In January 2017, President-elect Donald Trump will assume his position in office as the 45th President of the United States. Whether this was the election outcome you expected or not, it shouldn’t interfere with your ability to achieve your financial goals. The best thing you can do is financially prepare yourself for the Trump presidency by informing yourself of his proposed policies and aligning your money (and your actions) with your future goals. Here are some ways to financially prepare for the Trump administration. Read More
The topic of life insurance can often conjure uncomfortable feelings. Some may even be intimidated by the thought of purchasing a life insurance policy. Why? We primarily like to avoid thinking about our expiration dates, but it’s an inevitable fact of life. If you fail to plan properly, your loved ones may incur debt or resort to creating GoFundMe campaigns to cover funeral expenses.
Since launching the site in 2013 my goal has been to consistently serve you, the readers. I’ve since noticed a lapse, particularly when it comes to home-ownership. Let’s be real, I live in New York City and we have a few home-ownership challenges that I do not care to navigate at the time. I’m also still deciding if home-ownership is right for me and my fiancé at this time.
However I know that many of you are considering home ownership at this juncture in your lives. For that reason I’ve connected with the great folks at Zillow.com to occasionally guest post well-researched, useful articles related to home-ownership. Enjoy!
by Jennifer Riner for Zillow.com
Zillow predicts financially-minded millennials will be this year’s largest home buying demographic, overtaking the top spot previously occupied by Generation X. And since a home is likely the largest purchase of one’s lifetime, it’s vital to prepare accordingly.
Implement the following home buying best practices to eradicate costly or unforeseen hurdles.
1.Offer a sizable down payment
Down payments consist of an upfront lump sum that buyers must provide before closing. Financial experts typically recommend financing at least 20 percent of a home’s purchase price to avoid private mortgage insurance (PMI) on a conventional mortgage loan. PMI is designed to protect lenders in case borrowers default on their mortgage payments.
Homeowners who lack 20 percent in savings will pay PMI along with their regular monthly mortgage payments until their loan-to-value ratios are at least 80 percent. PMI interest rates hover around $30 to $70 per month per every $100,000 borrowed, depending on credit history and the amount the borrower is able to put down on the loan.
For example, assume you’re searching for a home in Dallas where the median list price on for-sale homes is $250,000. If you can’t accumulate $50,000 and wish to purchase the home with a smaller down payment, expect to owe around $125 on top of your regular mortgage bill each month, which might be around $1,230 per month assuming you qualify for a 3.64 percent interest rate on a 30-year fixed mortgage.
If you don’t have the standard 20% down, use a mortgage calculator to determine your potential PMI cost per month. PMI costs do not contribute toward the principal on a home, they are strictly interest incidentals.
2. Research your market
Studies show the best housing markets for first-time buyers are those with strong income growth among residents in their 20s and early 30s, with an increasing number of affordable homes on the market.
Buyers in Pittsburgh, Chicago and Atlanta offer cost-effective opportunities for first-time homebuyers this year. Due to expensive rentals and affordable loans rates in almost half the U.S., buying appears to be more affordable than renting after an average of two years.
2015’s Best Homebuyer Markets for Millennials
- Pittsburgh, PA
- Chicago, IL
- Las Vegas, NV
- Atlanta, GA
Make sure you check out the local median sale price versus the Zillow Home Value Index, and compare these numbers to national rates.
3. Ask an agent
Although online listings simplify the house hunting process, they don’t replace the need for knowledgeable and experienced real estate agents. Agents understand their target markets and the potential return on investment (ROI) after building equity in your home.
While you may have already set your budget, home type and interior design preferences, agents facilitate negotiations, provide access to financing resources and define housing trends that discourage inexperienced buyers from investing in unfavorable properties.
4.Think it through
Is this the best time to buy for you?
Home ownership isn’t right for everyone, no matter how orderly their finances are or the current real estate market. After you’ve saved 20 percent and calculated potential mortgage costs, you need to think of additional expenses such as closing costs, which range from 3 to 5 percent of a home’s purchase price.
Closing costs consist of commissions, fees associated with general loans, titles, government records and settlements. Individuals’ closing costs vary, since sometimes sellers agree to cover these incidentals – especially if they receive their full asking price on their homes. Other long-term costs to take into consideration are like lawn care, appliance replacement and HVAC system maintenance. These extra fees add up quickly, and many young buyers forget to factor them into their monthly budgets, focusing primarily on mortgages alone.
The truth is, sometimes it’s just not the right time to settle down and buy a home. A financially-minded young professional with a 20 percent down payment available in savings may prefer to travel the world. A 30-year-fixed mortgage is a long-term commitment, and unless you can pay off your principal quicker than anticipated or sell for profit early on, you’ll owe your lender for a while. Renting is expensive and may not provide long-term ROI, but offers an unparalleled amount of freedom in terms of housing options.
Today’s Guest post comes from Kara Stevens of The Frugal Feminista, 1/5 of the The Frugal Fab 5.
I have a friend that lives for relaxation and vacation. Every time I hear about her, it never seems to include employment. Seriously. She stay chillin’ on beaches, on somebody’s couch, just living the life… I guess.
I say, “I guess,” because if there is no trust fund or Suga Daddy or Momma hanging around, my friend will be in some serious financial problems the older she gets, brought on by her inability to work, save, or plan for the future. There is a saying, “Old fools were once young fools.”
I have to admit, though. I get a itty bitty pang of jealousy—the temporary jealousy that the ant from the Ant and the Grasshopper might have felt when she saw the grasshopper, legs crossed, laid up in a leaf as she labored to prepare for the winter—as I hear about the life of leisure that she presents to the world, especially when this damn New York snow has my commute doubled and frustration level tripled. But I know, deep down, that my efforts to make a future of myself by being financially responsible are smart, enduring, and the way to go.
Until recently, though, I had no idea what the price tag on my “future” was. I have been a money hoarder, side-hustle hustler, an investor, but for what goal? I never really thought about the actual number that I would need to retire.
Currently, I am reading this book on investing, called Investing Made Simple by Mike Piper. He says that there is NO real way to get the exact number that you would need to retirement with, but there is a process of approximating roughly how much you would need.
Step 1: Take your current annual income and subtract the amount that you’re currently saving each year toward retirement. So, for example, if you make $50,000 and save $10,000, then the number is $40,000. Then adjust that amount either upward or downward based on the lifestyle that you expect to live when you retire. Do you expect to travel more, have kids in college, still have a mortgage, or be in decent health? It is important to think about those lifestyle factors because they all impact how much you will be spending in the long run.
Step 2: Adjust for inflation. Even though we don’t know what inflation will be like twenty years from now, we know that inflation has been about 3% in the U.S. historically. Piper talks about using the following formula to inflation-adjust your spending needs.
R= Retirement Spending Needs
C= Retirement spending needs in today’s dollar
I= Projected annual rate of inflation
T= the number of years until you retire.
For example, if you expect to need 40,000 per year during your retirement and you are 15 years away from retiring, and you expect inflation to average 3% over those 10 years, then you would calculate your future annual spending needs to be:
R= C x(1 +I)T (T is a coefficient). or R=$40,000 x(1.03) raised to the 15th power or $62,319
Click here for a calculator.
Step 3: Once you calculate your inflation-adjusted retirement spending needs, multiply that number by 25. Piper says that multiplying by 25 is a rule of thumb because multiple studies have shown that, “based on historical US market returns, a starting withdrawal rate of more than 4% per year has led to an undesirably high likelihood of running out of money over the course of a 30-year retirement. Therefore, you’ll want to ensure that your portfolio is 25-times (that is 1/ 4%)the amount that you expect to have to withdraw each year.”
In this case, this person’s magic number for retirement is at least $1,557,967 0r $62,319 x 25.
Promise me that once you figure out your magic number, you will memorize it, put it on post-its and place them in your car, in your wallet, at your desk at work, and on your computer. It will help you stay focused.
The lesson here: Start early. Imitate the Ant. Use Your Youth To Your Advantage.
Frugal Feministas– What’s your rough estimate for retirement? Share your number in the comments section. Are you getting yourself for the future?
This post originally appeared on The Frugal Feminista
You are talented, intelligent, experienced and fabulous. You have identified your dream job, or you are ready for a promotion and want to advance in your organization or corporation. You know you are ready, and we know it too but there is one person who you need to prove it to, the hiring manager.
Your resume is a critical document for your career advancement. It will proceed most interviews, and even telephone conversations. This is your first impression professionally. A fab finance resume is one that has been reviewed, updated, edited and customized. Follow these tips to ensure your resume is reflecting the copious amounts of awesome that you are.
Update: Your resume should always, always be updated and ready to go. When you are networking and somebody say “send me your resume” what they are really saying is “send me your resume right now before I forget you even exist” Harsh as it may seem, you really do have a short amount of time. I suggest with in the business day or before noon the next day. You cant do this if your resume is not updated with your most current education or experience.
Customized: If you are starting your job search, you need to make the effort to read the ENTIRE job posting. You should be using the language and verbiage of the posting as much as possible. If your resume says worked with teens on community service, but the job posting says “seeking energetic youth worker for inner city teens” then guess what your resume needs to say?
High energy, compassionate youth worker with over 5 years of experience leading services projects for New York City Teens. Your resume needs to be customized for two reasons, the HR robots who will be shifting through the millions of emails will be looking for specific key words. Those key words are not a mystery, they are in the posting! When your resume is read by the person who wrote the posting, they will have an “ah-ha” moment and feel like you are exactly what they are looking for, because you are using their language.
Review: Have your resume reviewed my different people. Utilize resources like the library, career centers, workforce development centers and family and friends. I got into my career path because I was strategic with who I asked to review my resume. I asked a colleague to review my resume, (knowing she would be hiring soon) and with that gesture, I was unofficially submitting my resume to her. The rest is history.
Edit: Don’t be afraid to make changes to your resume, whether it is format or content. Do your research to see what resumes in your particular field look like and be willing to adjust accordingly. Here is a portion of a resume I recently edited for a client. I adjusted both the format and content while keeping true to the individuals experience and skills.
I hope these pointers were helpful. Recently I gave a promo on Instagram victoriafab_ where I edited 5 resumes for free. The response was overwhelming! Stay tuned, there will be similar promotions in the future.