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budgeting

Get a Quality Home or Mortgage With Big Thing Buying Skills

Home or Mortgage; Buying an Affordable Low Maintenance Home and Get a Quality Mortgage

YOUR BUDGET

The first thing you have to ask is, “How much house can we afford” The payments include P+I+T+I (principle+interest+taxes+insurance). Most of your payment will be principle and interest, taxes vary according to state, and insurance is not a very big cost.

But, you can figure it out with most online calculators. You have to know how to calculate P+I+T+I to get a quality home or mortgage.

You should be stable in your job or with your business before you decide to take the leap to sign on with a mortgage.  

Most banks want you to be on your job or in your business for a solid two years. Set up a file system for steps 1-8, don’t rush and do your research.

Home buying the right way take skill

Step 1

MORTGAGE COST

Below is a typical cost analysis of a home or mortgage with average tax state, always find out how much typical insurance and taxes are in your state before you decide your budget.

Choose a home price you think you can qualify for based on total payment. You will keep adjusting home price until you can find one that is close to your budget. Use my mortgage amortization calculator at LiveRichCalculators.

Say your home or mortgage costs are as follow:
$300,000  price of home
at, 4% interest
30 year
Taxes=6000/yr
Insurance=500/yr
Monthly Payment and Interest=1,432.5
Monthly Taxes and Insurance=541.67
Total Payment=$1,973.92

skills to manage money are essential, learn budgeting

Step 2

DOWN PAYMENT AND ESCROW COST

Find out what a typical down payment is at your credit union, bank, or mortgage company. Now, make sure you have the savings or start a savings account with the down payment and escrow cost.

If you find a buyer who is anxious to sell and they have a lot of equity in their home sometimes you can negotiate that they pay your buyer’s escrow cost.

For the example above the downpayment is:
5%=$15,000
A 1% escrow cost = $3000

Step 3

MAINTENANCE COST

Allow a monthly saving account for maintenance cost, most homes have maintenance repairs from time to time.

Old homes usually have a higher maintenance cost than newer homes, unless all electrical, plumbing and other major items replaced. The important aspect of a good home is a good inspection, preferably by tradesmen.

I prefer hiring an actual plumber, electrician, and carpenter to inspect your new home instead of one single home inspector. Some of those home inspectors only take a 6 month home inspection course.

The tradesmen work in the field every day for years. You should also do your own inspection with a moisture meter and electrical meter to see if there are any glaring defects.

If you place a marble on the floor does it roll or stay put, if it rolls you could have a damaged foundation. That is extremely expensive to repair. If you know the repairs you may be able to add those into your mortgage and fix after your move in.

Step 4

CREDIT REPORT

Get a copy of your credit report before you start to look for a home. Read it carefully. Some people are shocked at the mistakes that get on their credit report. Make sure you document the mistakes on your credit report and challenge them with Experian credit bureau.

Experian will usually send the corrections to the other bureaus. When all corrections are in place, get another copy of your credit report, and credit score. Getting an affordable, quality home or mortgage starts with a good credit report and high credit score.

Step 5

PAY OFF BILLS

You know what your bills are, and you know if they are excessive. You will need to find room in your budget for a mortgage. You don’t want a mortgage that increases your current bills per month too much.

Like you don’t want to get from $500 per month of rent to $1900 per month for a mortgage unless you have been saving at least $2500 per month so that savings will go into your mortgage.

You should also still have room for a savings account or two after you get a mortgage. You will need savings for home maintenance, car maintenance, and general emergencies. Pay off as many bills as possible before you start a mortgage.

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Step 6

SAVE FOR A DOWN PAYMENT AND CLOSING COST

Down payments are ranging anywhere from 5% to 10% down. The more you put down, of course, the lower your monthly payment will be. Then, there are buyers closing cost you must pay also. This is usually a surprise to new home buyers.

Closing cost is typically 2 to 5 percent of the purchase price. So, for a $300,000 home, the closing cost would be about $9,000.

Step 7

MORTGAGE RESEARCH

Before you decide to use a financial institute, do your research. If you have a credit union or local bank you do business with and you have good credit, it is usually relatively easy to get a loan at one of those places and you will save on additional cost that is charged by mortgage companies.

If you can’t get financing from your credit union or bank, research the best mortgage companies in your area. You can also ask friends and family who they had good luck with.

Before your visit anyone for a mortgage. Research mortgages, make absolutely sure you understand what a quality mortgage is. Know what the current rates are for a 15 year or 30-year mortgage.

Don’t allow anyone to give you a low-quality mortgage, if they think you have not done your research, some will try to give you a low-quality mortgage, even if you qualify for a high-quality mortgage.

If you qualify for a  low-interest high quality conventional low-interest rate 30-year mortgage, make sure you get one. The industry is full of nice, dishonest people, protect yourself.

Free printables for small business and personal use at MsFinancialSavvy; Daily Action Form, Budgeting Form, and Savings Form

Step 8

MORTGAGE RATES AND QUALITY

Call your local credit union or bank to get current rates on quality mortgages.

Use my mortgage calculators at LiveRichCalculators.

Use the department of housing website to read about various types of Mortgage Issues.

This is most of the information you need to purchase a quality home or mortgage if it is your first home or your second or third.

Get all the facts  to buy a quality affordable home with low maintenance.

Lois Center-Shabazz | Course Delta Agency
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Summary

Remember that buying a home is a serious process. You should take your time and be very methodical.

Some places have home prices that are outrageous – in that case, you may have to drive a long distance to get to work, by living in an affordable area further from your center of town.

Some towns have affordable housing compared to income. Take your time it may take anywhere from 6 months to 5 years to go through the process I list above.  Article Updated 2019

How to get a quality home or mortgage with big thing buying skills

Teach Your Teen to Budget, It Is Possible

Teach your teen to budget, it' possible.

Is it possible to teach your teen to budget? For some parents or guardians, the answer may be no. But, for others it is possible. If you have not spoiled your cute sweet little toddler into a mean selfish teenager, it is possible. Even if you have engaged in the “spoiled rotten” theory, you can still teach your teen to budget, but it will take considerably more work.

Here Are Three Tips to Teach Your Teen to Budget

START EARLY TO DEVELOP A STRONG CONNECTION

  1. The earlier you develop a strong emotional connection to your teen, the easier it will be to teach your teen to budget. Kids don’t need to be spoiled with things, to be happy. Things don’t make kids happy; but instead activities, hugs from parents, and talking to understand their concerns and helping them solve problems on a regular basis have proven to be major issues for happiness.

CHANGE THE WAY YOU THINK ABOUT THINGS

  1. For some strange reason, some parents think that if they give their teens all the material things they did not have, it will trigger massive happiness. If you had all of those “things” you would have seen that the lack of things was not the reason for your unhappiness when you are a teen. But instead, it is mostly the things that you cannot see that builds happiness.

TRY TO THINK LIKE A TEEN

  1. The only way you can find out how teens think, is to talk to many different teens. Teens want direction and clarification when it comes to making decisions. Teens also want to feel like they are important. What makes them feel important is first and foremost when parents appear that they care about them. The best way to make that clear is by telling them, you care about them and you love them. The second way is to guide them in what they do, and the third way is to make sure they are busy with activities where they make progress doing things they love like music, art or sports. The accomplishments make them feel important.

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Once you create the strong connection to your teen, it will allow you to create a strong connection to teach your teen to budget, by connecting the reason why they should budget along with you now and in the future.

It starts with saving money and why, then onto saving money and purchasing with a budget, to buy that which is affordable. Then, the reason a budget is necessary now and for life.

Lois Center-Shabazz | Course Delta Agency
Personal Finance: Author, Blogger, Course Creator, Money Strategist

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How Much You Budget What You Have Makes a Difference

It Starts With a Guerrilla Budget

I have had several people online contact me and say, “I never thought I needed a budget, much less a guerrilla budget” Most of them feel that budgets are for those who have a lot of money.

But, I am here to say, it does not matter how much you have, it’s how much you budget what you have. Rich people go broke all the time for the same reasons poor people go broke.

In my opinion, they both spend to much money for their income. Budgeting is a skill, the more you practice it the better you will get at it. So, start now, and perfect your budgeting skills.

How Much You ‘Budget What You Have’ Will Make a Difference by:


Saving Money

Budgets save you money in many ways. First, it encourages you to put savings in your budget I encourage those who don’t have much money to start with “the jar”. Place loose change in a jar once a week. Then go on to the second jar which is the dollar jar. You will place a few dollars in the dollar jar a week or every two weeks.

This will give you more of a cushion than the coins if something goes awry in your budget, like running out of food or needed extra gas. This will help to keep your budget in tack.

After your jars are full, open a savings account, then later, start automatic deduction from your payroll or checking account to your savings.

;Money, Understand that it is complicated, budgeting counts

Controlling Behavior

A budget controls your behavior by preventing you from randomly pulling out a credit card or spending on things you don’t need. When you pass the dress or shoe store your budget sense will tell you to keep going because those things are not in your budget.

When you get an email from a clothing store you purchased from in the past, your budget will tell you to delete the email, there is no reason to open it.

Ladies for peace of mind when you buy a car you must understand the rules.

Reducing Clutter

This may seem like common sense, but many people spend excessively and don’t realize it until there is so much clutter they can’t find a place to put their buys, or a place to use it.

It is only then, that many realize they are developing a hoarding personality. Creating a budget. and sticking to it will help tremendously to prevent over-buying, the fear  of hoarding and busting your budget, will encourage you to budget what you have.

Budgeting is not taught in most schools, many of your parents do not have a budgeting sense, so it is important to get it from other resources.Start with
my Car Buying Course for Women.

How much you budget what you have makes a difference

 

Lois Center-Shabazz | Course Delta Agency
Interested in a Free Discussion about how I can help you with Fantastic Finances? Let’s Chat – Make an Appointment Here

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Who Manages Your Personal Finances

who manages your personal finances

Who manages your personal finances? Seems like a silly question, but if you ask many people they will tell you, “no one, my money doesn’t need managing, I just pay my bills and spend what I can” I hear this quite often with those who make a lot of money and those who make a little money. They are clueless about the fine tuning of their budget and creating finances that will create money that lasts.

When I give meeting attendees just a few of my suggestions they are surprised at the information that will change their lives, and the information they did not have to create finances they needed. The following are three things you can do to improve your personal finances. This is part 2 in a four-part series I am writing this month on personal finance.


MANAGE YOUR OWN FINANCES

Managing your own personal finances is crucial. Why does that sound strange – most would say, of course, I manage my own finances? But, for many, that is not true. Wives let husbands manage all the family finances, and there are husbands that let wives handle all the family finances. Then, there are elderly people who allow adult children to manage their finances. There are even people who allow complete and total strangers to manage their finances since they are convinced they are not capable.

You can and you should manage your own finances – get personal with your finances and stay that way. Married couples should manage their finances together, and everyone else I mention should stay close and manage their own finances – this is the core of personal finance. If you don’t feel competent enough to manage your own finances, you should think seriously about finding the time or finding help learning how.


YOU CAN GET YOURSELF OUT OF DEBT

I have heard of folks turning their money over to a small business that manages their money to get them out of debt. You can get yourself out of debt if you got yourself into debt. It is ok to use someone to help you get out of debt but work with that person hands on. Don’t turn your money over to someone else to do it for you.

Not only should you not turn it over, but it is important that you stay close to the process so you can understand how to get out of debt and how to stay out of debt. Once you have an awareness that you are at a level of debt you should not be in, start to think of what got you there and create ways to stay clear of returning to debt.


UNDERSTAND YOUR FINANCIAL HABITS

Managing your finances and getting out of debt begins with an understanding of your personal finance habits. Some habits are so automatic, it is as if some are spending money with their eyes closed. They fail to understand the seriousness of their blind spending and the future implications. You know you are engaged in blind spending when you ask yourself at the end of the month, where did my money go?

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Money Saving Tips for Single Moms, When You Live on a Tight Budget

money saving tips for single moms

Nearly every single Mom eventually comes across this one question,  ‘how to save money with my one income?,  the answer to the question varies considerably from one person to another. The money saving tips working for a single mom would be different than a student, and a working professional and entirely different saving method would apply for a couple.  Being a single parent is not an easy job and it becomes more difficult when it comes to being a single Mom.  Life is not easy for Moms but when they have to play the dual room of bread-winner, and homemaker a bit of master-minding is in order. 

Maintaining good finances is always a tricky task for everyone, but this task becomes more challenging when there is one income. A single mother whether earning or not needs to take to laser focus on all her finances,  saving money will alleviate some of the stress in her plan. If you are a single Mom and looking  for solutions to save money, then you will benefit from this article,  as here I will present to you, one of the great “how-to’s”;  How to save money tailor-made for single moms, using these, money saving tips:

Saving Money on Groceries

Most Mom’s are responsible for grocery shopping, meal planning, and preparation, but a single mom is responsible for doing the same and making sure it is “cost effective”. A single mom can save money by

  • Planning the family meals in advance, because she can purchase in bulk, prepare in advance and freeze meals.
  • Cooking in bulk that can be used over a period of 2-3 weeks, freezing the excess, would help her save on cooking expenses apart from saving a lot of time and energy.
  • Purchase in-season vegetables and fruits
  • Avoid expensive cuts of meat as they will heavily increase your supermarket bills.

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The Second Hand Option!

Children are always full of demands, and I won’t be exaggerating if I say their demands are never-ending, that’s typical of kids. A  single mom needs to handle these demands without jeopardizing her monthly budget and savings. You can save a lot of money by buying used toys and clothes for their kids and, and even for yourself. And if second-hand clothes are not something you like, go in for recycling your clothes and save a lot of money on buying new ones. There are a number of shops that offer second-hand products used once or twice, and available at 30-50% of the original price. You can see that there are many options for saving money on clothes, you can think of others.

Look out for discounts and coupons

The life of a single mother is full of struggles and difficulties but shopping for discounts in major sales papers and online should be a major part of your shopping tour. Take advantage of shopping coupons, store loyalty, and reward points and make the most of your shopping by paying the lowest price possible for everything. You can go in for kid’s clothes shopping during sales at regular stores,  and  also  at deep discount retail shops in searching the best answers to ‘how to save money’.

Team up with other moms

There is one famous quote saying ‘Divided we fall, United we stand’  let this be an inspiration for single Moms everywhere. Befriend single Moms in your area and form a group where you can trade babysitting with other group members, which would not only save money but also foster support and friendship within the group. Organize group activities such as cooking and freezing, excursion trips, picnics to nearby places with kids and carpooling etc.

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Save on household bills

Household bills are a necessary evil, will always be with us, so they need to be dealt with efficiently. The process of saving money on household bills begins with cutting back on cell phones, cable, electricity and water bills. Single moms can take advantage of the internet to compare various cell phone plans and make sure you can constantly upgrade to the most discount friendly plan. Always ask your electricity, water or gas companies for a  subsidy or discount, as many companies give subsidized electricity and other amenities at lower rates to people belonging to certain income groups. As for electricity, don’t use what you don’t need. If there are cable channels you don’t use or can’t afford, cut those out of your cable package.

Get out of the debt trap

[sociallocker]Debt is considered to be an integral part of the lives of a single parent, especially the single Moms. Many people know that debt is actually the enemy of savings,  and in order to increase savings, you need to get work to get out of the debt trap as soon as possible. I suggest you replace your big car with a small one or a big house with an apartment or small manageable home.  Big assets acquired in the form of a  loan only adds to your liabilities and increases the outflow of your cash by the way of down payments and loan installments. Get rid of bigger loans with huge installment payments, and high-interest rates: and save up your monthly income for a healthy budget and securing your children’s future.

We are aware of the fact that as a single mom, you know the importance of money and savings. This is the reason you can see plenty of single moms working terribly hard from morning to evening in order to earn an income for their children. But sometimes finding answers to the question  ‘how to save money’ seems blurry even for the hardest working single moms,  this is the reason why we’ve given you the best workable tips for achieving the task. Take advantage of these money saving tips and see your budget consistently improve over time.[/sociallocker]

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Regards,
Lois

Save Money on Monthly Expenses in 10 Easy Ways

Save Money on Monthly Expenses

save money on monthly expenses in 10 easy ways

No matter what your income, on one wants to overspend on expenses. But, if you are on a budget, at some point the question comes into play – How to save money on monthly expenses.  The answer is not simple, though a little bit of behavioral change, can help you find a lot of ways to save  money on monthly expenses;  and therefore strengthening your finances. Here are 10 great ways, illustrating, some easy ways to save money on monthly expenses.

1. PHONE AND INTERNET FACILITIES

  •  Don’t keep several phone lines at home when you can use a single cell phone to receive most of your calls.
  • For internet packages, research different service providers and select a package based on your monthly service use.
  • Try to use a WiFi device to connect with multiple devices including tablets, cell phones, PC’s etc.
  • Use email and online chat to communicate with friends and associates to reduce costs on phone bills. Most landline phone services offer free long distance.

2. COUPON CODES 

Today you can find several legitimate sites flooded with lots of coupon codes, offering discounts, points to receive  free samples, free shipping offers, and much more. Sources like Groupon, are great to receive coupons for groceries, clothing, restaurants, and many other purchases. I caution you to make sure you absolutely need and can afford the discounted item. In other words, don’t get caught in the trap of purchasing items, just for the discounts. It is best to get manufacture coupons directly from the company or stores website to make sure they are legitimate.

3. DIY METHODS

Maid Services: Many people are busy, and therefore hire out home services. Some of the services are affordable, but some are not. One of the most common services hired on a regular basis is a  maid for cleaning services. You can place cleaning chores on a schedule and do your own household chores. This will require a bit of effort, but the weekly savings is substantial.

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Laundry Services: Do your own laundry. Some folks get so busy, they drop off laundry to have it done at a Laundry Mat. Do your own laundry, while you are watching TV or some other mundane activity. Dry cleaning is another story, some clothes must be dry cleaned, check to see if some of your dry cleanable clothes can be carefully hand washed to avoid the dry cleaning bill.

You can apply DIY methods in a lot of areas of  household tasks;  including general household painting, sewing your clothes or curtains, decorating your home, making small fancy items such as bags or belts.  Always make sure you have conducted detailed research before implementing DIY projects.  There is qualified research all over google.

4. ELECTRICITY BILLS 

Many people do not realize the importance of resorting to research, for saving money on electrical bills. If you are eager to know the many ways to save money on electrical bills, then here are a few tricks you can follow.

  •  During the winter you can keep the windows closed and let the light come in during the day, avoiding the use electrical lighting.
  • Some LED lights, chargers, and appliances are available with solar panels that help you charge devices or energize light,  using solar energy. This will help you save money on electrical bills.
  • While purchasing electronic appliances, choose products with a five-star rating that consumes minimal energy.
  • While using a water heater to warm up water for washing utensils, clothes, or bathing purposes, the maximum temperature required is 120 degrees. Lowering the temperature settings to this level helps to cut  cost on power usage. If you will be out of town for an extended period of time, you will definitely want to lower your hot water heater settings.
  • Always remember to turn off appliances when they are not in use, or switch off the lights when you are not in the room.

5. USE REWARDS CREDIT CARDS

There is competition among the credit card providers that prompt them to offer cash back and discounts on the products purchased using your card. Hence, if you are shopping in a  mall, you will have to pay the full  price if you opt for cash/check payment methods. A credit card, used sparingly, can help you save up to 15% to 30% through discount offers. I caution those who have spending addictions, to use cash instead, so they will not overspend. The airline rewards can be substantial if you are in a business of frequent travel or other business spending where a credit card is necessary.

6. REDUCE COST OF FUEL

The fuel costs are rising with undue intensity. Expenses on gas for cars, homes, and other uses can be controlled, but with work.

For saving money on cooking gas you can either use solar if you have the panels or use electrical kitchenware, such as a microwave or induction ovens to prepare food faster. Some municipalities offer a huge rebate for installing solar panels. In some cases, the rebate pays for the installation and cost.

While traveling to your office, schools and regular grocery shopping to locations near your home, avoid taking your car. Use public transportation facilities such as bus, train, tram etc. Alternatively, you can also establish a group of people who can travel in a single vehicle and share the fuel costs in a carpool.

 7. FOOD ITEMS 

You can save a lot of money limiting your expenses on daily grocery shopping.

Beverages: Avoid costly beverages at  coffee shops or restaurants. Opting for a simple cup of coffee over a Cappuccino, can save $3 per cup, or roughly or $90 to $180 per month on 1-2 cups of coffee.

Office Lunch: Try to carry your lunch from home. This costs around $5-$20 everyday compared to the cost of preparing lunch at home can save you as much as $5-$10 per day.

Shop for Ingredients: Always purchase unpacked fresh fruits, vegetables, and unprepared food. They are cheap and healthy too.

8. CLOTHES 

  •  Research the opportunities to buy clothes during seasonal sales for greater discounts.
  • Do not purchase too many clothes for daily wear that require dry cleaning.
  • While washing clothes use mild detergents, cold water, and avoid dryers. All of these will add to the longevity of your clothes.
  • Check your wardrobe before going out so that you purchase only necessary replacements. Save money by avoiding random and unplanned shopping, in other words — stay out of the stores, if you don’t absolutely need anything.

 9. SOCIALIZING 

Friends and relatives are of great importance to everyone. So sending gifts and messages on special occasions such as birthdays, marriages, Christmas etc. is extremely important. Try to purchase combo packages that cost less. Wrap your own gifts, it is cheaper. While ordering gifts online, always take the “free shipping” option. Purchase less expensive items,  and use coupons to reduce costs during the holiday shopping season. Create a holiday budget, and shop from your budget.

 10. ENTERTAINMENT

[sociallocker] Every year people spend a whole lot of money on watching TV, movies, reading books etc. The expenses with monthly cable bills, can be far more expensive than watching free TV online. Be selective in watching new films and use coupon codes to receive discounts on movie ticket prices.

For watching old movies, get free videos from your library. You can also get a library membership for reading books for free, of course and using their computers.

While passing through financial crunches, people often wonder- “How do I save money on monthly expenses”, on daily living, while at the same time, taking care of themselves of their family. A little bit of budgeting and wise spending can help you save a lot of money without compromising the essentials or your lifestyle.[/sociallocker]

——————–
Lois Center-Shabazz
author of, Live Rich Save Money! Budget Diary
Download “Budget Planner” Instantly  Now

author of, Live Rich Save Money! 68 Powerful Ways to Save Money, Now and Forever
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author of, Live Rich Save Money! Get Out of Debt Forever in 17 Amazing Ways
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save money on monthly expenses with easy budget planner

7 Ways To Save Money To Buy A House

7 ways to save money to buy a house

There are literally thousands of ways to save money to buy a house. Buying a house is not as difficult as you may think. First of all, you must understand that you “can’t have it all,” so discontinue that form of thinking. You must curtail your spending in other areas. Home prices are up all over the country, but you can still find affordable housing in the way of a cosmetic fixer (that is a fixer with no major repair problems), or anxious seller. Owning a home includes the monthly payment of P+I+T+I, translated, this is the principle, plus interest, plus taxes, plus insurance, which, added together, equals the total monthly payment.

Understanding the P+I+T+I for different loan amounts will enable you to better prepare for home ownership. For example, if you could afford $1400, total for a P+I+T+I monthly payment, determine what home cost would fall into this price range.

Search the Internet or anonymously call mortgage companies for quotes.To purchase a home there are home loans which require 0%, 3%, 5%, and 10% down, plus the closing cost. The lower the down payment, the better your credit should be, to get a reasonable interest rate. The standard down payment is about 10% plus escrow and closing costs.

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Ideas for saving for your new home could include:

1. Selling a car or furniture: Many of us have an extra car or a car with excessive monthly payments, insurance, and gas. Sell the car you are not using, or in the case of the overly expensive car, sell it to purchase an affordable model.

2. Get a part-time job and save the income for your home: Even if the job is every other weekend, it will help.

3. Temporarily discontinue a whole host of unnecessary things: movies, parties, vacations, clothes, cable TV, voice mail, newspaper, and excess clothes shopping.

4. Use your tax return: Put it in the bank toward your down payment. After purchasing your home, speak with an accountant; find out how many more exemptions you can take during the year, so you can use your future excess taxes (or home deduction) toward your current monthly payments.

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5. Use a windfall, such as an inheritance or large bonus: Take this money and place as much as you can afford on your down payment.

6. A few of you can live with your parents or in-laws while saving money: There are a few parents or in-laws who will be willing to work with you.

7. Ask for cash as gifts: When you have a birthday, graduation, wedding or any other celebration, explain to family members in advance that you are saving for a home.

As I said at the beginning, it is not as difficult as you think. Now that you have my list, you can also think of more ways in which you can save for a house, start with items 1-7, use the popular downloadable eBook; Live Rich Save Money! 68 Powerful Ways to Save Now and Forever in conjunction with Liver Rich Save Money! Easy Budget Planner, you can also download 17 ways to get out of debt.

7 ways to save money to save for a house

5 Ways to Become Rich Using These Good Habits

5 Ways to become rich using these good habits

Become Rich With Good, Honest, Hard Work to Start

Become rich, seems impossible. But when you consider the real definition, it is possible. Becoming rich defined as having all that you need and much of what you don’t. A surprising number of people don’t have most of what they need, and many who do, have very little excess or live paycheck to paycheck. Becoming rich, begins with hard work and ends with saving money.

Most folks will swear they work hard, including young folks. But, when questioned about researching the best jobs, working enough hours to get promoted, and constantly improving themselves with training and education, they admit being negligent.

The earlier you start working hard, the more likely you are to achieve financial success and end up with a job you like.

Also, you will have more time to save and accomplish your long-term goals when it comes to paying bills, general savings, and retirement savings. When you are young you have better health and more energy, and time to accomplish life long goals.


Don’t Over Invest in Education

In today’s educational climate, you can spend $10,000 living at home with no student loans, or $200,000 going away to college, with huge student loans, for the same degree that will get you the same job as the $10,000 degree. If you have rich parents who don’t mind paying the larger bill that is fine. But, to take out student loans on the larger college cost makes no financial sense at all, not to mention the emotional toll it will take on you trying to make those huge student loan payments for the next 25 years.

Those large student loan payments are amortized like a mortgage, which makes it even harder since the loan is paid over such a long period of time. Do your research, know the total cost of all colleges you are considering. List several colleges you or your child is interested in and include the cost of tuition, books, room and board, and then add 5% for hidden cost.

The more expensive the college is, the more loans you or your child will have to take out. Choose from the affordable colleges. Financial aid only covers about 80% of costs for the poorest students, so no matter what your financial level, you will always need to come up with some out of pocket money. The exception is if you are covered by a full scholarship, but these are rare.

Once you get a marketable degree, concentrate on getting a job after your training, instead of more degrees. Some people get multiple degrees, and deep in debt, only to find out the first college degree was perfectly adequate. Many who make the mistake of choosing a college with too much student loan debt find that to become rich they must first figure out how to get out of their student loan trap, paying down the debt.

Research Everything, Before You Buy

We were taught to do research in college, remember all of those late night college research papers, but now many of you do what I call the anti-research. The anti-research is when you approach sales people and ask them what you should buy. It is mysteriously the most overstocked item on the shelf since they need to make room for new stock. The most overstocked item may be such, due to high returns or bad reviews also.

Do your research about everything, especially big-ticket items such as cars, homes, home building, mortgages, colleges, and investment companies. I mention investment companies because of Bernie Madoff of Madoff Investments. Madoff was not a registered Investment Broker most of the time he was in business, but none of his victims checked at finra.org.

You can start your checking by calling the company you are interested in and asking a lot of questions, try to get a list of 10 questions, then search government websites to find information on the industry or company in question, check independent consumer sites for reviews, and last ask those who have used the company or services you are considering.

It is hard to get the truth about some companies because there is so much false information in circulation, but if you do your research you can be reasonably sure you will get most of the truth. Some buyers make purchases based on a “free-gift seminar”, buying anything based on a free gift is what I call high-risk buying. I call it high-risk because it is usually something you don’t need and the gift is charged back to you with your purchase, some buyers even sign long term loan commitments based on the seminar gift and presentation, only to regret it later.


Live Below Your Means

This sounds like it is good old fashion common sense, but one of the biggest reasons for foreclosures and bankruptcies is because many people believe in living above their means, until they realize the dangers. Living below your means, means you must use a budget planner to maintain a sustainable budget.

Living below your means, means that you will have a much greater chance of keeping your home or car if you get laid off your job or have to take a pay cut in some way. It also means you will have money freed up to save for important things, such as home maintenance, car repairs and
vacations.


Make Savings A Bill

You know what happens when you get a bill, you do everything you can to pay that bill, no matter what. Some bills are on automatic deduct, which makes them really easy to pay since you don’t even have to write a check. Do the same with savings, it is easy when you make it an auto deduct bill. Savings should include; emergency savings, extra to retirement savings, college savings, and vacation savings.

A habit that makes us poor is, every time we need money for these things, we borrow the money by charging them on high interest credit cards. The lowest credit card payment is amortized over a 20 year period. Sometimes it is necessary to use a credit card, like securing a hotel room, renting a car, or getting credit card points—just keep it within an affordable range, and use them sparingly. Make more than the minimum payment to get the balance paid off quickly.

When you have substantial savings based on monthly additions  to a few accounts, emergency, basic needs, vacation and retirement you will see yourself on the road to become rich beyond your wildest dreams.

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There are 5 ways to become rich using these good habits

10 Signs You Have Learned to Budget Your Money

You Have Learned to Budget Your Money

budget your money

1. You budget your money fiercely, whether it be monthly income, lump sum winnings, or inheritance.

For those who have a low level of financial experience, getting a windfall is more of a curse than a blessing. Ask some of the lottery winners, who recently hit the jackpot and five years later they have no money to speak of. The main problem they had was they didn’t even possess beginning money management skills. It starts with learning to establish a budget for everything within the confines of your income.

If you can learn to create a budget when your income is small, you can successfully budget your money when your income is big. It never ceases to amaze me how many people don’t understand this concept, they seem to feel it is the lack of money, not the lack of money management skills that cause most of their financial problems. Then they get a windfall and find they are out of money five years later due to mismanagement.


2. You balance your checkbook every single month, and therefore, budget your money, with your checkbook.

Balancing your checkbook gives you a lot of important information. First of all it tells you that all of the money you applied to bills has been paid, or is pending. It also tells you that the bank did not mix up your account information with another customer.

It  gives you a snapshot of how you allocated your money to your budget.  All of these things are important to balancing your checkbook, balancing your money and making sure you are on track to proper spending.


3. Your emergency fund is used for your emergencies only.

One of the most effective ways to budget your money, is to include an emergency fund in your budget planning. This means that you don’t loan your emergency fund money to anyone, including your kids. This is what happens to many folks who tell others of their fund.

Keep it secret and keep it for your emergencies. Don’t make yourself an emergency statistic by needing to borrow from others, after loaning out your rainy day fund. Borrowing for emergencies is just another way of creating unnecessary debt.


4. Your debt ratio is kept to a minimum or to zero.

Your debt ratio is low if your debts are low. The goal is to keep your debts low to avoid financial ruin when you have a catastrophic event in your life or if you need to borrow money for a home or car. The lower your debt ration the lower your interest rate on loans will be and the better your loan terms.


5. You carry only two credit cards, maximum.

Who needs mega-credit, no one. The more credit cards you carry, the higher the tendency to over spend. Credit cards are a necessary evil if you rent cars, travel and stay in hotels. Most car rental agencies and hotels will not do business with you without a credit card on file.


6. You allocate maximum dollar amounts to retirement and savings accounts.

This means you have a retirement account and a savings account. Treat them as they were a bill and its easy. If you have money auto deducted from your checking account or your payroll account, you won’t miss the money and it will appear to grow painlessly.


7. You don’t purchase major items based on gross income, but instead, base purchases on net take-home pay. (Ex. Car, home, furniture).

I have had a lot of folks tell me, “I bought this car or home based on my gross income, but now I am having trouble with payments”. The reason is that you can’t make payments from money you are not taking home.

Many companies take out employee tax, retirement, healthcare and miscellaneous items. Some finance companies base payments on gross income, this is confusing to an inexperienced buyer and creates a difficulty making payments. The best way to budget your money, is to know the money is there to budget.


8. You make extra payments (not minimum) to credit card companies monthly.

When you are billed for a credit card purchase, you are billed a minimum payment to stay in good standing with the company. This payment could stretch out to a balance of 20 years with added interest.

I suggest that, instead of paying the minimum payment due, you make that payment and then make an extra payment to principle to pay off the balance as quickly as possible.

9. You use your credit card only when necessary, and pay off the bill monthly, or as soon as humanely possible.

Don’t use credit cards for the sake of buying and accumulating “stuff” such as clothes, shoes and jewelry you don’t need. If you do, you will see your balance balloon out of control like you never imagined.

The balances grow exponentially when you are not “carefully” monitoring your purchases and if you don’t budget your money by paying off balances due.


10.You make sure that you are adequately insured in every category.

Many young people I talk to have gotten into trouble because they did not understand the devastation they could face without car insurance and health insurance, only to name a few. A minimum of liability car insurance that protects the other driver is required in most states, and health insurance is the law, you can get coverage at healthcare.gov.

You can be billed for hundreds of thousands of dollars for a hospital stay if you are not insured. Due to the governments Affordable Care Act, most Americans can afford to be insured through The healthcare marketplace.

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Excerpt from the book, “Live Rich Save Money! 68 Powerful Ways to Save Now and Forever”
by Dr. Lois Center-Shabazz.