cents Lab Annual Report, automatic savings aren’t mentally accounted for as earnings. “Automatic withdrawal for savings has such a powerful effect that people can forget that the money was even earned. As a result, they don’t mentally account for this money as part of their paycheck,” stated the report. Plus, when the “opt-in” is the default, versus the “opt-out”, people tend to save more.

The bottom line: if you can automate your savings, you should do it. Even if you don’t have a lot of extra cash on hand, start with just a few bucks each week. Chances are that you won’t even miss it. I remember starting out by saving $20 every week. That’s five coffees or two lunches during the week. While I didn’t miss spending that dough on everyday expenditures, after a year I was $1,040 richer. That’s a thousand bucks I could use toward a fun vacay, getting a tech upgrade, or holiday spending.

Small Changes Lead to Big Wins

Indeed, insights from the eye-opening field of behavioral economics can help you boost your financial health. And, if you’re a freelancer working in the gig economy, you can start improving your own financial habits by adopting the 4 steps here. Before long, you’ll be hitting your money goals and bulking up your savings account!

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