Tag Archive Budgeting

ByCurtis Watts

Seven things college freshmen don’t need — and ten they do

This article originally appeared on NerdWalletThose ubiquitous checklists of “dorm room essentials” for college freshmen are filled with items that will be ditched by the end of first semester.

Some parents “go to the store and grab a list like they did when their kids were in elementary and high school and just go straight down the list,” says Lisa Heffernan, mother of three sons and a college-shopping veteran. Or they buy things they only wish their students will use (looking at you, cleaning products).

You can safely skip about 70% of things on those lists, estimates Asha Dornfest, the author of Parent Hacks and mother of a rising college sophomore who’s home for the summer.

What Not to Buy or Bring

Freshmen really need just two things, says Heffernan, co-founder of the blog Grown and Flown: a good mattress topper and a laptop.

Here are seven items you can skip:

  • Printer. Don’t waste desk space or, worse, store it under the bed; printers are plentiful on campus.
  • TV. Students may watch on laptops or on TVs in common areas or in someone else’s room. Bonus: Your teen gets out and meets others.
  • Speakers. Small spaces don’t require powerful speakers; earphones may be a good idea and respectful of roommates.
  • Car. Some colleges bar freshmen from having cars on campus or limit their parking. You also may save on insurance by keeping the car at home.
  • Luggage. If you bring it, you must store it. Heffernan suggests collapsible blue Ikea storage bags with zippers.
  • Toiletries to last until May. Bulk buying may save money, but you need storage space.
  • Duplicates of anything provided by the college, such as a lamp, wastebasket, desk chair or dresser.

Items left behind when students pack for the summer are telling. Luke Jones, director of housing and residence life at Boise State University, sees unopened food — a lot of ramen and candy — and stuffed animals and mirrors.

Jones says many students regret bringing high school T-shirts and memorabilia and some of their clothes (dorm closets typically are tiny).

What Can You Buy, Then?

Before you shop, find out what the college forbids (candles, space heaters, electric blankets and halogen lights are common). Have your student check with assigned roommates about appliances (who’s bringing a fridge or microwave?) and color scheme if they want to set one. Know the dimensions of the room and the size of the bed. And most of all, know your budget. Not everything has to be brand new.

Ten things — besides the all-important mattress topper and laptop — that many students consider dorm room essentials include:

  • One or two fitted sheets in the correct bed size, plus pillowcases. Heffernan says most students don’t use top sheets.
  • Comforter or duvet with washable cover.
  • Towels in a distinctive pattern or light enough for labeling with laundry marker, plus shower sandals.
  • Power cord with surge protector and USB ports.
  • Basic first aid kit.
  • Easy-to-use storage. If it’s a lot of work to get something out, your student won’t, Heffernan says.
  • Cleaning wipes. Students might not touch products that require multiple steps, but they might use wipes, according to Heffernan.
  • Reading pillow with back support for studying in bed.
  • Area rug. Floors are often hard and cold.
  • Comfort items. Dornfest says it could be a blanket or a picture of the dog — something from home that will make the space a bit more personal.

Afraid you’ll forget something important? You might, Heffernan says. But chances are, you or your student can order it online and get it delivered. Consider doing this with some items simply to avoid the hassle of bringing them yourself, and remember that “dorm necessities” often go on sale once school starts.

Do a Reality Check

If you or your student still want to replicate the rooms you’ve seen on Instagram and Pinterest, think about how the room will actually be used.

Once your son or daughter moves in, the room will never look like that again. Opt for sturdy items and be realistic. Will throw pillows make the place look more homey and inviting, or will they be tossed on the floor until parents’ weekend?

Dornfest, a co-host of the Edit Your Life podcast, offers a compelling reason not to make things too comfortable. “A freshman needs to be encouraged to get out of the dorm room,” she says. “Anything that pulls you into campus life can be good.”

She’s not advocating a monk-like environment, but rather one that encourages breaking out of routines. College should be a time to try new things and meet people from different backgrounds. Dornfest advises making the bed as comfortable as possible and keeping a few reminders of home. The ideal dorm room is more launch pad than cocoon.

More from Nerdwallet

  • Budgeting for College Students
  • How to Build Credit at 18
  • How to Choose a Student Credit Card

The article 7 Things College Freshmen Don’t Need — and 10 They Do originally appeared on NerdWallet.

Source: getrichslowly.org

ByCurtis Watts

Dear Penny: How Do I Save for Retirement on a Teacher’s Salary?

Dear Penny,

I’m 51 years old and don’t have a large nest egg. I’m a single parent with three kids. I’m a second career middle school teacher, so there is not a lot of money left over each month. 

How much money should I be saving to be able to retire in my 70s? Where should I invest that money?

-B.

Dear B.,

You still have 20 years to build your nest egg if all goes as planned. Sure, you’ve missed out on the extra years of compounding you’d have gotten had you accumulated substantial savings in your 20s and 30s. But that’s not uncommon. I’ve gotten plenty of letters from people in their 50s or 60s with nothing saved who are asking how they can retire next year.

I like that you’re already planning to work longer to make up for a late start. But here’s my nagging concern: What if you can’t work into your 70s?

The unfortunate reality is that a lot of workers are forced to retire early for a host of reasons. They lose their jobs, or they have to stop for health reasons or to care for a family member. So it’s essential to have a Plan B should you need to leave the workforce earlier than you’d hoped.

Retirement planning naturally comes with a ton of uncertainty. But since I don’t know what you earn, whether you have debt or how much you have saved, I’m going to have to respond to your question about how much to save with the vague and unsatisfying answer of: “As much as you can.”

Perhaps I can be more helpful if we work backward here. Instead of talking about how much you need to save, let’s talk about how much you need to retire. You can set savings goals from there.

The standard advice is that you need to replace about 70% to 80% of your pre-retirement income. Of course, if you can retire without a mortgage or any other debt, you could err on the lower side — perhaps even less.

For the average worker, Social Security benefits will replace about 40% of income. If you’re able to work for another two decades and get your maximum benefit at age 70, you can probably count on your benefit replacing substantially more. Your benefit will be up to 76% higher if you can delay until you’re 70 instead of claiming as early as possible at 62. That can make an enormous difference when you’re lacking in savings.

But since a Plan B is essential here, let’s only assume that your Social Security benefits will provide 40%. So you need at least enough savings to cover 30%.

If you have a retirement plan through your job with an employer match, getting that full contribution is your No. 1 goal. Once you’ve done that, try to max out your Roth IRA contribution. Since you’re over 50, you can contribute $7,000 in 2021, but for people younger than 50, the limit is $6,000.

If you maxed out your contributions under the current limits by investing $583 a month and earn 7% returns, you’d have $185,000 after 15 years. Do that for 20 years and you’d have a little more than $300,000. The benefit to saving in a Roth IRA is that the money will be tax-free when you retire.

The traditional rule of thumb is that you want to limit your retirement withdrawals to 4% each year to avoid outliving your savings. But that rule assumes you’ll be retired for 30 years. Of course, the longer you work and avoid tapping into your savings, the more you can withdraw later on.

Choosing what to invest in doesn’t need to be complicated. If you open an IRA through a major brokerage, they can use algorithms to automatically invest your money based on your age and when you want to retire.

By now you’re probably asking: How am I supposed to do all that as a single mom with a teacher’s salary? It pains me to say this, but yours may be a situation where even the most extreme budgeting isn’t enough to make your paycheck stretch as far as it needs to go. You may need to look at ways to earn additional income. Could you use the summertime or at least one weekend day each week to make extra money? Some teachers earn extra money by doing online tutoring or teaching English as a second language virtually, for example.

I hate even suggesting that. Anyone who teaches middle school truly deserves their time off. But unfortunately, I can’t change the fact that we underpay teachers. I want a solution for you that doesn’t involve working forever. That may mean you have to work more now.

Robin Hartill is a certified financial planner and a senior editor at The Penny Hoarder. Send your tricky money questions to AskPenny@thepennyhoarder.com.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Source: thepennyhoarder.com

ByCurtis Watts

How to Budget Groceries: 11 Easy Tips

Have you ever sat down to go over your budget only to find out that you’ve outrageously overspent on food? Local, organic, artisan goods and trendy new restaurant outings with friends make it easy to do. With food being the second highest household expense behind mortgage or rent, our food choices have a huge impact on our budget. Using this monthly budget calculator can also help guide how to budget for food. 

You may be surprised to find out that the most nutrient-dense foods are often the most budget-friendly. It’s not only possible, but fun and easy to eat nourishing, delicious food while still sticking to your budget. Here are 11 ways to help you learn how to budget groceries.

1. Track Current Spending

Before you figure out what you should be spending on food, it’s important to figure out what you are spending on food. Keep grocery store receipts to get a realistic picture of your current spending habits. If you feel inclined, create a spreadsheet to break down your spending by category, including beverages, produce, etc. Once you’ve done this, you can get an idea of where to trim down spending.

2. Allocate a Percentage of Your Income

How much each household spends on food varies based on income level and how many people need to be fed. Consider using a grocery calculator if you’re not sure where to start. While people spent about 30 percent of their income on food in 1950, this percentage has dropped to 9–12 today. Consider allocating 10 percent of your income to food as a starting point, and increase from there if necessary.

3. Avoid Eating Out

This is the least fun tip, we promise. Eating out is a quick and easy way to ruin your food budget. If you’re actively dating or enjoy going out to eat with friends, be sure to factor restaurants into your food budget — and strictly adhere to your limit. Coffee drinkers, consider making your favorite concoctions at home.

4. Plan Your Meals

It’s much easier to stick to a budget when you have a plan. Plus, having a purpose for each grocery item you buy will ensure nothing goes to waste or just sits in your pantry unused. Don’t be afraid of simple salads or meatless Mondays. Not every meal has to be a gourmet, grandiose experience.

5. Keep a Fridge Grocery List

Keep a magnetized grocery list on your fridge so that you can replace items as needed. This ensures you’re buying food you know you’ll eat because you’re already used to buying it. Sticking to a list in the grocery store is an effective way to keep yourself accountable and not spend money on processed or pricey items — there’s no need to take a stroll down the candy aisle if it’s not on the list.

6. Eat Before You Go to the Store

If your mother gave you this advice growing up, she was onto something: according to a survey, shoppers spend an average of 64 percent more when hungry. Sticking to a budget is all about eliminating temptations, so plan to eat beforehand to eliminate tantalizing foods that will cause you to go over-budget.

7. Be Careful with Coupons

50 percent off ketchup is a great deal — unless you don’t need ketchup. Beware of coupons that claim you’ll “save” money. If the item isn’t on your list, you’re not saving at all, but rather spending on something you don’t truly need. This discretion is key to saving money at the grocery store.

8. Embrace the Bulk Section

Not only is the bulk section of your grocery store great for cheap, filling staples, but it’s also the perfect way to discover new foods and bring variety into your diet. Take the time to compare the price of buying pre-packaged goods versus bulk — it’s almost always cheaper to buy in bulk, plus eliminating unnecessary packaging is good for the planet.

Bonus: a diet rich in unprocessed, whole plant foods provides virtually every nutrient, ensuring optimal health and keeping you from spending an excess amount on healthcare costs.

9. Bring Lunch to Work

Picture this: you’re trying to stick to a strict food budget, and one day at work you realize it’s lunchtime and you’re hungry. But alas, you forgot to pack a lunch. All the meal planning and smart shopping in the world won’t solve the work-lunch-dilemma. Brown-bagging your lunch is key to ensuring your food budget is successful. Plus, it can be fun! Think mason jar salads and Thai curry bowls.

10. Love Your Leftovers

Would you ever consider throwing $640 cash into the trash? This is what the average American household does every year — only instead of cash, it’s $640 worth of food that’s wasted. With millions of undernourished people around the globe, throwing away food not only hurts our budget but is a waste of the world’s resources. Tossing food is no joke. Eat your leftovers.

11. Freeze Foods That Are Going Bad

To avoid wasting food, freeze things that look like they’re about to go bad. Fruit that’s past its prime can be frozen and used in smoothies. Make double batches of soups, sauces, and baked goods so you’ll always have an alternative to ordering takeout when you don’t feel like cooking.

Sticking to a food budget takes planning and discipline. While it may not seem fun at first, you’ll likely find that you enjoy cooking and trying a variety of new foods you wouldn’t have thought to use before. Being resourceful and cooking healthfully is a skill that will benefit your wallet and waistline for years to come.

 

Sources: Turbo | Fool | Forbes | Medical Daily | GO Banking Rates | Value Penguin

The post How to Budget Groceries: 11 Easy Tips appeared first on MintLife Blog.

Source: mint.intuit.com

ByCurtis Watts

How to Save for Retirement in Your 20s, 30s, 40s, 50s and 60s

You probably don’t need us to tell you that the earlier you start saving for retirement, the better. But let’s face it: For a lot of people, the problem isn’t that they don’t understand how compounding works. They start saving late because their paychecks will only stretch so far.

Whether you’re in your 20s or your golden years are fast-approaching, saving and investing whatever you can will help make your retirement more comfortable. We’ll discuss how to save for retirement during each decade, along with the hurdles you may face at different stages of life.

How Much Should You Save for Retirement?

A good rule of thumb is to save between 10% and 20% of pre-tax income for retirement. But the truth is, the actual amount you need to save for retirement depends on a lot of factors, including:

  • Your age. If you get a late start, you’ll need to save more.
  • Whether your employer matches contributions. The 10% to 20% guideline includes your employer’s match. So if your employer matches your contributions dollar-for-dollar, you may be able to get away with less.
  • How aggressively you invest. Taking more risk usually leads to larger returns, but your losses will be steeper if the stock market tanks.
  • How long you plan to spend in retirement. It’s impossible to predict how long you’ll be able to work or how long you’ll live. But if you plan to retire early or people in your family often live into their mid-90s, you’ll want to save more.

How to Save for Retirement at Every Age

Now that you’re ready to start saving, here’s a decade-by-decade breakdown of savings strategies and how to make your retirement a priority.

Saving for Retirement in Your 20s

A dollar invested in your 20s is worth more than a dollar invested in your 30s or 40s. The problem: When you’re living on an entry-level salary, you just don’t have that many dollars to invest, particularly if you have student loan debt.

Prioritize Your 401(k) Match

If your company offers a 401(k) plan, a 403(b) plan or any retirement account with matching contributions, contribute enough to get the full match — unless of course you wouldn’t be able to pay bills as a result. The stock market delivers annual returns of about 8% on average. But if your employer gives you a 50% match, you’re getting a 50% return on your contribution before your money is even invested. That’s free money no investor would ever pass up.

Pay off High-Interest Debt

After getting that employer match, focus on tackling any high-interest debt. Those 8% average annual stock market returns pale in comparison to the average 16% interest rate for people who have credit card debt. In a typical year, you’d expect a  $100 investment could earn you $8. Put that $100 toward your balance? You’re guaranteed to save $16.

Take More Risks

Look, we’re not telling you to throw your money into risky investments like bitcoin or the penny stock your cousin won’t shut up about. But when you start investing, you’ll probably answer some questions to assess your risk tolerance. Take on as much risk as you can mentally handle, which means you’ll invest mostly in stocks with a small percentage in bonds. Don’t worry too much about a stock market crash. Missing out on growth is a bigger concern right now.

Build Your Emergency Fund

Building an emergency fund that could cover your expenses for three to six months is a great way to safeguard your retirement savings. That way you won’t need to tap your growing nest egg in a cash crunch. This isn’t money you should have invested, though. Keep it in a high-yield savings account, a money market account or a certificate of deposit (CD).

Tame Lifestyle Inflation

We want you to enjoy those much-deserved raises ahead of you — but keep lifestyle inflation in check. Don’t spend every dollar each time your paycheck gets higher. Commit to investing a certain percentage of each raise and then use the rest as you please.

Saving for Retirement in Your 30s

If you’re just starting to save in your 30s, the picture isn’t too dire. You still have about three decades left until retirement, but it’s essential not to delay any further. Saving may be a challenge now, though, if you’ve added kids and homeownership to the mix.

Invest in an IRA

Opening a Roth IRA is a great way to supplement your savings if you’ve only been investing in your 401(k) thus far. A Roth IRA is a solid bet because you’ll get tax-free money in retirement.

In both 2020 and 2021, you can contribute up to $6,000, or $7,000 if you’re over 50. The deadline to contribute isn’t until tax day for any given year, so you can still make 2020 contributions until April 15, 2021. If you earn too much to fund a Roth IRA, or you want the tax break now (even though it means paying taxes in retirement), you can contribute to a traditional IRA.

Your investment options with a 401(k) are limited. But with an IRA, you can invest in whatever stocks, bonds, mutual funds or exchange-traded funds (ETFs) you choose.

Pro Tip

If you or your spouse isn’t working but you can afford to save for retirement, consider a spousal IRA. It’s a regular IRA, but the working spouse funds it for the non-earning spouse. 

Avoid Mixing Retirement Money With Other Savings

You’re allowed to take a 401(k) loan for a home purchase. The Roth IRA rules give you the flexibility to use your investment money for a first-time home purchase or college tuition. You’re also allowed to withdraw your contributions whenever you want. Wait, though. That doesn’t mean you should.

The obvious drawback is that you’re taking money out of the market before it’s had time to compound. But there’s another downside. It’s hard to figure out if you’re on track for your retirement goals when your Roth IRA is doing double duty as a college savings account or down payment fund.

Start a 529 Plan While Your Kids Are Young

Saving for your own future takes higher priority than saving for your kids’ college. But if your retirement funds are in shipshape, opening a 529 plan to save for your children’s education is a smart move. Not only will you keep the money separate from your nest egg, but by planning for their education early, you’ll avoid having to tap your savings for their needs later on.

Keep Investing When the Stock Market Crashes

The stock market has a major meltdown like the March 2020 COVID-19 crash about once a decade. But when a crash happens in your 30s, it’s often the first time you have enough invested to see your net worth take a hit. Don’t let panic take over. No cashing out. Commit to dollar-cost averaging and keep investing as usual, even when you’re terrified.

Saving for Retirement in Your 40s

If you’re in your 40s and started saving early, you may have a healthy nest egg by now. But if you’re behind on your retirement goals, now is the time to ramp things up. You still have plenty of time to save, but you’ve missed out on those early years of compounding.

Continue Taking Enough Risk

You may feel like you can afford less investment risk in your 40s, but you still realistically have another two decades left until retirement. Your money still has — and needs — plenty of time to grow. Stay invested mostly in stocks, even if it’s more unnerving than ever when you see the stock market tank.

Put Your Retirement Above Your Kids’ College Fund

You can only afford to pay for your kids’ college if you’re on track for retirement. Talk to your kids early on about what you can afford, as well their options for avoiding massive student loan debt, including attending a cheaper school, getting financial aid, and working while going to school. Your options for funding your retirement are much more limited.

Keep Your Mortgage

Mortgage rates are historically low — well below 3% as of December 2020. Your potential returns are much higher for investing, so you’re better off putting extra money into your retirement accounts. If you haven’t already done so, consider refinancing your mortgage to get the lowest rate.

Invest Even More

Now is the time to invest even more if you can afford to. Keep getting that full employer 401(k) match. Beyond that, try to max out your IRA contributions. If you have extra money to invest on top of that, consider allocating more to your 401(k). Or you could invest in a taxable brokerage account if you want more flexibility on how to invest.

Meet With a Financial Adviser

You’re about halfway through your working years when you’re in your 40s. Now is a good time to meet with a financial adviser. If you can’t afford one, a financial counselor is typically less expensive. They’ll focus on fundamentals like budgeting and paying off debt, rather than giving investment advice.

A woman waves her hands in the air as she overlooks a mountainous view in Alaska.

Saving for Retirement in Your 50s

By your 50s, those retirement years that once seemed like they were an eternity away are getting closer. Maybe that’s an exciting prospect — or perhaps it fills you with dread. Whether you want to keep working forever or retirement can’t come soon enough, now is the perfect time to start setting goals for when you want to retire and what you want your retirement to look like.

Review Your Asset Allocation

In your 50s, you may want to start shifting more into safe assets, like bonds or CDs. Your money has less time to recover from a stock market crash. Be careful, though. You still want to be invested in stocks so you can earn returns that will keep your money growing. With interest rates likely to stay low through 2023, bonds and CDs probably won’t earn enough to keep pace with inflation.

Take Advantage of Catch-up Contributions

If you’re behind on retirement savings, give your funds a boost using catch-up contributions. In 2020 and 2021, you can contribute:

  • $1,000 extra to a Roth or traditional IRA (or split the money between the two) once you’re 50
  • $6,500 extra to your 401(k) once you’re 50
  • $1,000 extra to a health savings account (HSA) once you’re 55.

Work More if You’re Behind

Your window for catching up on retirement savings is getting smaller now. So if you’re behind, consider your options for earning extra money to put into your nest egg. You could take on a side hustle, take on freelance work or work overtime if that’s a possibility to bring in extra cash. Even if you intend to work for another decade or two, many people are forced to retire earlier than they planned. It’s essential that you earn as much as possible while you can.

Pay off Your Remaining Debt

Since your 50s is often when you start shifting away from high-growth mode and into safer investments, now is a good time to use extra money to pay off lower-interest debt, including your mortgage. Retirement will be much more relaxing if you can enjoy it debt-free.

FROM THE RETIREMENT FORUM
Military pension & SS
1/5/21 @ 2:55 PM
D
Re-locating
1/5/21 @ 2:53 PM
Trish Young
TSP and mortgage
12/23/20 @ 2:41 PM
J
See more in Retirement or ask a money question

Saving for Retirement in Your 60s

Hooray, you’ve made it! Hopefully your retirement goals are looking attainable by now after working for decades to get here. But you still have some big decisions to make. Someone in their 60s in 2021 could easily spend another two to three decades in retirement. Your challenge now is to make that hard-earned money last as long as possible.

Make a Retirement Budget

Start planning your retirement budget at least a couple years before you actually retire. Financial planners generally recommend replacing about 70% to 80% of your pre-retirement income. Common income sources for seniors include:

  • Social Security benefits. Monthly benefits replace about 40% of pre-retirement income for the average senior.
  • Retirement account withdrawals. Money you take out from your retirement accounts, like your 401(k) and IRA.
  • Defined-benefit pensions. These are increasingly rare in the private sector, but still somewhat common for those retiring from a career in public service.
  • Annuities. Though controversial in the personal finance world, an annuity could make sense if you’re worried about outliving your savings.
  • Other investment income. Some seniors supplement their retirement and Social Security income with earnings from real estate investments or dividend stocks, for example.
  • Part-time work. A part-time job can help you delay dipping into your retirement savings account, giving your money more time to grow.

You can plan on some expenses going away. You won’t be paying payroll taxes or making retirement contributions, for example, and maybe your mortgage will be paid off. But you generally don’t want to plan for any budget cuts that are too drastic.

Even though some of your expenses will decrease, health care costs eat up a large chunk of senior income, even once you’re eligible for Medicare coverage — and they usually increase much faster than inflation.

Develop Your Social Security Strategy

You can take your Social Security benefits as early as 62 or as late as age 70. But the earlier you take benefits, the lower your monthly benefits will be. If your retirement funds are lacking, delaying as long as you can is usually the best solution. Taking your benefit at 70 vs. 62 will result in monthly checks that are about 76% higher. However, if you have significant health problems, taking benefits earlier may pay off.

Pro Tip

Use Social Security’s Retirement Estimator to estimate what your monthly benefit will be.

Figure Out How Much You Can Afford to Withdraw

Once you’ve made your retirement budget and estimated how much Social Security you’ll receive, you can estimate how much you’ll be able to safely withdraw from your retirement accounts. A common retirement planning guideline is the 4% rule: You withdraw no more than 4% of your retirement savings in the first year, then adjust the amount for inflation.

If you have a Roth IRA, you can let that money grow as long as you want and then enjoy it tax-free. But you’ll have to take required minimum distributions, or RMDs, beginning at age 72 if you have a 401(k) or a traditional IRA. These are mandatory distributions based on your life expectancy. The penalties for not taking them are stiff: You’ll owe the IRS 50% of the amount you were supposed to withdraw.

Keep Investing While You’re Working

Avoid taking money out of your retirement accounts while you’re still working. Once you’re over age 59 ½, you won’t pay an early withdrawal penalty, but you want to avoid touching your retirement funds for as long as possible.

Instead, continue to invest in your retirement plans as long as you’re still earning money. But do so cautiously. Keep money out of the stock market if you’ll need it in the next five years or so, since your money doesn’t have much time to recover from a stock market crash in your 60s.

A Final Thought: Make Your Retirement About You

Whether you’re still working or you’re already enjoying your golden years, this part is essential: You need to prioritize you. That means your retirement savings goals need to come before bailing out family members, or paying for college for your children and grandchildren. After all, no one else is going to come to the rescue if you get to retirement with no savings.

If you’re like most people, you’ll work for decades to get to retirement. The earlier you start planning for it, the more stress-free it will be.

Robin Hartill is a certified financial planner and a senior editor at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to DearPenny@thepennyhoarder.com.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Source: thepennyhoarder.com

ByCurtis Watts

How to Prepare For Closing Day [Free Downloadable PDF]

After you’ve successfully put in an offer for your dream home and set a date for closing, you’ve come to the final steps of your home buying journey. However aside from getting the keys, you’ll want to be prepared for the additional costs, and steps that will be required for a successful home purchase.

The Preparing For Closing Day guide contains information, tips, and more about what to expect on the big day. The guide will also include a checklist of what to prepare and an example of how to calculate the funds needed for closing.

To learn more about how you can best prepare for closing day, get our free buyer’s guide here.

Pre-Closing Day Checklist

To ensure a smooth process for your home transaction, you’ll still have a few steps to go through before you get your keys. Here are 6 steps to check off your list before closing day:

  1. Review your contract
  2. Complete a final walkthrough
  3. Meet with your lawyer
  4. Purchase home insurance
  5. Know how much cash is required at closing
  6. Secure cash required for closing

Cash Required At Closing

Understanding the costs that will be required at closing day is important to know even before you start your home search. Not only will you be prepared for what to expect, but this can help you with budgeting your costs.

Some examples of costs to include in your calculation:

  • Down payment
  • Title insurance
  • Legal fees
  • Land transfer tax

Statement of Adjustments

Another important document is your statement of adjustments, which will display any credits to both the buyer or seller as well as the final amount payable by the buyer on closing day. You can expect the following to be listed in the statement:

  • Purchase price
  • Your deposit
  • Prepaid property taxes, utilities or fuel
  • Prepaid rents 
  • Appraisal fee
  • Land survey fee

For a sample calculation of cash required at closing, download our Preparing For Closing Day guide here.

The post How to Prepare For Closing Day [Free Downloadable PDF] appeared first on Zoocasa Blog.

Source: zoocasa.com

ByCurtis Watts

How to Plan a Budget If Your Home Is a Fixer Upper

When your home is a fixer-upper, it can be difficult to even know where to start with a renovation. The list can be overwhelming—fix the patio, change out the mustard yellow carpet, buy furniture, paint the house. With a never-ending to-do list, planning a budget can seem virtually impossible.

By sorting through your list of wants and needs and focusing on essentials, you can outline a budget that won’t keep you up at night. Here are some tips on how to plan a budget for turning your fixer-upper into your first dream home.

How to Plan a Budget If Your Home is a Fixer Upper

1. Sort through the “wants” and “needs.”

Where do you even start with a renovation budget? With a limited fixer-upper budget, it’s essential to make functionality the first priority. When the roof is leaking and your fridge is dead, this is where the budget begins. First, determine what infrastructure items require repair or an essential upgrade, as these are typically big-ticket items. Next, focus on beautifying projects that will reap benefits in the long run, like bathrooms and kitchens. Hold off on budgeting fancy appliance upgrades and expensive decor if you already have working items—these can come at a later time after you take care of all the essentials.

How to Plan a Budget If Your Home is a Fixer Upper

2. Consider purchasing used over new.

Give your budget more flexibility by going for used over new with certain big-ticket items. Used appliances, for instance, can be found in great condition from other remodels or homeowners upgrading to the latest technology. Used furniture is also a fantastic way to keep your fixer-upper budget low. Don’t forget—sofas, vintage chairs, tables and more can be easily reupholstered and refinished. They’ll look brand new for just a fraction of the cost. 

How to Plan a Budget If Your Home is a Fixer Upper

3. Be ready to DIY with a gift card.

As a first-time buyer, there’s a 99 percent chance you’ll be diving into the realm of DIY. Learning one or many DIY skills will not only come in handy with home repairs in the future, but it’s a fantastic way to keep labor costs low. If you’re worried your DIY supply budget will get out of hand, however, shop with a gift card to your local hardware store. That way, you’ll always be working with a fixed amount of money and won’t be tempted to add on any expensive extras. It’s a guaranteed way to keep your budget in check.

How to Plan a Budget If Your Home is a Fixer Upper

4. Get creative.

Fixer-uppers are great hands-on projects, and creative solutions are key for keeping your budget in line. For items like cabinetry that may be in good condition but out of style, get creative with refinishes to bring new life into your space. Give your kitchen a fresh take by painting cabinets in a modern shade, or reface them for a whole new look without the added cost of all-new cabinetry. Replace hardware on cabinetry, furniture and built-ins to make your pieces feel brand new. Even outdated fireplaces, doors, furniture and windows can go a long way with a fresh coat of paint and new hardware. Consider this cheap alternative to help save room in your budget for the fun stuff.

How to Plan a Budget If Your Home is a Fixer Upper

5. Let the professionals help.

Whether you’re starting with the kitchen or diving into a full-scale remodel, don’t be afraid to seek professional help. No matter what your budget, a professional’s advice can help ensure that your renovation has as few hiccups as possible. City codes, minute details and hidden elements can wreak havoc on projects, so let a master guide you through those hurdles instead of trying to blindly tackle them yourself. Don’t let the potential price tag deter you from investing in having expert guidance—many architects and designers have options for paying an hourly rate. This is a great option, especially for fixer-upper and DIY projects, as it allows your plans to be looked over by professionals without the price tag of a full design scope. 

What are your must haves for your fixer-upper?
 
 
Kerrie Kelly is a California interior designer who has helped many young couples choose their “first-home-together” decor. Kerrie writes on her design experiences for The Home Depot, offering homeowners ways to save money without compromising design.
 

Source: quickanddirtytips.com