Reach Financial Dream of Home Ownership
Chances are if you set goals for the new year, one of them is to improve your financial wellness. According to the 2020 Pinterest 100 Report, improving our relationship with money will be one of the most popular trends of the year. It’s not surprising since, for many of us, managing our money is a challenge.
Save Money to Buy a Home
The challenge is to find the yin and the yang of responsible financial management. You cannot put a value on the ability to drift off to sleep without worrying about paying the bills, crushing credit card debt, finding the money to buy a home, or having a secure retirement. So how do we achieve financial peace of mind? We set goals and then implement a plan to achieve them. According to the Pinterest report, the most popular money goals were budgeting, paying off debt, saving, and investing. Thankfully, there are many tools and tricks available to help us reach those goals and secure our economic future. We can do this! Yea us!
Creating a Budget
The budget is the foundation upon which your financial plan rests. I think of it as the roadmap where I can plan the best route to get where I need to be in terms of my goals. To gain control over your money, you must know how much is coming in and where you spend it. There are several techniques to help you keep track.
Saving Money to Buy a House in MN is not Easy
Let’s be honest. Spending money is fun, and for some, shopping is a sport. But when the packages from Amazon are coming every week, and you’re spending all of your discretionary income, you might want to consider changing the way you handle finances. No one was born with the saving gene. Saving is a behavior we learn. Many of us have been on the saving path since childhood because our parents encouraged us to save. But if that is not the case, as an adult you can modify your spending patterns and experience the joys of saving.
Starting to Save Money for a Down Payment
An excellent starting point is to change how you think and feel about money. Don’t consider saving a sacrifice, but instead think of it as a means to a better future. Once you start practicing some of the savings strategies I’m going to share, you might be surprised to discover how good you are going to feel about having some money in the bank.
Numbers to Know Before Buying a Home MN
Recently a friend told me she was never good with finances and never really cared until the day she wanted to buy a home and discovered she didn’t qualify for a mortgage. For her, it was a great wakeup call, and she got up to speed pretty quickly. About a year later, she moved into her condo. Today, she not only knows all her financial statistics, but she tracks them regularly.
So just what are these numbers we should know, and why are they important? As you plan for your future, these vital financial statistics will show you where your finances are healthy and also the areas where your finances need improvement. If your life plan includes buying a home, putting your kids through college, or retiring early, these numbers will be the guideposts along your path.
Before you Buy a Home, Know Your Credit Score
What exactly is a credit score? It a snapshot of an individual’s entire credit history translated into a numeric value. This number is used by lenders to help them determine if you are creditworthy. The score is calculated by FICO (Fair Isacc Corporation) using data provided by the three credit reporting bureaus, Experian, Transunion, and Equifax. In addition to your FICO Score, another commonly used is a Vantage Score.
Why is this score important? Like your shadow, it follows you everywhere. It is not only a major determining factor in getting...
Saving to Buy a House in MN
For some of us, taking control of our finances is a challenge. One crucial element of the process is saving money. Americans are not very good savers. According to Bankrate, 58 percent of us have less than $1000 in savings. Many of us are in that 58 percent because saving was not a habit we learned as children, but it is one we can embrace as adults. We can develop and nurture positive saving habits with the right motivation and inspiration.
Do not save what is left after spending, but spend what is left after saving. – Warren Buffet
If you have a 401K benefit with a company match from your employer, make sure you have the maximum amount deducted from your paycheck to take full advantage of the matching funds. Your 401K should be one of the significant elements of your retirement savings. The added benefit of the 401K savings is the money is not taxed until you take it out of your account.
Take Saving For your First Home in MN up a Notch
Deduct a fixed amount from your salary to your emergency fund, down payment for a home fund, vacation fund, or whatever other goals you have established for your money. Consider saving as a bill you pay to yourself first. Annual income twenty pounds, annual...
Use a Budget to Control Your Money
When we gain control over our finances, lots of positive outcomes will follow. The door to new opportunities will open to us, and we will have more lifestyle choices to consider. How exactly do we control our money? We set financial goals, and then we monitor our spending, keep a limit on debt, save regularly, and invest wisely to achieve those goals. The very first step on the journey is following a budget.
A Budget is Powerful
A budget is a map we follow on the road to establishing a positive relationship with our money. With a budget, we can better plan how to spend if we know how much we have left after we pay all the bills. When we have a snapshot of our spending habits, we will be more likely to use discrimination in our purchases.
We need a budget because it is critical to keep our financial house in order as we build our future. Budgeting can help you rent and furnish your first apartment, or buy your first home, take a vacation, and begin planning for retirement. (Honestly, it’s never too soon) That is powerful stuff!
We all need a tool to keep track of income and expenses because it’s critical to know where our money goes every month. There is a richness of apps available to help you monitor your finances, such as Mint,...
5 Ways to Improve Your Relationship with Money
Our relationship with money generally begins at a very young age. That connection is very simplistic. We want stuff. We use money to get stuff. We get the money that gets us the stuff from our parents, grandparents, or any family member that happens to be handy at the moment with a few bucks in hand. We are not particular.
Fast forward, and we grow up. Hopefully, along the way, our parents teach us some fundamental money management skills because if as adults, we don’t have some control over our finances, they will control us. The result is mounting debt and sleepless nights worrying how we are going to pay it down.
Money Management is an Acquired Skill
If I’ve just described your situation, don’t take it as a personal judgment. You are not alone. Americans have a problem with handling their finances. Need proof? Look at the 2008-2009 real estate market crash where 3.9 million Americans faced foreclosure. We collectively owe $1.5 trillion in student loans and another $1.4 trillion in credit card debt. To make matters worse, 60 percent of Americans cannot cover a $1000 emergency expense, and nearly 45 percent of baby boomers (aged 55-73) have no retirement savings.
Maybe you are a rock star at handling your money, and you feel a bit smug. Kudos to you and I say that with respect and sincerity. Adulting is hard work. But if you feel like inserting your head in a gallon of chocolate ice-cream right now, please read on. The development of a fiscally responsible lifestyle is an...
A FICO Score Explained By MN Realtor
By the time you experience initiation into the adult world, you've probably heard the term credit score. It’s a number you should be concerned about because other’s will be. They will use it to judge your ability to pay back a loan.
So who cares about your credit score exactly? Credit card companies, banks, mortgage brokers, cell phone companies, insurance companies, and landlords, to name a few. Some companies even want to look at your credit score before offering you a job to see how responsible you are.
How is Your Credit Score Calculated
Your credit score is a number that captures your creditworthiness based on your credit history. Three major credit bureaus, Experian, Equifax, and TransUnion, track your financial information. The Fair Isaac Corporation takes this data and uses a model to assign a number known as a FICO score. Most creditors use this score to evaluate you when you apply for a loan such as a mortgage.
Passive Saving Puts More Money in Your Bank Account
Sadly, Americans are not good savers. A survey done last year by GOBankingRates found that 69% of us have less than $1000 in savings while 34% live paycheck to paycheck and have no savings whatsoever. This holds true for Millennials as well and considering the fact that approximately 66% of them have a student loan to pay with an average balance of $40K, we need to do better.
By the time we reach adulthood, saving should be a regular habit in our lives. We will need money to purchase our first home, then to save for our children’s education, and for our retirement. But given the statistics stated above, it is evident that for way too many of us saving money is not easy. When we think of saving, it conjures up words like austerity, frugality, deprivation and we make a face like we just bit into a lemon. What if I can show you there is a way to start saving that is painless. It’s called “passive saving” as opposed to “active saving”.
“What exactly is passive saving?” you ask skeptically, feeling sure I am about to scam you into leading a life of sacrifice. Passive saving is not changing your consuming habits or lifestyle. It means not giving up pleasures or activities you currently engage in or those nice things you like, but it does mean making changes in how you purchase them and from whom. Once you...