In Debt?
The following is a guest post.
Most of us have debt, but it doesn’t have to be the norm if you rather pay it off. You can get professional help with debt or tackle the problem yourself. With some willpower, a plan, and some automation, you can be debt free.
Track Your Income and Expenses
The first step to any money issue is to figure out where your money is being used. Track your income and expenses for a month or more to find out exactly where your money is going. This means keeping up with each and every expenditure. If you start blowing off the small stuff, you won’t have a perfectly clear picture, so write it all down. By the end of the month, you will have all of the spending information you’ll need to make a plan.
Make a Plan
You can use what you know from tracking your income and expenses to make debt management plans. The first step is to see if your income is covering all of your spending. If it is, then you can use your monthly extra towards debt. If it isn’t, you’ll need to cut your expenses or increase your income. Can your housing costs be decreased? Have you called your monthly services to ask for discounts? Do you have unnecessary expenses that can be cut?
If you decide to increase your income instead, look into a better paying job or a side hustle. Dog walking, pet sitting, baby sitting, or a part-time job at a local business can usually fit into any schedule. Take a look at all of your skills and see what you can monetize.
Tackle the Debt
Once your income surpasses your expenses, you can throw the extra towards your debt principal. If you make a budget to stick to, remember to include a category just for debt payoff. You can have it automatically applied or at least automatically moved into a different account to keep yourself from breaking your own rules. We are sometimes our own worst enemies.
If you follow your own plans and keep hitting your debt with any extra you can scrape together, you will soon be celebrating debt freedom! Good luck
Quicken – Losing its Luster?
Having used Quicken for longer than I’ve been married, it’s a shame to see my long-term relationship with the program start to deteriorate.
Before the advent of online platforms like Mint.com (now owned by the makers of Quicken), personal finance management software was limited to a handful of options: Excel, Money, or Quicken. Even after more choices emerged, the capabilities of these new program were mediocre compared to those offered by Quicken.
Since I’d established a history with Quicken and was dubious of entrusting ALL of my financial information to any one online service, I stuck with what I knew.
Aggregation & Automation make money management easy and effective. Using Quicken’s “One-Step Update”, a single click downloads your financial transactions from all your institutions.
Because Quicken did all of the grunt work, more time could be dedicated to: scrutinizing inflows and outflows, creating budgeting plans or savings goals, reviewing investment performance, and so on.
But… it seems once flaws are noticed, more begin to emerge. Continue reading “Quicken – Losing its Luster?” »
Tips for Buying a Family Home
When you are buying a family home you are no longer just thinking about your own needs – or the needs of your partner – but also a whole hoard of little people, and probably a pet or two as well. Therefore, to help you make sure you are considering the needs of every member of your family when buying a new family home, and that you are able to make the move securely and successfully, follow these 10 steps:
- Research and plan your needs for your home and your home loan.
- Save for a home loan deposit, around 10-20 per cent of the property price.
- Arrange finance including loan pre-approval.
- Start looking for your new family home.
- Narrow down the market to one ideal property, but don’t get too excited just yet.
- Have the necessary building inspections done to inspect the condition of the property.
- Complete the formal loan application and obtain full approval.
- Complete all legal checks and requirements.
- Exchange contracts with the seller and pay your deposit.
- Once settlement is finalised you and your family can move in.
To help you with the five main stages of these steps, consider the following information and advice when buying a family home.
1 – What to buy for your family
If you are buying a new family home it is because your old home no longer suits your needs. Therefore, think about all the things you need and want from your new home. For example, do you need a yard for your children and dog to play in, and do you want an outdoor entertaining area so you can have BBQs at home with your family and friends? Also consider whether there are parks and footpaths around your new house if you like to take your family for walks around the neighbourhood, or if your children will want to ride their bikes.
Of course, your new family home doesn’t have to be a house at all, in many major cities families live in small properties such as apartments, townhouses or studios. This is not only more affordable, but can also mean you’re living in a newer home, closer to the city.
However, no matter what type of home you are looking at, make sure that the area and community suit your lifestyle and that you have access to the facilities you need such as schools, transport, shops, recreational facilities and your workplaces.
2 – Where to buy a family home
Whether you buy a new family home in the city, the country or the suburbs will depend on your family’s needs. For example, if it is important that you have a short commute to work you may look for a family home close to the city, but if you want your children to grow up with a country lifestyle and outlook you may look even further from the city, whereas the suburbs are a compromise for families who want to be away from the bustle of the city and enjoy some space, without being too isolated.
Also remember that where you live can affect where your children go to school, as many schools are zoned, and don’t accept students from outside of the zoned area.
It is also important to look at the value of the area and consider whether property prices are rising or falling in the area. Also look at factors which would influence your property’s value such as the proximity to jails, factories, sewerage plants or major construction. Remember that being on a busy road or intersection, or under a flight path can make normal family life even noisier.
Continue reading “Tips for Buying a Family Home” »
What is it with Bloggers & Traveling?
Well-Heeled had a great article on traveling as the Spending Holy Grail . The post got me thinking, “what is it with personal finance bloggers and traveling?”
We rant and rave about the envy surrounding material possessions, the vanity of keeping up with the Joneses, and the evils of debt – yet most, if not all, of us has written at least one article about some planned or actual trip without concerning ourselves over the cost (or at least trying to justify them).
Just like JD Roth, the thrill of traveling comes from the experience itself, the people you encounter, and how you grow from it. He chronicled his journey through Africa and what he learned while there. Notice the focus on the people he met.
With our 1-year anniversary coming up this weekend, I reflected upon our own excursions. Since we’ve been married, my wife and I have been to Belize (honeymoon), Iceland, Niagara Falls, and will be going to China this November.
We’re months away from our trip, yet are already discussing “what’s next”. Curacao or Hawaii are potential options right now, though we’ve mentioned at least a dozen other countries!
A review of incurred costs reveals traveling is quite the expenditure for us. Sure, we are saving aggressively. We never carry a credit card balance. We have zero debt. We have a robust net worth for our age, but does this qualify us to spend indiscriminately on travel?
There’s a saying I’ve heard which goes: “You can have anything in the world, but you can’t have everything”. I absolutely love the sentiment because it doesn’t limit you in what can be obtained, but rather forces you to recognize choices must be made.
Ramit Sethi championed this idea with the term “conscious spending”. He outlined the habits of friends who spend $5,000/year on shoes and $21,000/year on going out and how they are justified in their spending.
Instead of thoughtlessly spending money on whatever crosses our paths, people engage themselves into determining what it is they truly value. What you personally decide to spend money on doesn’t particularly matter, so long as it’s what you decide is important and not what you think others are expecting you to spend on.
Even with billions of dollars, you could have anything in the world, but not everything.
The Costs of Pet Ownership
Do you have a furry friend at home? And know how much it’s costing you?
… starting to sound like a bad daytime show theme: “Did your ex-boyfriend ditch you and his puppy-gift, leaving you with the costs? Coming up next!”
Unfortunately, that’s often how pet ownership begins – on a whim. But after reading an article on Forbes titled, My Dog’s Life Cost $36,846.24, it got me thinking how the decision to become a pet owner is like any other investment and should not be taken lightly.
The ASPCA compiled a chart outlining the costs of pet care. These costs represent the minimum for “humane care” and clearly note you should expect to pay more than what is detailed.
Using the basic information, a medium dog will cost you a minimum of $695/year not including the initial $565 start-up costs. So at a bare minimum you will spend no less than $7,500 over the course of 10 years. Upgrading to a large dog will increase that bottom line by $1,800.
Remember the ASPCA only captures the minimum for humane care. The Forbes’ author spent almost 5x those projections so it wouldn’t be unreasonable to use a 2.5x multiplier as a truer average cost. If you add this new premium, those baseline costs soar from $7,500 to $18,750.
How to crank up your credit score
More often than not, we never think of our credit score until it’s time to buy a car or apply for a mortgage.
Since it’s not at the forefront of people’s minds on any given day, it may come as a shock to learn you have a lower credit score than you may have previously estimated.
In a tough economy good credit is essential, so how can you bump up that score to stand a chance with lenders?
First of all, take account of your current situation. Are you paying your bills on time or have you found yourself living paycheck-to-paycheck? If you have struggled to make minimum payments each month, fixing your credit will be more difficult, but not impossible.
Obtain a copy of your credit report and dispute any inaccurate information. If unpaid accounts are present, pay them. You may find a quick call to the company can produce a better resolution.
Some people who have experience financial woes in the past, such as foreclosures or bankruptcy, may consider living a cash-only lifestyle. This will never boost your scores and it will only take longer to recover.
Apply for a low-balance credit card if you don’t already have one, make modest purchases and double up on those minimum payments. It’s even a good idea to use any savings you may have to completely pay off the card’s balance every month.
If you already have one or two credit cards, don’t apply for anymore. You may be tempted to improve your credit score by maintaining low balances on multiple cards, but there’s always the temptation to max out every card. Getting into that situation with several cards will only put more strain on your financial situation.
Create healthier habits. Online bill-pay may be more convenient, but some people lose sight of the amount of money they’re spending in auto-drafted bills. Switch back to mail-in bills and write those checks personally.
On that same note, keep better track of your savings by keeping debit card purchases to a minimum. Swiping plastic is a cinch, but it distracts us as to the amount of money we’re really spending. Write checks when vendors accept them or withdraw cash from the ATM for store purchases.
Never close unused credit card accounts. If you’re trying to improve your credit score, closing accounts always hurts and can even make your score drop.
A better alternative is to cut up unused credit cards or hide them so you won’t be tempted to use them.
It’s especially important to keep old accounts open. The older the account, the more you’ll come across as an established, responsible consumer.
Use savings to pay down high balances. Perhaps you’ve built up savings for a house but still need to apply for a mortgage. Using the savings to pay down credit card balances will make you look better to potential mortgage lenders because your debt-to-income ratio will be much better.
If you’re at a loss as to how to improve your credit, don’t turn to credit repair companies. Many people find they end up spending hundreds of dollars on credit repair services only to end up disheartened, with fewer savings.
When you do need extra help, seek out local non-profit counselling services or schedule a free legal consultation. You can clean up your credit by yourself; it just takes a little extra time and effort.
