Tag: Guides

 

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

 

We Asked College Aid Experts How to Pay for School

While it’s hard to deny the value of a college education, rising costs have made it harder for students to afford their degrees. Average tuition at public, four-year schools surged to $9,970 for the 2017-18 school year and those costs rise to $20,770 per year when you add room and board, according to the College Board. A private school or an advanced degree, will cost you even more.

With these figures in mind, it’s important to know you don’t have to follow the crowd when it comes to earning a degree. You can plot a different path by looking for ways to reduce the cost of admission or by attending a different school.

Many college aid professionals and counselors wish you would consider alternative options. When it comes to paying for college, here’s what the experts have to say.

Pricey schools don’t always pay off

Ben Luthi, college expert for Student Loan Hero, says you can get a quality education without paying a premium. To accomplish this goal, you may have to consider a different school than the one you want to attend.

“The name of your school might help you get your first job, but it likely won’t matter for the rest of your career,” he said. That’s why you should make sure you include more affordable schools in your college search.

“And if you’re already in school and you’re overwhelmed with the cost, consider transferring. I’ve worked with countless people who went to colleges that I’ve never heard of,” he said.

Joe Orsolini, who serves as president of College Aid Planners, says many students and parents get hung up on college rankings or where a school lands on a best-of list. As a result, they make poor decisions regarding their undergraduate education.

“The reality is that nobody cares where you got your undergraduate degree,” he said. “Do you know where your doctor earned their undergraduate degree?” Probably not.

Focus on your return on investment

Robert Farrington, founder of The College Investor, says too many people think of college as a time to find themselves without thinking of the long-term consequences of their student debt.

“Students need to think of college as an investment, and so they need to focus on the ROI of that investment,” he said. “Why are they going to college? What will it cost? What can they expect to make after graduation in their first job? Based on those answers, students can get a good glimpse of their potential ROI.”

When you focus on your return on investment and think of college as a business transaction, you can avoid borrowing too much to pursue a degree that won’t pay off. Farrington suggests making sure you never borrow more in student loans than you can earn in your first year after graduation.

“That will allow you to realize an ROI on your education and keep your student loan debt at a manageable level,” he said.

You can save if you don’t live on campus

Debbie Schwartz, founder of Road2College.com, says students who have the option to live off campus or at home should consider it (just remember you’ll need renters insurance if you live in an apartment).

“In many cases, room and board can be more expensive than tuition,” she said. If you can live with your parents or another family member or share an inexpensive apartment or house with other students, you can reduce the amount of cash you need to borrow for school.

Take the right courses in high school

Kathy Hart, a California-based scholarship consultant and college coach, says many students assume harder courses will help them get into college. Unfortunately, this isn’t always the case.

“Take classes in high school that allow you to be successful,” she said. In other words, don’t fall victim to the pressure of having to take Advanced Placement coursework if you know if you can’t earn an A. If you can’t, an AP class could hurt your chances of getting into the school you want.

Apply early for scholarships

Jocelyn Paonita Pearson, scholarship expert and founder of The Scholarship System, believes all students can secure scholarships. She also believes they should start searching for grants as early as sophomore or junior year in high school and apply for every scholarship for which they qualify.

“Despite the majority of stories we hear, there are many students out there that manage to graduate debt-free,” she said. The key to earning scholarships is taking the time to find them and applying, and unfortunately this can require a big investment of time and effort.

Pam Andrews, college admissions coach for The Scholarship Shark, says it’s important to think about other types of aid as well – including federal or state grants and merit scholarships. Merit aid can be especially lucrative if you have excellent grades.

“Know what the college offers in merit aid, how you can qualify for it and what it takes to maintain it,” she said. “It is also important to know the application deadlines to apply for merit aid. Sometimes those deadlines are before a college’s application for admissions deadlines.”

Never assume you won’t qualify for a scholarship. Andrews says it’s important to approach the scholarship system with an open mind and without any limiting beliefs.

“If you don’t feel like you can succeed then you’re less likely to act or even think about acting,” she said. “Having the right attitude towards winning scholarships is the first step because it then moves the student to take action.”

Tuition may keep rising, but some states and colleges have made tuition free. Here’s where.


This article originally appeared on Policygenius.com.

 

18 Ways to Earn Money Online This Summer

If you need extra cash to pay down debt or save money, there are plenty of ways to earn money online. From automating your bank account to selling your photos through an app, it’s possible to boost your cash flow without ever leaving your couch.

To help you find the best options available to earn more money, we’ve put together a list of 18 ways to boost your savings. Take a look:

1. Open a new bank account

Switching banks can sound like a daunting task. But many banks offer bonuses to people who sign up for an account, set up direct deposit and use their debit card. Some of these perks can add up to hundreds of dollars a year.

Chime’s Automatic Savings program, for example, connects your savings account to your debit card. Every time you use the card, Chime rounds up the transaction to the nearest dollar and transfers the round up amount directly into your savings account. Cha-ching!

2. Use a cash-back website

Sites like Topcashback, Ebates and Swagbucks offer cash back when you use their shopping portals to shop at your favorite retailers. Ebates and Swagbucks even have browser extensions that notify you if you’re eligible to score cash back on a site you’re visiting. Some stores offer upwards of 10% back.

3. Get rid of your stuff

Unless you’re a staunch minimalist, you likely have unused items lying around. Why not sell your stuff on sites and apps like Craigslist, OfferUp, eBay and Facebook Marketplace. Wouldn’t you rather get paid for those books you’ve already read?

4. Sell your photos

Are you an amateur or budding photographer? You may be happy to find out that you can actually turn your photos into cash. Foap is an app that allows you to get paid for the pictures you take on your phone.

Just upload your images, and if a brand, agency or individual wants to buy your photo, you’ll get paid five dollars through the app. There’s no limit to how many times you can license the same photo.

5. Lose weight

Shedding a few pounds isn’t always easy, but earning cash to do so can be an extra motivator. HealthyWage and DietBet are two websites that reward you for betting on yourself. If you achieve your goal, you get paid.

Here’s how it works. You track your weight throughout each challenge and work toward a specific goal. How much you earn typically depends on the type of challenge you choose, the amount you contribute to the pot at the beginning, and how many other people achieve their goals.

6. Go grocery shopping

Clipping coupons can be time-consuming. Why not use an app to save money on groceries instead?

Ibotta, for example, is a cash-back app that offers rebates on various items and products at your local grocery store. All you have to do is choose which products in the app to buy, then take a picture of your receipt after you’re done shopping.

7. Find unclaimed money

It may sound unbelievable, but it’s possible that you’re owed hundreds or even thousands of dollars. You may have refunds from various merchants, old savings accounts and other sources. You may have completely forgot that you even had these accounts in the first place.

The National Association of Unclaimed Property Administrators is an organization which maintains a database of unclaimed money for individuals in each state. To see if you’ve left money on the table somewhere, visit Unclaimed.org. Check your current state of residence as well as other places you’ve lived to make sure you don’t miss anything. If you find missed money that belongs to you, you’ll need to answer some questions to prove your identity. You’ll then provide your current contact information and voila, a check will arrive in the mail.

8. Shop for a new car insurance policy

If you’re a good driver, a 2017 NerdWallet report shows that you could save $416.52 per year by shopping around for car insurance. Wow.

Where to start? Compare at least three or four car insurance companies to see if you can get a better deal than what you’re currently paying. Also, call your current insurer to see if it’s willing to match the lower rates you find elsewhere. Make it a habit of negotiating and seeking lower auto insurance rates once a year.

9. Get rid of unwanted gift cards

From time to time, we all get gift cards to retailers we would never shop at. Instead of letting these unwanted gift cards gather dust, sell them online through websites like Raise or Gift Card Granny. Depending on the brand, you can get up to 80% or 90% of the card’s face value in cash.

10. Get crafty

Do you like to make beaded jewelry, handcrafted ceramic pots or anything else that’s artsy? Etsy is a popular website for people with a talent for crafts. If you have been thinking about selling your wares online, why not just do it?

Your earnings can vary depending on the quality and demand for your products, but it’s possible to earn some serious extra dough from your hobby.

11. Rent out a room

Got a spare bedroom in your house? Why not turn it into cash? Airbnb and VRBO allow just about anyone to rent out a room, a couch or their entire home to travelers looking to save on accommodations.

This option is best if you live in a popular tourist destination or major city, and you’ll have to be comfortable with having strangers stay in your place. But it’s possible to earn hundreds if not thousands of dollars a month. As an example of how much you can earn, a quick search on Airbnb for a private room in Chicago yielded an average rental rate of $109 per night.

12. Lend your money to others

Investing in the stock market can be risky, especially if you’re a newbie investor. Instead, consider investing in people by lending some of your cash and earning interest.

LendingClub and Prosper are top peer-to-peer lending marketplaces that allow you to lend money to people looking to borrow in the form of personal loans. LendingClub claims historical returns of three to eight percent a year and Prosper says you can earn an estimated return of 7.3% on average.

13. Invest your spare change

If you like Chime’s Automatic Savings program mentioned above, you may want to consider Acorns, a micro-investing app. All you have to do is connect your bank account or credit card. Every time you use your card or checking account, Acorns will round up the transaction to the nearest dollar and invest the round up amount in exchange-traded mutual funds.

14. Run errands or do handyman work

If you have spare time and the right skills, you can earn some money on the side through TaskRabbit.

The TaskRabbit website matches people in need of home services with “Taskers” who are eager to help and earn extra cash. You can sign up to offer various services, including grocery shopping, furniture assembly, moving and packing, and general handyman work.

15. Online focus groups

Both large and small companies spend a lot of money doing market and consumer research to get feedback on their products. You can participate in such focus groups online through websites like FocusGroup, Fieldwork and Inspired Opinions.

Keep in mind, however, that some focus groups may require that you attend in person.

16. Test out apps and websites

One of the many ways app and website developers make improvements is by asking consumers for their feedback.

UserTesting pays you to use apps and visit websites, and then offer up your opinions. You’ll complete a few tasks while recording your thoughts as you speak them aloud. You can earn $10 for every 20-minute video you complete, for an hourly rate of $30.

17. Use coupon codes

Online retailers often create coupon codes and promotions to entice shoppers to buy something. But unless you receive every retailer’s e-newsletter, you likely won’t ever hear about these deals.

Luckily, websites like Honey and RetailMeNot offer browser extensions that let you know when a website you’re on has available coupon codes. While you’re technically not earning money through these tools, you’ll keep more of your cash in your wallet.

18. Play with apps on your phone

If you enjoy exploring new apps on your phone, you might as well get paid doing it, right?

AppKarma allows you to earn cash and gift cards just for downloading and playing with different apps on your phone. While you won’t get rich doing this, it may be worth it if you have the time and enjoy trying new apps.

Are you ready to save more cash?

There are countless ways to earn money online and boost your savings. The 18 options listed here are just the tip of the iceberg. As you do your own research, you’re bound to find something that suits your skills, passions and wallet.

 

5 Financial Moves to Make Before You Go House Hunting

So, you’ve been poking around at houses. You’ve found the neighborhood of your dreams and you’re ready to say “sayonara” to your grouchy landlord.

Yet, moving out of your apartment and buying a house isn’t as easy as it sounds. While you may be mentally ready to make the leap, you also need to be financially prepared. This means you’ll need enough savings for a down payment and a strong credit score – especially as we are in seller’s market.

In a seller’s market, homes sell at an accelerated rate, at higher prices – often after bidding wars. According to Realtor,com, homes are selling 10 percent faster and for nine percent more money than at this time last year. If you’re a first-time house hunter and you aren’t prepared, you may end up losing out on house after house.

Sounds stressful, right? Luckily, we’re here to help with 5 ways to prepare for house hunting. Take a look:

1. Get Pre-Qualified

Pre-qualification for a mortgage is a quick and free process that can be done online or in-person with a lender. In the pre-qualification process, you start by answering a few questions about your finances. Based on the information you provide, the lender will tell you if you’ll be approved, how much house you can afford, and what your interest rates will be. It is ideal to get a quote from two or three different lenders. This way you can choose the lender with the best rates and fees.

 

While this is not a promise or guarantee that you’ll be approved for the loan, you’ll have an estimated loan amount that can help you determine your house budget.

2. Save for a Down Payment

While some first-time home buyer programs help you purchase a home for as little as three to three-and-a-half percent down, here’s the truth: a higher down payment can help you get approved for a loan quicker and grant you access to lower interest rates, according to Experian.

Also, if your down payment is less than 20 percent of the home price, you’ll typically be required to pay annual Private Mortgage Insurance (PMI.) We know: 20 percent can be a of lot of cash to save up. For a $250,000 home, for example, you’ll need to save $50,000. And, while it’s a good idea to save as much money as possible before house hunting, it’s also important to buy a home you can afford. For this reason, it’s a good idea to talk to a real estate agent and mortgage lender to help you figure out how much home you can realistically afford to buy.

3. Boost Your Credit Score

An excellent credit score isn’t just for bragging rights. A score higher than 740 will allow you to get approved for a better mortgage with lower interest rates.

Not sure what your credit score is? You can fix this fast by ordering a free credit report through Annualcreditreport.com. With your credit report in hand, make sure all the information is accurate. If not, go through the proper channels to fix this (Annual Credit Report’s website helps you with this).

If you need to improve your credit score, there are many ways to do this. According to Randall Yates, founder of online mortgage marketplace The Lenders Network, here’s a good first step: “A simple way to increase your credit score quickly is by paying down the balances on your credit cards.”

“Try to get each card balance below 15% of the credit limit to maximize your score and improve your chances of getting approved with the best loan terms,” says Yates.

By doing this, you’ll be slowly but surely improving your credit utilization rate, which accounts for up to 30 percent of your credit score. You can figure out your credit utilization rate by taking the amount of your credit card debt and dividing it by your credit limit. For example, if you have $1,000 in debt and a $2,000 line of credit, your credit utilization rate is 50 percent. You can learn more about how to improve your credit utilization rate here.

4. Have a Steady Source of Income

Even if you hate your job, think twice before getting a new job immediately before house hunting. Why? Your work history and income paints a picture for mortgage lenders. A solid job makes you appear financially stable and reliable. And, you often won’t get approved for a loan if you’re unemployed or have only been at your job for a short period of time.

5. Get Pre-Approved

Once your finances are ready and you are actively looking for a house, it’s time to secure a mortgage pre-approval letter. A pre-approval letter is different from a pre-qualification letter because an underwriter investigates your finances top to bottom. There is no hiding a late payment or excess amount of debt from the underwriting process.

“The pre-approval process is very quick, and can be completed in as little as an hour,” says Ariel Szabo, a Boston-based real estate agent. “The one variable that could hold up the process is how long it takes you to submit the necessary documentation,” she explains.

What financial paperwork should you have ready to submit?

“At a minimum, your mortgage officer will need to review your taxes, proof of income, and statements of your assets and debts,” Szabo says. You should also have your driver’s license and social security number ready.

A pre-approval is a game changer. Once you have a pre-approval letter, you become a noteworthy buyer and sellers will know you can actually afford to buy the house.

Are You Homeowner Material?

Buying a home is an exciting adventure, but it is also a serious commitment. By following the 5 steps here and being prepared, you’ll be ready to start house hunting and hopefully snag your dream home.

 

Money Stress Is an American Problem; Here’s How to Fix That

Americans are stressed out about money.

The statistics about Americans and money aren’t great in most cases; in 2015, 76% of CFP’s said that their clients number one financial stressors was healthcare costs. A 2016 survey of Baby Boomers revealed that 60% fear running out of money in retirement. And 30% of adults in the US feel stressed about money constantly.

Money is supposed to be a tool. But when you don’t understand it, or earn enough of it, it gets to feeling stressful really quickly.

If you’re feeling stressed out about money, here are a few ways to calm down and sort the situation out.

Take a Deep Breath

When you’re beginning to feel that money stress get out of control, take a deep breath. Stress is physically unhealthy for us and it keeps us from being really productive. Before you can do anything else, you need to take care of yourself.

Figure Out Your Numbers

Numbers always tell the truth. Sometimes it might be difficult to hear that truth, but it’s always the first step.

You can start by listing out all your monthly expenses and categorizing them into needs and wants. This helps you see where you can cut back, if you can cut back at all. Second, do the same thing with your debts; list them out so that you know what you owe and where to send it.

Knowing your numbers gives you the power to change them. Whatever your next move is, reduce your money stress with figuring out the numbers.

Learn About Money

Learning and reading about money is a great way to demystify it. If something feels foreign to you it’s probably going to stress you out more than the thing that feels familiar. Money stress will go away over time as you learn more about money.

You can read blogs and books about money. Start listening to money podcasts. You can talk to friends and family about how they manage their money. There are a lot of options to learn about money once you start looking. Here’s a list of three books about money to kickstart your journey.

Start Small

Taking one step today and one step tomorrow is the way to go. Don’t try and climb your money mountain all at once. Small things become big things, and time can be your friend.

For example, something you’ll hear a lot in the personal finance world is that you need to have an emergency fund with 6 months living expenses saved in it. That can take months, if not years to save! But starting off my saving $50 a month is great- it lays the groundwork for your emergency fund and introduces the habit of saving.


This article originally appeared on Due.com.

 

Halfway Through the Year: Mid-Year Financial Planning Guide

Remember the winter – when you were popping champagne with friends and crowding around the TV to watch the New Year’s Eve ball drop? This year held so much promise.

In fact, you may have been among the 41% of people who make New Year’s resolutions every year. Perhaps you even resolved to get your finances on track for good.

Time flies, doesn’t it? We’re mid-way through 2018 and now is a great time to check in on your online bank account to see if you’re on track to meeting your financial goals. Nervous? Don’t be.

We’ll show you how to assess your progress. And, if you think you can be doing better, well, don’t worry — we’ll show you how to get back on track so you can end the year strong. Take a look at our top 3 steps to shore up your financial game plan for the year.

Step 1: What’s your measurable end-point?

“Be better at money” and “save more” are noble goals, but they’re a bit wishy-washy. For example, are you “better at money” if you’ve bumped up your retirement contributions, yet you’re still overdrawing your checking account? Have you really “saved more” if you’ve only saved five dollars? What about $500?

See what I mean? It helps to have a clear-cut defined goal.

Here are some examples of solid financial goals:

  • Save 10% of your paycheck towards retirement
  • Set up a $1,000 emergency fund
  • Get one month ahead on monthly expenses (and know what that number is)
  • Pay zero bank fees

Once you have a measurable end-point for your goal, you can track your progress against this goal like a measuring stick.

Step 2: How close are you to reaching your goal?

There are two ways to reach a goal. You can do it in short bursts and sprints (like if you’re expecting a big bonus or raise), or with a slow, steady, constant pace (like if you set aside the same amount of money every month).

If possible, it’s a better idea to go the steady turtle route since this will help you make a habit of it. After all, once you get a big bonus or raise, you’ll be able to find 10,000 different excuses for how to spend the money (hello, sushi bar — you deserve a nice night out, right?)

If this is the case, and you’re trying to save a constant set amount, try this: divide your total goal amount by 12 (one for each month of the year).

For example, if you’re trying to pay off a $5,000 credit card balance before the end of the year, you need to pay roughly $416.67 per month (it may be a bit more, assuming interest will be tacked on each month). Or, if you’re trying to save $4,000 into your emergency fund, you need to set aside $333.33 per month.

Now, multiply that number by how many months we are into the year. If you’re doing this in July, for example, you would multiply your monthly number by seven. This will tell you how far along you should be if everything is going according to schedule. For our credit card example, you need to have paid $2,916.69 so far. If you’re shooting for a $4,000 emergency fund, your savings amount should be $2,333.31.

Step 3: Celebrate! Or, knuckle down.

How close are you to meeting your goal? Are you on track? That’s great – congratulate yourself!

If you’re not on track, no worries. There’s still plenty of time to try to reach your goal. Here are some tips to help you get back on track, or stay on track:

  • Automate your finances

The best way to make progress towards your goals is to take the routine hassle out of it and automate your finances. You can set up automatic debt payments or transfers to your savings account by logging into your account or calling up customer service.

  • Up your side hustle game

A great way to make more money to reach your goals is by starting a side hustle. If you like people and have a new(ish) car, you can try driving for Lyft or Uber. Spare room in your home? Try renting it out on Airbnb. Have a few minutes while you’re watching TV? Try filling out surveys or doing VA (virtual assistant) work. You can even get a part-time weekend job at a fun store or business. The options are endless.

  • Seek support

I guarantee you that no matter what your goal is, there are a ton of other people out there reaching for the same thing. Why not try to find them in online or real-life support groups? You can be as open or as anonymous as you want. What counts is hearing stories and getting support from other people who are going through the same struggles as you.

  • Get professional help

Need some serious accountability and advice? Try reaching out to a fee-only financial advisor or financial coach who can help you get back on track. The XYPN Planning Network is full of great advisors and coaches who can help you.

Don’t panic

You’ve got this. If you’re currently on track, all you have to do is keep up the pace. If you’re falling behind, don’t worry. Even if you won’t reach your original goal, you’ll still make a lot of progress just by trying. After all, no one ever ended the year and said, “gee, I wish I had less money saved,” or “wow, I wish I hadn’t paid off so much debt over the past year.”

If you buckle down and start working toward your financial goals now, you’ll be in a better spot by the end of the year than you are right now. What’s not to like about that?

 

How to Sound Like a Pro When Buying a House

Here’s the truth. The process of buying a home includes a lot of unfamiliar words that you’ll probably never need to know again. But as you go through the steps of purchasing a home, this new vocabulary is crucial.

Besides, you’ve already taken steps to improve your finances to put you in a position to buy a house. You’ve automated your savings, built a fund for your down payment and started researching neighborhoods in your city. It’s only fitting that you now learn the lingo so that you are prepared to be a homeowner.

Here’s everything you need to know to sound like a pro and make an informed home buying decision. The best part? We’ve translated this terminology from “finance speak” to plain English.

#1: What is a mortgage?

7-word summary: Legal agreement between you and the lender

Your mortgage is an agreement between you and your mortgage lender. It’s a legally binding way of shaking hands and agreeing to the terms. Lenders are often banks or credit unions, but can also be mortgage brokers or other types of lenders. The mortgage agreement basically states that you are obligated to pay the lender the full amount of the mortgage (plus interest) through a payment schedule.

Your house is collateral for the mortgage. This means that your house serves as a guarantee that you will pay back the lender. If you don’t make your payments, the lender has a claim on the house and will have a way to recoup the cost of the loan. This helps to reduce the risk for the lender.

Mortgages are typically large amounts of money—upwards of $100,000 and often 20 percent of the price of the home.

#2: What is a fixed-rate mortgage?

7-word summary: Same interest rate throughout the mortgage term

Fixed-rate mortgages tend to be the most popular because the interest rate doesn’t change throughout the length of mortgage, which is typically 15 or 30 years.

This means that a fixed-rate loan may be a great option if you want a stable, reliable monthly payment that won’t fluctuate. It feels a bit like renting—you have a set monthly payment and pay the same amount every month until the lease expires.

#3: What is an adjustable mortgage rate?

7-word summary: Fluctuating interest rate throughout the mortgage term

If you don’t have a fixed mortgage rate, then there’s a good chance you have an adjustable mortgage rate, or AMR. These mortgage rates typically have a short-term fixed rate period and then transition into adjustable rates.

An adjustable mortgage rate loan means that the interest rate can fluctuate – some months may be higher than others. This doesn’t mean that you’ll get a daily email with a new rate. Instead, it means that there are preset intervals during which the rate may change for a period of time. As a result, your monthly mortgage payment may change too.

#4: What is private mortgage insurance?

7-word summary: Insurance that provides additional protection for lenders

Also known as PMI, private mortgage insurance is a type of mortgage insurance that not everyone has to pay. PMI is another way that lenders protect themselves from losing money. You’ll typically be required to pay PMI if you have a conventional loan and have less than 20 percent of equity in the home.

Some buyers avoid PMI altogether by making a downpayment that is 20 percent or more of the purchase price. For example, if you buy a home that is $500,000, you’ll need to pay PMI until you have at least $100,000 of equity. You can avoid PMI in this situation with a down payment of $100,000 or more.

#5: What is an appraisal?

7-word summary: Expert opinion about the value of property

An appraisal is basically written evidence that the value of the property is based on fact (and not just what the seller wishes it is worth). Here’s the deal—you’ll probably want to know how much a potential home is worth and lenders definitely want to know what the home is worth.

Sellers list homes for an asking price, but this may or may not be the actual value of the home. There are a lot of factors at play when it comes to determining the value of a property and lenders often require buyers to get potential properties appraised by a professional.

#6: What is closing costs?

7-word summary: Fees and payments for purchasing a home

You probably already know that buying a home is expensive and you might have even heard the words “closing costs” thrown around a few times. Even though this sounds mysterious, closing costs are actually just the fees and payments associated with buying a home.

Here’s what is often included:

  1. Appraisal fees
  2. Government taxes
  3. Title insurance
  4. Tax service provider fees
  5. Prepaid expenses like property taxes or homeowners’ association fees

It’s okay if you’re not an expert

As you’ll probably only buy a handful of properties throughout the course of your entire life, it’s okay if you’re not a full-fledged expert on the topic. But even though you may never be an expert, it’s always a good idea to know the basics and feel confident in your decisions. And, keep in mind: the sooner you start preparing to buy a house, the better off you’ll be when the time comes to make an offer.

 

The 21 Best Financial Habits to Develop at Every Age

Your financial health and potential for building wealth are dependent on your habits. Short of winning the lottery or receiving a massive inheritance, the best financial habits involve those little decisions you make every day and every week.

Developing these habits all at once is problematic. First, there is a steep learning curve. Second, not all strategies are equally effective at every age. The best approach is to gradually master your financial habits as you grow older. There are good money habits to build at every stage of your life.

In General: The Earlier, the Better

For the most part, the earlier you learn these financial habits, the better. If you’re able to develop habits ahead of your age, you’ll stand to benefit. There are three reasons for this:

  • Habit acquisition. It’s easier to learn new things and build good habits when you’re young. If you establish good money practices early enough, it will be nearly impossible to break those habits.
  • Mistake adjustment. If you employ a habit but make a mistake in its execution, it can destabilize your financial track. Making that mistake early gives you ample time to recover from that mistake and learn from it. That way, you never repeat it again.
  • There’s also the power of compound interest to consider. Investing money early allows compound interest to grow that money exponentially over decades. It also prevents compound interest from working against you. A good example is in the case of debt.

In Your Teens

Your teenage years won’t come with much responsibility or many opportunities to make a significant income. Accordingly, there aren’t many financial habits you’ll need to focus on. These three are a good start:

  1. Saving money. Saving money is one of the best habits to learn early. In your teens, you’ll be tempted to spend every cent of your incoming paychecks. However, learning to squirrel away at least a portion of your earnings will always be beneficial.
  2. Tracking your spending. This is also the best time to start habitually tracking your spending. Instead of buying what you feel like, when you feel like it, write down how much you spend in each of several categories. Then, compare expenditures with income. This will provide you with the budgeting skills necessary to last a lifetime.
  3. Opening and using. You probably don’t “need” a credit card in your teens. However, it’s useful to have as an emergency option. Plus, it’s ideal for starting to build credit, which you’ll need in the future. Consider opening a savings, checking, and credit card account in your name. Then, focus on managing them responsibly.

In Your 20s

In your 20s, you’ll be out of school and ready to start your career so you need these financial habits:

  1. Checking your credit score. Checking your credit score is free.  Therefore, it’s good to get in the habit of checking it regularly. Knowing your credit score is valuable for making big-ticket financial decisions. It can direct you to weaknesses in your credit report to work on improving them.
  2. Contributing to a 401(k) or similar program. If your company offers a 401(k) or a similar investment program with a company match, take advantage of it. Company matches are essentially free money.
  3. Mastering your student loans. The average college student graduates with $30,000 in debt. If you don’t start addressing it now, the power of compound interest will make that debt even harder to manage. You don’t have to pay your debt down right away. However, you should have a solid long-term plan in place.
  4. Minimizing your credit card balances. Have one or two credit cards you regularly use. But, it’s important to get in the habit of keeping those balances low. If you accumulate too much debt, it could take over your life.
  5. Living below your means. This is the best way to generate more savings over the long term. Since you’ll be spending far less than you make, you’ll naturally end up with more money to save or invest every month. Opt for less expensive housing and save money on fees and subscriptions.
  6. Setting short-term and long-term goals. Get in the habit of setting and following both short-term goals (like saving up for a home down payment) and long-term goals (like investing $5,000 a year). With good goal planning and execution, all your other financial efforts will become easier.

In Your 30s

Once you’re in your 30s, you’ll have established career momentum to do these:

  1. Establishing a comprehensive emergency fund. You should have an emergency fund in your 20s.  However, by your 30s, that fund should be comprehensive. That means big enough to cover several months of expenses in case you lose your job or face some other catastrophe.
  2. Setting a course for retirement. This is when you’ll need to start thinking about your retirement goals. When do you want to retire? What accounts will you rely on to do it?
  3. Taking advantage of your credit. You’ve built and checked on your credit for the past decade or two. Now’s the time to start taking advantage of it. Buy a house you can afford or open new lines of credit to finance your business idea.
  4. Learning the value of insurance. Understand the value of insurance and take advantage of it for your financial interests. For example, you’ll want a good policy to cover your health, home, car, and other important assets. Plus, you may want to choose a different deductible or coverage policy that best suits your needs.
  5. Renting or buying (as appropriate). Know the advantages of renting versus buying in your area. There may not be a need to rush into buying a home or you may miss out on significant equity by renting. Every location is different.
  6. Navigating marriage and children. Consider the financial implications of marriage (if you’re planning to get married) and the expenses associated with raising children. Planning a family responsibly can mean the difference between affording a comfortable lifestyle and succumbing to debt.
  7. Planning for your children’s futures. If you’re planning to send your kids to college, start thinking about college savings(or a similar savings strategy for your children). For example, you may choose to open a 529 college savings plan and contribute regularly to it.
  8. Investing as a monthly expense. Think about investments and retirement savings as a monthly expense. These become necessary, regular expenditures for the sake of your future. Don’t let your other living or entertainment expenses distract you.

In Your 40s

In your 40s, you’ll have mastered the vast majority of important financial habits, but there are still a few to learn:

  1. Rebalancing your portfolio. Now, you should be in the habit of routinely rebalancing your portfolio. This includes adjusting your assets to favor the current market conditions or to help gradually reduce risk as you prepare for retirement. Slowly move toward a bond-heavy distribution of assets in your investment portfolio.
  2. Prepping for divorce. No matter how happy you are currently, there’s a significant possibility that your marriage will end in divorce. This event can be financially devastating to one or both parties. It’s imperative that you plan how to handle those expenses.
  3. Intelligently managing your assets. If you’ve had good financial habits for the past few decades, you should have significant assets to manage. These include properties, vehicles, and other investments. Make sure you’re managing them intelligently and improving their resale costs. Also, cite them properly on your taxes and sell them when appropriate.
  4. Splurging when appropriate. Retirement isn’t everything. By now, you should know the difference between a healthy splurge and reckless spending. However, don’t be afraid to pamper yourself every once in a while. Start doing more things that make you happy.

Beyond Your 40s

At this point in your life, your efforts should focus on maintaining the status quo and learning from your past mistakes. Additionally, it’s about concentrating your savings and investments on retirement prep. By the time you hit 50, all these financial habits should have prepared you for a stable future. There should be enough resources and experiences to help you achieve long-term goals.

Don’t regret your financial decisions. Take the time to learn and master these money habits as early as possible. And, be grateful for the discipline you exercised.


This article originally appeared on Due.com.

 

The Best Financial Habits for Single Moms

A single mother trying to run a household is five times more likely to live in poverty than a family helmed by a married couple.

While budgeting is a topic that many struggle with, single moms have the added challenge of managing finances on their own – with kids to raise. If you’re in this boat, take a look at 6 habits you can adopt to get ahead financially.

Learn How to Budget

Learning how to budget is the number one factor if you’re a single mom looking to manage your finances. When juggling a job and kids, plus paying for everything solo, a budget helps keep you on track. It also provides a window to see where you’re spending your money. With a budget in place, you’ll be able to make better decisions and figure out where to cut out unnecessary expenses.

So where should you start when it comes to creating a budget? There are plenty of options, including writing everything down with a pencil and paper, or using an online solution like Every Dollar, YNAB (also known as You Need A Budget) and Mvelopes. All of these online software options make creating a budget (and following it) easy.

Before you do anything, however, you first need to determine your budgeting style, and then use the proper tools and software that will work best for you. There isn’t a one size fits all budgeting answer, so you can tweak and change your budget whenever you want to.

Automate Your Savings

It may be hard to save money as a single mom, but even as little as five dollars per paycheck is better than not saving at all. Also, by automating savings, you won’t even notice the money being saved and it will seem effortless.

To start automating your savings, check out Chime. With a Chime bank account, you can save without even thinking about it. Not only can you save 10% of your paycheck every time you get paid, but Chime also offers a round up feature whereby every purchase you make with your Chime debit card is rounded up to the nearest dollar. This round up spare change is then deposited into your Chime Savings account. While saving your change may not sound like much, it is helpful when saving for a rainy day. This brings me to the next point.

Have an Emergency Fund

There will come a time when an emergency fund is needed, and a single mom doesn’t have the opportunity to turn to a spouse or significant other for financial help. This is why it’s important to save up for emergencies for socking money aside into a separate account.

Having an emergency fund can keep a single mom from getting into debt, or worse, not being able to afford essential necessities, such as car repairs or home repairs. While there isn’t a hard or fast rule as to how much you should save in your emergency fund, you should tailor it to your current income, expenses, and what you deem acceptable.

Don’t Be Afraid to Ask For Help

The U.S. Bureau of Census conducted a survey in 2016 which concluded that child support represents 47% of a custodial parent’s income who receive child support and lives below the poverty level. Whereas child support is beneficial, there are also other programs and resources that offer financial, educational, and housing assistance.

Temporary Assistance for Needy Families, also known as TANF, for example, can help you find employment, on-the-job and vocational training, and child care assistance. Other beneficial programs include Supplemental Assistance for Needy Persons (SNAP) and the Women, Infants, and Children program, also known as WIC. These are both resources for supplemental food and nutrition. In some cases, they provide single moms with debit type cards to help purchase food.

While these resources were put into place to help mothers in financial need, they are also considered temporary resources so that mothers can get back on their feet.

Teach The Kids

When you’re trying to take care of your family’s financial needs, it can be hard to teach the kids about smart financial habits. Yet, this is important – especially if you want your kids to grow up to be financially self-sufficient.

Former single mom Chonce Maddox from My Debt Epiphany, for example, teaches her son about living simply, saving for a rainy day and avoiding debt. She also gives him a small allowance and is teaching him how to handle the money he receives responsibly, including how to save for the future.

Books, podcasts, and even television programs can also help you pass along important financial lessons to your kids. Not only is financial education the best way to break the debt cycle, but it’s also a way for your to bond with your kids while learning about healthy money habits.

In Conclusion…

A single mom does not have to struggle financially while raising her children. It is possible for the average single mom to be smart financially and have healthy money habits. These habits aren’t hard to accomplish or follow through with. All they take is willpower, a willingness to get help when needed, and the ability to learn and grow through saving, budgeting, and hard work.

 

The History of Overdraft Fees

Overdraft fees are a wolf in sheep’s clothing. While a bank often markets overdraft protection as a way to help you out when you make an occasional budgeting error, it’s really just an expensive form of credit.

Think about it: in 2014, the Consumer Financial Protection Bureau (CFPB) found that the majority of overdraft fees were charged on transactions of $24 or less. With a median fee of $34 at the time, the same type of charge on a loan for a similar three day period would result in an annual percentage rate (APR) of 17,000%.

How did we get to this point? And what can you do about overdraft fees? Read on to learn more.

A short history of overdraft protection

An overdraft occurs when you’ve written a check, taken a cash withdrawal or used your debit card in an amount that exceeds your available funds. Most banks and credit unions offer overdraft protection, and this covers your shortfall in exchange for a fee.

The first overdraft authorization happened in 1728, according to the Royal Bank of Scotland. An Edinburgh-based merchant named William Hog received permission from his bank to temporarily withdraw more money from his account than he had available. This cash credit, as it was termed, was the forerunner of the modern overdraft. At one point, 18th-century philosopher David Hume called the cash credit idea “one of the most ingenious ideas that has been executed in commerce.”

But, let’s now think about this in terms of modern times. In 2017 alone, consumers paid $34.3 billion in overdraft fees, according to PYMTS.com. So, it’s possible that if Hume knew what would become of the cash credit idea, he may have changed his tune.

The modern overdraft

It’s unclear exactly when banks started charging overdraft fees. But according to Moebs Services, a research firm that focuses on financial institutions, these fees have steadily increased over time.

In 2000, for instance, the median overdraft fee was $20 among banks and $15 at credit unions. In 2017, those fees increased to $30 and $29, respectively. That said, some of the biggest banks in the U.S. charge between $34 and $36. While there are still some institutions that don’t charge fees on overdrafts of less than five dollars, this is not a universal feature. Also, some institutions charge extended overdraft protection, which adds more fees if you don’t bring your balance back to zero within a certain period. These time periods can range from one day to a week.

What you can do to avoid overdraft fees

While overdraft fees are ubiquitous, it’s possible that you’ll never have to deal with them. For starters, you can budget your money in a way that you never overdraw your account. And, if you make a mistake, you can also get your account back in the black before the end of the business day.

There are also three things you can do to boost your chances of never paying an overdraft fee. Take a look:

1. Opt out of overdraft protection

In 2009, the Federal Reserve Board announced a new rule prohibiting financial institutions from charging overdraft fees on ATM and one-time debit card transactions unless the customer opts in for overdraft protection on these transactions. The rule, which was made under Regulation E, went into effect in July 2010.

Yet, according to a 2017 study by The Pew Charitable Trusts, nearly three-quarters of people who overdraft don’t know they have the right to opt out. Guess what? You can opt out! By doing so, any transaction that overdraws your account will simply be declined.

This may not be ideal in some situations. For example, a credit card company may charge you a returned payment fee if a payment doesn’t go through due to an insufficient balance. For other transaction types, however, the only negative impact from a declined payment may be an embarrassment.

2. Get an account with a bank that offers alternatives

Rather than charging a flat fee every time you overdraw your account, some banks offer less punitive forms of overdraft protection. For example, some banks set up automatic withdrawals from a savings account to cover overdrafts.

Let’s say you overdraw your account on a Monday morning and your account is still negative at midnight. Instead of charging you an overdraft fee, the bank will transfer cash from your savings account to cover the negative amount.

Another option is an overdraft line of credit. Again, instead of charging you a flat fee, the bank charges you interest — say 18% — on the negative balance. While this might seem high, if you overdraw $24 and bring your account back to positive within a few days, the accrued interest amounts to pennies.

3. Get an account with a bank that doesn’t charge overdraft fees at all

With the rise of challenger banks, many new institutions have addressed some of the major issues with the traditional banking system, including the problem of overdraft fees.

If you open an account with Chime, for example, you’ll never pay overdraft fees. Period. This means you don’t have to find some other way to avoid the problem because there’s no problem to begin with.

The bottom line

Overdrafts have been around for a long time, but the penalties keep getting worse. The good news is that there are plenty of ways to avoid overdraft fees, and some financial institutions don’t charge them at all.

If you’ve paid an overdraft fee recently, it may be a good time to look into alternatives at your bank or switch banks altogether.

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