Identity Theft

March 19, 2018

Working for a more secure internet experienceSomeone gets your personal information and runs up bills in your name. They might use your Social Security or Medicare number, your credit card, or your medical insurance — along with your good name.

How would you know?

  • You could get bills for things you didn’t buy or services you didn’t get.
  • Your bank account might have withdrawals you didn’t make.
  • You might not get bills you expect.
  • Or, you could check your credit report and find accounts you never knew about.

Here’s what you can do:

Protect your information. Put yourself in another person’s shoes. Where would they find your credit card or Social Security number? Protect your personal information by shredding documents before you throw them out, by giving your Social Security number only when you must, and by using strong passwords online.

Read your monthly statements and check your credit. When you get your account statements and explanations of benefits, read them for accuracy. You should recognize what’s there. Once a year, get your credit report for free from AnnualCreditReport.com or 1-877-322-8228. The law entitles you to one free report each year from each credit reporting company. If you see something you don’t recognize, you will be able to deal with it.

Please Report Identity Theft

If you suspect identity theft, act quickly. Please report it to the Federal Trade Commission. Report identity theft online or call the FTC at 1-877-FTC-HELP (1-877-382-4357) or TTY 1-866-653-4261. The FTC operator will give you the next steps to take. Visit ftc.gov/idtheft to learn more.

 

Source: FTC.gov

8 Ways to Save for a Down Payment on a House

March 13, 2018

Realtor Showing Young Family Around Property For SaleWhen I was in my twenties, I had no idea how anyone under the age of forty was able to save up for a down payment on a house.

It was the early 2000s, townhomes were going for about $250,000-$300,000. I was making a great salary of $60,000/year but I had no idea how I was ever going to save the 20% I’d need for a downpayment. I would soon find out that the housing boom was fueled by people buying homes they couldn’t afford, skirting on their down payment in favor or 2nd mortgages!

Looking back, there were some strategies that I used and others I’d share with my younger self, if I had a time machine, and that’s what I’d like to share with you today.

Calculate How Much You Really Need & When

You can’t start saving unless you really know how much home you can afford and when you’ll want to buy it.

Personally, I like sticking with the key money ratio of 20-30-50– 20% towards a savings goal or debt, 30% maximum on housing, and 50% on anything else.

If you make $100,000 a year after taxes, you can spend $30,000 a year on housing. That’s is $2,500 per month.

Let’s call it $2,300 a month because we’ll need to pay for utilities and other housing-related items.

A $2,300 monthly mortgage payment at a 4% interest rate on a 30-year loan is a cool $481,761.

Let’s say you want to save $80,000 – how long would it take for you to do that? How does that fit in with your broader plans?

You need to make these types of calculations to figure out how much you need to save and in what time frame.

Search for Missing Money

One of the first things I tell everyone on my email newsletter is to check for missing money.

There are billions of dollars sitting in state coffers because they don’t know where to send it. Some of it might be yours.

If you’ve never checked, you may be pleasantly surprised. I’ve gotten emails from folks telling me they’ve found hundreds to thousands of dollars. Most of the time, they find nothing. That’s OK – it’s good to check because you never know!

Pay Down High Interest Debt

High-interest debt, like credit card debt, can be a huge drain on your finances.

It may sound counterintuitive to pay down debt when you’re trying to save up for a downpayment but it isn’t. Let’s say you have a high-interest debt that’s charging you 15% and you are saving money into a high yield savings account getting you somewhere around 1% – that’s a brutal 14% spread.

You are trying to store water in a leaky bucket.

What you should try to do is pay down that debt as quickly as possible, potentially putting your home ownership plans on hold until you do. You can take advantage of 0% balance transfer offers so you get a little extra breathing room, but don’t do this if you plan on buying a house in the next year or so. When you open a credit card you trigger a hard inquiry on your credit report, which can ding your score a few points.

Put Savings in a Safe Place

When you have saved up some money, don’t be a fool and try to invest it somewhere volatile. If you plan on buying a home within the next five years, it needs to be put in a safe short-term investment.

Don’t get cute and try to time the stock market. Don’t invest it with your friend’s new restaurant. Don’t loan it to a real estate investor. Don’t try to get a high rate of return on it while it’s sitting around. It’s a recipe for disaster.

Just keep it somewhere safe so that it’s still there when you need it.

Sell Your Stuff

I’ve accumulated a lot of hobbies over the years and some of them I haven’t touched in quite a while. If you’re the same, why not look to sell some of your stuff? You can not only turn some of that stuff into cash but it’s also fewer things for you to move when the time comes!

Start a Side Hustle

The best way to boost your savings is to boost your earnings too. You’ve probably considered asking for a raise from your day job (if not, figure out how you might!) but have you considered starting a side hustle?

I started blogging to help me understand personal finance better but it eventually grew beyond being a simple journal. It soon became a nice side income that would eventually replace my full time income. The blogging income helped pay off my student loans and eventually helped me buy my first house. You never know when a small side job can turn into a much larger one.

Don’t Stop Saving

If you are in a position to save fairly quickly for a down payment, don’t stop saving just because you reached your goal. You’ll want to save a little extra buffer for all those incidentals that creep up when you own your own home. It’s very easy to put as much cash forward as you can when you buy a home and any emergencies that appear soon after a sale can be very detrimental.

Home Buying Resources >> 

 

Source: Wallet Hacks

These Financial Decisions You Make in Your 20s and 30s Can Make or Break Your Financial Future

March 2, 2018

Brazilian woman with friends at rooftop partyHave you ever wondered which life decisions brought you to where you are right now – at this very moment? Or, how your life might be different if you made a few decisions differently along the way?

The truth is, some decisions we make early on can determine where our life is headed – especially in a financial sense. And, very often, the good and bad decisions we make in our 20s and 30s have a lifelong impact, mostly because there’s plenty of time for those decisions to snowball on themselves over and over again.

Which decisions matter the most when it comes to your money? If you’re older, you’ve probably mulled over your life choices plenty already. But the younger you are, the more time you still have to fix things — before they get too far out of hand. Your past financial mistakes may have put you on one path, but you can choose a different one going forward.

Here are some of the most important decisions we make in our 20s and 30s, and what you might want to do differently if you still have a chance:

#1: Where you live

Where you live – and how much you pay for housing – can play a huge role in your future financial state. However, it’s important to note that the sword strikes both ways. Living in the inexpensive south or Midwest will absolutely help you save money, but you may not have the same type of job opportunities you would in a larger city or metropolitan area.

The average rent in a one-bedroom apartment in Boston, San Francisco, or New York City may range from $2,930 – $3,680, but you have to factor in what big city living could do for your career. While you’ll pay out the nose for a place to stay, you could make connections that could lead to much greater earnings overall.

And, let’s not forget that salaries in big cities tend to be a lot higher. A marketing manager in the New York City metropolitan area earned an annual mean wage of $188,510 in 2016, but the same job in Western Central Illinois paid just $83,000.

Then again, you may never be able to afford a home in Manhattan, where the average home price is inching toward $1.4 million. In Springfield, Ill., on the other hand, the average home price is just $105,000.

The bottom line: Where you live can make a huge difference in your ability to purchase a home or save for the future. However, your location can impact your earnings and career potential, too.

#2: Your choice of college

Your choice of college affects more than your eventual circle of friends; it affects your finances, too. Choose a less expensive school, and you could graduate with a lot less debt, while a more expensive school could leave you saddled with student loans for decades.

Unfortunately, this decision is a lot more nuanced than just choosing between a public or private school. Your college choice may depend on the financial aid you receive, and also on the college major you want to pursue.

Either way, the consequences of overpaying for a college degree can absolutely last a lifetime. The average four-year public university now costs $20,770 per year for tuition, fees, and room and board. That’s over $80,000 for a degree — and that’s if you choose an in-state public university. A private, nonprofit college will cost you more than twice as much: $46,950 per year on average, according to College Board.

These figures may make a two-year degree seem like a better decision. As College Board notes, average tuition, fees, and room and board at two-year schools amounted to just $11,970 for the 2017-18 school year. While graduates with a bachelor’s degree or better tend to earn far more over the course of their careers, there are plenty of high-paying jobs that only require an associate’s degree.

No matter what you choose, any student loans you carry into adulthood can impact your ability to grow your wealth. So, make sure you choose wisely.

#3: Whom you marry – or whether you get married at all

Getting married comes with some tangible financial benefits. You get to split the costs of housing and daily living expenses, for example. If your partner has a higher salary than yours, you could also score a better standard of living than you could afford on your own.

But, the financial benefits of marriage could be truly limited if your partner isn’t that great with their finances. Will you marry a saver or a spender? Will your partner pay for their share of the bills, or will they cost you more trouble (and money) than you bargained for?

Whether you get married or share your life with someone can impact your financial future, but who you marry and their attitude about money matters just as much.

#4: Whether you negotiate your starting salary

If you don’t negotiate your salary – and especially your starting salary – you could be sacrificing up to $7,500 per year in lost earnings. This is according to GlassDoor’s “Know Your Worth” tool – an online calculator that helps people study salary data they can use to negotiate pay.

And as intimidating as negotiating sounds when you’re just starting out and willing to accept almost any entry-level job in your field, if you accept a first real salary that’s lower than it should be, it could follow you around for years – and even to other jobs.

For example, imagine you started a job with a salary of $40,000 and received a 3% raise each year. After 10 years, you’d be earning $52,190 a year. If you had started out with a $45,000 salary, on the other hand, you’d be earning $58,714 – more than $6,500 more per year. And if you decided to change jobs, you’d likely hold out for that extra $6,500 – and a potential employer would be more likely to offer it to you, since it’s what you’re already earning.

#5: Whether you rent or buy a home

There are a ton of factors that can impact whether someone decides to buy a home or rent. Fortunately, there are advantages to be had on both sides of the equation.

Buying a home comes with the notable benefit of being able to build equity as you pay down the principal on your mortgage over time. And if your home rises in value, you could also turn a profit on your property when you go to sell. It’s one of the most tried-and-true ways middle-class Americans have been able to build wealth, and the average homeowner’s net worth is 45 times that of the average renter.

Of course, homeownership isn’t always ideal since you’re also on the hook for maintenance, upkeep, and repairs. And, when you go to sell, there’s no guarantee you’ll break even after paying realtor fees and closing costs.

Renting can be a smart option since you don’t have to worry as much about fluctuations in your local real estate market or paying for repairs. You also have more flexibility to move if you come across an excellent job opportunity.

Either way, whether you choose to rent or buy can make a big impact on your financial health – good or bad.

#6: How long you wait to have kids – or if you have kids at all

Many people say that the cost of having kids is the best money they’ve ever spent, but that doesn’t mean that kids are affordable. Between the costs of daycare, housing, healthcare, and education, the USDA says the price tag of raising a kid to age 18 is over $233,000

When you have kids is just as important to your financial future as whether you decide to have them.

If you have kids when you’re especially young and not earning a lot, for example, you might struggle so much to pay for essentials like childcare or healthcare that it’s hard to save for retirement or the future.

If you wait until you’re more established and older to have children, you could already have a small nest egg and more financial stability.

Of course, you can save a bundle by not having kids at all and skipping all child-related expenses.

#7: When you start saving for retirement

When you start saving for retirement matters as much, if not more, than how much you save. Why? Because the power of compound interest offers a distinct advantage for those who start saving and investing early.

To illustrate how big a difference this can make, let’s compare two people who start investing at different times in their life:

Kevin is a 25-year-old who invests $500 per month in a retirement account for 40 years, until he’s age 65.

Keith starts investing at age 45, saving $1,000 per month for 20 years to try and make up for lost time.

By age 65, Kevin would be sitting on $928,572 in retirement savings, assuming an average annual return of 6%. Keith, meanwhile, will be approaching retirement with $441,427 — less than half as much, despite contributing just as much money to his retirement account.

How did Kevin end up with so much more money saved? The answer is simple: time and compound interest.

#8: Your mentality about money

While all the choices on this list can lead to a financially fruitful future or a broke one, there’s one factor that may be more important than the rest – your money mindset. How will you prioritize your spending and savings goals in a world where consumerism is the norm and pretty much everyone you know is living above their means?

How you answer that question could make you richer or poorer – and that’s true no matter how much you earn. After all, we’ve all heard about “millionaire next door” types who live frugal lifestyles so they can save huge sums of money on unremarkable salaries. However, there are just as many people who earn a lot and spend every cent.

If you approach every financial scenario with a “YOLO” mentality, then it’s likely you won’t have much saved by the time you retire. But, if you’re dedicated to saving and only splurge for the things you want most, you have a better chance of reaching your goals.

Will you spend, or will you save? Like every other factor on this list, the choice is yours.

 

Source: The SimpleDollar

Understand Your Mortgage Interest Rate

Changes in real estate pricesIf you’re like most people, you want to get the lowest interest rate for your mortgage loan. It can be difficult to figure out, but knowing what factors determine your mortgage interest can help you prepare for the home buying process.

The Consumer Financial Protection Bureau (CFPB) says “even saving a fraction of a percent on your interest rate can save you thousands of dollars over the life of your mortgage loan.” Do your homework and shop around to compare rates from different lenders. Understand a few of the factors they look at to determine your rate beyond credit history.

Home Location: Lenders will often offer different interest rates depending on what state or county you live in. To get accurate estimates on interest rates in your state and county, use this CFPB tool to explore interest rates depending on your loan amount and type.

Down Payment: A larger down payment usually leads to a lower interest rate. Lenders assume less risk if a home buyer has more money invested in the property. If you can comfortably put down 20 percent or more, do it. You’ll usually get a lower interest rate and pay less over the course of the mortgage.

Loan Term: The duration of a loan will also determine the interest rates that will be paid. Shorter term loans will generally have lower interest rates and lower overall costs, but higher monthly payments. The specifics of how much interest you will pay over the life of the loan versus monthly payments will ultimately depend on the loan’s length and interest rate. Learn more and try out different choices with the explore interest rates tool from CFPB.

Loan Type: Some borrowers may qualify from loan programs through the Federal Housing Authority (FHA), U.S. Department of Agriculture (USDA), or Veterans Affairs (VA). Qualifying for any of these programs may affect your mortgage eligibility, down payment, interest rates, and other costs.

Interest Rate Type: Mortgages have adjustable or fixed interest rates. Monthly payments remain the same over the life of a fixed rate mortgage. Adjustable rate mortgages usually have lower initial interest rates; but interest rates are subject to change based on the market.

Points: Mortgage points, also known as discount points, are upfront costs paid directly to the lender in exchange for a lower interest rate. Paying for points is often a good choice for people who plan to live in their property for a long time.

Although these are not the only factors in determining your mortgage’s interest rate, they might be some of the factors you may not expect.

For more information on the Home Buying Process >> 

 

Source: Argent’s Financial Resource Center

What to do if you don’t make enough money at your job

February 23, 2018

Make More MoneyDo you believe you are underpaid? Are you fed up with not earning enough? Or, is your lack of income creating financial difficulty for you and your family?

Going to work every day and being paid less than you are worth can be emotionally and financially draining. Though you may not be able to secure the raise you think you deserve, you actually may have more control over your income than you think. Here are several things you can do if you don’t make enough money at your job.

  1. Create a list of achievements

Though you don’t get the final say on whether you get a raise, you can take some actionable steps to bolster the process of raising your income. One way to prove to your boss that you should get a raise is to keep track of your accomplishments.

If you don’t already track your work achievements, now is the time to start. Look back on the past year or so. What stands out as impressive? Did you improve a process or system? Save the company money? Take on an additional project?

Often, managers aren’t aware of exactly how much value their employees are providing to the company. They may be impressed, or even surprised, to find out just how much you have accomplished for the company. By creating a list of achievements, you are one step closer to earning a raise.

  1. Research salary data

What does someone with similar job responsibilities in your area earn? It’s important to have access to up-to-date salary data when making your case for a raise.

Every position has a going market rate. To avoid being unrealistic in what you’re asking for salary-wise, do your research in advance by using websites such as Glassdoor and Payscale.

  1. Take on additional work

Could your boss use help on some additional projects? Do you have the opportunity to earn overtime? Would taking on additional work help solidify your request for a raise?

Volunteering for additional projects often shows how serious you are about your career and helping your company succeed. And by asking for extra work, you are likely to grow your skills by working on something that isn’t a typical part of your job duties.

  1. Talk to your boss

Talking to your boss about your salary can be intimidating. But it doesn’t have to be.

Depending on your relationship with your boss, you may already have great rapport. Most managers expect that their employees want to be paid more, so the conversation won’t be as shocking to them as you may think.

Simply ask your boss how you can work to increase your value to the company. Sometimes, just knowing that you are interested in taking on more responsibility is the boost you need to get the salary increase you desire.

  1. Create an additional income stream

Creating an additional income stream outside your regular job is a great way to increase your income relatively quickly. Plus, you can typically earn money while doing something you enjoy.

Whether you choose to sell clothing, baby-sit, start a blog, do woodworking, or something else, there is no shortage of ways to earn money on the side.

  1. Slash your expenses

What’s the quickest way to find more money in your budget? Slash your expenses.

Take a look at your current monthly spending. What could you do without? Are there any expenses you could cut entirely? If you can’t cut them out, are there at least expenses you can lower?

  1. Start searching for a new job

What do you do if your current company won’t give you an increase in pay? It might be time to start searching for a new job.

You owe it to yourself to earn what you think you are worth. Sure, there are things you may enjoy about your current employer. But if you’re not earning enough to live comfortably, it’s time to see what new and better opportunities could be waiting for you elsewhere.

  1. Save all you can

If you are barely making enough money to cover your bills, you will need to budget very wisely and save whatever you are able to.

Emergencies happen, and if you aren’t earning enough income to comfortably make ends meet, it will be even harder to bounce back from an unexpected expense like a leaky roof or medical bill. Prepare yourself and protect your own finances by saving everything you can in an emergency fund.

  1. Network

You never know who could help you land your next gig. No matter where you are in your career, networking is key.

Start by going to a few networking events in your area, or getting involved with a new organization. Don’t forget to nurture your current network by keeping up with your peers and friends on social media and LinkedIn.

  1. Ask for support

Emotional support is one of the best, but most underrated tools at your disposal. Without having someone to encourage and push you, your mental health could suffer.

Talk to your family, friends, or partner about your finances, your goals, and your current position. Ask for their advice and let them know how they can help hold you accountable. Though it might not feel like it, everyone has gone through some financial stress in their life and can offer you some sort of emotional encouragement.

 

Source: WiseBread