4 Ways To Use Credit Card Rewards To Help Pay For A Wedding

Your wedding can be one of your biggest life expenses, depending on what you include in your ceremony and reception. The average expense for a wedding has consistently risen over time, to a point that now the average wedding costs in the range of $30,000. If you’re looking to get married soon, Mint can actually help you create a separate wedding budget to help you manage those costs. 

In this article, we’ll talk about how you can use credit card rewards to help pay for a wedding. And while you’re unlikely to be able to pay for your entire wedding with credit card rewards, every little bit saved helps.

Planning a wedding

If you have a wedding coming up, the first thing that you’ll want to do is create a budget. Just like with your regular expenses, having a budget is an important step in keeping your costs down. Without a written budget, your costs have a tendency to go up and up without end. 

One important thing to keep in mind is that a budget can be as strict or as loose as you want it. Some people prefer to handle cost overruns by reducing the budget in other categories to compensate. Others choose to just increase the budget if costs are higher than expected. No matter how you decide to handle it, having a written budget means that you’ll make a conscious decision about it rather than just having expenses rise without you realizing it.

Paying for your wedding with credit cards

One way that you can help offset some of the costs of a wedding is via credit cards and credit card rewards. If you average a 2% return in credit card rewards on a $30,000 wedding, that’s $600 back. Of course, the easiest way to save money paying for your wedding is to have a smaller wedding, but that may not be an option for you, depending on your specific situation.

There are a few things that you’ll want to consider if you are talking about paying for your wedding with credit cards. The first is that paying for everything with credit cards does make it much easier to lose control of your spending. Just like with anything else, you should only spend money on credit cards that you have in the bank. That way you can always make your credit card payment in full, each and every month.

The other thing to consider when paying for a wedding with credit cards is that not every vendor might accept credit cards as a form of payment. This is especially true for individuals or smaller businesses. And those that do take credit cards may charge a processing fee. Of course, it doesn’t make sense to pay a 2.9% credit card processing fee to get 2% back in rewards. In those cases, it’s better to pay with cash, a check, or a payment service. You might also ask if there would be a discount for paying in cash — again, that could be more lucrative than any rewards you get from paying with a credit card.

Getting signup bonuses with all that spending

One option for making the most out of your credit card rewards that you might want to take advantage of is signing up for new credit cards that offer attractive welcome offers. Many credit cards offer signup bonuses for new applicants with a value of hundreds of dollars or more. These offers usually have a spending requirement associated with them, which isn’t a problem if you’ve got all those wedding expenses. Just remember to watch out for the many overpriced wedding items that you might want to avoid.

Using credit card rewards to pay for your honeymoon

Another way that you can use credit card rewards is to help pay for your honeymoon. Many credit cards offer rewards such as airline miles, hotel points or other types of travel rewards and benefits. Signing up for a few key credit cards can be a great way to splurge on a honeymoon to remember at a fraction of the cost. Flying in first class or staying in luxury resorts is something that may be much more in reach by using miles and points than if you were to try to pay for it with cash.

The Bottom Line

Smart usage of credit card rewards can be a great way to help pay for a wedding or, at the very least, get a rebate on all of the spending you’re doing. Make sure to set a budget to help stay out of wedding debt and use credit cards as part of your spending strategy. Following these simple steps can help you maximize your credit card rewards without hurting your overall credit score. Watch out for vendors that charge credit card processing fees and don’t use your credit card as an excuse to spend money that you don’t have.

The post 4 Ways To Use Credit Card Rewards To Help Pay For A Wedding appeared first on MintLife Blog.

Source: mint.intuit.com

Should you get an MBA if you want to start your own business?

The path to owning my own business started around 10 years ago. I graduated from high school and went on to college for business. I graduated, got a job as a financial analyst, and then around five years ago, completed my MBA with an emphasis in Finance.

Should you get an MBA if you want to start your own business? Is it a need? Or, can a person start a business without a college degree?It seemed like a logical path – graduate from high school, go to college, get a job in that field, and then get my MBA to further my career opportunities.

It was the path I fell into, and I never really gave it a second thought. For my MBA, I figured I needed it in order to be successful in the corporate finance world.

However, I’m now a full-time blogger.

One of the questions I’m often asked is if I regret going to school for so many college degrees (3). After all, it took a lot of time and led to a significant amount of debt.

I definitely did not learn a thing about blogging back in college, and an MBA isn’t 100% focused on the topic of starting your own specific business, especially a niche one. Plus, I did not get my MBA thinking that I would be starting my own business. I went for it to better my career opportunities.

Related content:

  • How I Paid Off $40,000 In Student Loans in 7 Months
  • Cutting College Costs: Understanding The Cost And Value Of Your Degree
  • Learning How To Survive On A College Budget
  • How I Graduated From College In 2.5 Years With 2 Degrees AND Saved $37,500

According to the U.S. Small Business Administration, there are 28.8 million small businesses in the United States, which make up 99.7% of all U.S. businesses. And, a huge number of the population are starting their own business and working for themselves.

But, does that mean they all need or have an MBA?

Remember, an MBA is not required when starting your own business. But, does that mean that those without an MBA do better or worse?

I researched to see what the value of an MBA is, and I was able to find a great chart from the U.S. Bureau of Labor Statistics about unemployment rates and earnings by educational attainment for 2016.

This data shows earnings for full-time wage and salary workers, but it doesn’t specify those who have started their own business. However, it does show that there is some value in a Master’s degree.

According to this chart, the unemployment rate is much lower for those with one or multiple college degrees. The median usual weekly earnings tends to increase as well.

However, according to a report released by the Harvard Business Review, most of the top business leaders in the world actually do NOT have MBAs. In fact, only 29 of the 100 best companies had executives with MBAs, and less than half of those received their MBA from an elite business school (think Harvard, Stanford, etc.).

Here’s a short list from Business Insider’s Top 100 Entrepreneurs Who Made Millions Without A College Degree:

  • Walt Disney, founder of the Walt Disney Company, dropped out of high school at 16.
  • Richard Branson, billionaire founder of Virgin Records, Virgin Atlantic Airways, Virgin Mobile, and more. He also dropped out of high school at 16.
  • Rachael Ray, Food Network cooking show star, food industry entrepreneur, with no formal culinary arts training. She never attended college.
  • Michael Dell, billionaire founder of Dell Computers, started his business out of his college dorm room, but he later dropped out of college.
  • Larry Ellison, billionaire co-founder of Oracle software company. Ellison actually dropped out of two different colleges.

However, there are also many successful people who do have MBAs, such as Elon Musk, Michael Bloomberg, Sheryl Sandberg, and Dr. Oz.

So, should you get an MBA if you want to start your own business?

 

MBAs can be expensive.

An MBA can cost anywhere from $5,000 to well over $100,000 depending on what college you attend.

And, according to Poetsandquants.com, the cost of obtaining your MBA continues to rise.

New York University’s Stern School of Business costs over $200,000, Harvard Business School has a total two-year cost to $204,640, and Stanford University’s Graduate School of Business costs $210,838.

That is a TON of money in order to get your MBA.

I went to a moderately priced state university and received my MBA, and I think that it was a great value. However, if I had to pay over $200,000 to receive my MBA, I don’t know if it would be worthwhile. That’s a lot of money for not much real world experience that can be applied to a specific business idea.

And, let’s not forget about the amount of time it can take to receive your MBA.

For some students, they focus on their MBA full-time, which means that they aren’t bringing in an income, or they are bringing in significantly less than needed to sustain most living expenses. Some MBA students do work full-time, but they usually take a smaller course load.

I worked on my MBA full-time and worked full-time, which meant that I didn’t have time for pretty much anything else in life.

Plus, if you know that you want to start a business, the time it takes to get an MBA can make that goal that much farther away.

 

An MBA surrounds you with other determined people.

By earning your MBA, you’ll most likely be surrounded by a network full of people who are wanting to succeed in the business world.

This can help you build your future business idea, gain contacts that may help you and your business later on, and more.

I always say that networking is extremely important, and an MBA can definitely help you in that area.

 

An MBA won’t specifically teach you about the business you want to start.

An MBA will give you a pretty well rounded background on business in general. However, it won’t teach you everything you need to know about starting and sustaining your specific business plan.

This means that you will probably have to learn how to start your specific business elsewhere, such as researching your ideas and business plans outside of your MBA program.

For example, if you want to start a blogging business, you most likely won’t learn anything about a blogging while earning your MBA. The same goes for many other business ideas as most MBAs aren’t really focused on specific markets.

What they do offer is a good background on the actual “business” side of starting your own business, as discussed below.

 

You do learn about business, though.

While earning an MBA is more about business theory, it still offers you a lot of background information that can help you create your own business.

Through my MBA and the career I had as an analyst, I learned about business accounting, business law, managing a business, economics, business finances, marketing, advertising, and more. These are all things you should know about when running your own business. Sure, you can outsource a lot of these tasks, but for most start-ups, you may personally have to take on many of these tasks, especially in the beginning.

My analyst position also taught me a lot about running a profitable business, since I dealt with successful business owners every day.

There are a lot of times that my education and work experience have helped me run my own business. And, I am extremely grateful because it has helped me run my business extremely well.

According to Investopedia, around 30% of new businesses fail during the first two years of being open, 50% during the first five years, and 66% during the first 10 years.

Some of the reasons for failure that are cited in the above article include:

  • Business owners not investigating the market.
  • Business owners have problems with their business plan.
  • A bad location, bad internet presence, and bad marketing for the business.

These are all things that are taught, in general, when working on your MBA, which can be great background knowledge for someone wanting to start their own business.

 

What about real experience?

I believe that real experience is the best. However, with an MBA, you can receive a well rounded education that can help you to launch a successful business.

You can learn how to manage a team, understand business specific finances, research the best business plan, and more.

When put together with real experience, I think that an MBA can be a great learning tool.

Does that mean that everyone should get their MBA?

No. Everyone is different, but I do believe that my MBA has helped me manage my own business.

What do you think? Should a person who wants to start a business get their MBA? If you’re already a business owner, do you have one? Why or why not?

The post Should you get an MBA if you want to start your own business? appeared first on Making Sense Of Cents.

Source: makingsenseofcents.com

How a CFP Celebrates Her Money Wins

People may often imagine that when they reach their milestones, there will be fireworks and party buses along with a huge celebration. And while sometimes there are, most wins are simply small steps you take every day until one day you wake up where you visualized you would be. That is why it is important to celebrate it all — the ups, the downs, the wins, the steps forward, and sometimes even backward. Without awareness and reflection, you might miss out on celebrating how much progress you have made in your financial life. By acknowledging even the so-called small things, you can keep the momentum alive and feel good about yourself.

Here are some ways I celebrate my money wins, no matter how big or small:

Tell my family and friends.

By sharing my money wins and even challenges with my closest friends and family, it opens me up to receive the love and support that is needed to sustain the financial journey. I think because money is still a topic most do not feel comfortable talking about, getting vulnerable with close family and friends allows them to do so with me in return. That kind of give and receive is part of living an open, abundant life. If you’re comfortable, you can even share on social media about your wins, which could inspire others. Sharing your money goals and personal finance journey also helps you stay out of the “I am all alone” mindset, which is not true and can actually hold you back from receiving more in your financial life.

Pause and feel proud of myself.

There are so many specific times in my life where I felt my money wins viscerally and just paused to take a moment to feel proud of myself for doing it. Whether it was saving a certain amount of money, negotiating a specific compensation package, or changing a mindset pattern holding me back from living abundantly, I can recall the memories specifically and feel great about them and myself. I remember years ago when I sold my first business and received the payment in my bank account, I felt amazing to know that I actually did it. I had finally reached my financial goal. It was just a regular workday and I was alone doing my weekly money date. And I distinctly remember feeling all the excitement and joy knowing I had accomplished something I worked on for years. The irony is when we reach our financial goals such as buying a home, paying off our student debts, or reaching our cash cushion goal, there aren’t actually big fireworks. Instead, you feel a deep understanding within yourself that you finally reached a goal you may have been striving toward for years.

Remember I can keep doing what it takes.

When celebrating my money wins, it also reminds me that I have the power to do and create what I want in life. By using my real-life experiences of achieving something I have worked for, I am reminded that I can continue doing so to achieve whatever next financial goal I have. When I reached my cash cushion goal years ago, I remembered that I have the power to keep creating my financial life as I desire and have the discipline to save for my goals. These reminders are key because no matter where we start financially, we all have the power to create our lives as we want, and choose how we show up, behave, think and act with our money. We are not victims. When I feel that and know that in my being, I feel anything is possible and am able to stay in the positive, “I can,” mindset.

Buy something memorable to acknowledge my hard work and effort.

This does not always have to be something major but can even be something that you have been wanting for a significant amount of time. When I reached my own financial goal last year of making a certain amount of business revenue for the year, I decided with one of my larger incoming checks to my business, I would take a portion and buy myself a designer handbag I had wanted for a few years. It was a gift to myself that I could enjoy and remember my hard work to achieve it. But you don’t always have to spend a lot. I also treat myself to smaller things like a massage or treating my family or friends out to a nice dinner. I just try to take time to celebrate by enjoying something nice whether it is a material item or a nice experience with my loved ones.

Journaling my accomplishments.

Every year, I take time to reflect on my total accomplishments for the year by journaling them out. This activity is solely for me to remember all I have achieved and to feel good about my accomplishments. By reflecting, I am able to connect to the positive aspects and blessings in my life to acknowledge how incredible I am. We tend to focus on what we are lacking or what we are not. By doing this activity, you are shifting your mindset and balancing the scales in a sense.

It’s common to look internally and criticize ourselves. Our mind jumps to comparing, thinking, “I don’t have this or that or I didn’t do this or that” or even feeling like a failure. With that mindset, you can get stuck only focusing on what you are not and have not, instead of embracing all that you are and all that you have. Having an attitude of gratitude goes a long way, especially with money. So take time to celebrate and feel grateful for what you have and all that you have accomplished. I truly believe this will also help you continue to attract more in your life.

The post How a CFP Celebrates Her Money Wins appeared first on MintLife Blog.

Source: mint.intuit.com

How To Get A Car Loan in 5 Easy Steps

Need a car loan soon? Whether you’re about to buy a car soon or just thinking about it, chances are you will likely finance it (unless, of course, you have the cash to buy it right away). So why not learn a few steps along the way to help you get a car loan. A little knowledge about the process can go a long way; so far as saving you thousands of dollars in the long run!

Ready to start comparing car loan already? Start now… it’s Free.

Step One: Review your credit file

You may need to get a free credit report and make sure you have a good credit score before applying for a car loan. The better your credit score, the higher your chance to get approved and save on interest.

Step Two: Compare interest rates

You should shop around, compare auto rates and fees before you apply for a car loan. The worst thing you can do to yourself is to apply for multiple loans at the same time, as this can affect your credit score.

So, look at multiple rates at one place so you can make the best decision. Also, remember you can choose a fixed rate or variable rate on a car loan.

Whichever you choose depends on what you’re comfortable with. Remember that a fixed rate will stay the same for all of the term of the loan. That means, your repayment will be predictable and you’ll be able to budget for a lot easier than with a variable rate.

Click here to compare car loan rates through LendingTree.

Step Three: Dealer Finance or Car loan?

You should always compare bank/independent loan to dealer finance.

Granted dealer financing may get you a auto loan with a very low rate, but that does not mean you get the best deal. Sometimes dealer financing can be more expensive in the long run. So you may want to compare rates from 2-3 lenders with a dealer finance rate to make sure you get the best rate possible.

Step Four: Get pre-approved

Before you commit to a car you should get pre-approved first. Plus, walking into the car dealership with a pre-approval letter in your hand, gives you greater negotiating power.

Step Five: Gather your documents and go car shopping

Once you decide on an auto loan that you’re happy with, it’s time to go car shopping! So gather your financial documents such as your pay stubs, bank statements, tax returns, and W2s.

Want to explore your car loan options? Visit LendingTree to compare the best car loan rates.

Related: How to save money for a car

Speak With The Right Financial Advisor

You can talk to a financial advisor who can review your finances and help you reach your goals. Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.

The post How To Get A Car Loan in 5 Easy Steps appeared first on GrowthRapidly.

Source: growthrapidly.com

How Much Is Enough For Retirement?

If you’re thinking about how much is enough for retirement, you’re probably contemplating a retirement and need to know how to pay for it. If you are, that’s good because one of the challenges we face is how we’re going to fund our retirement.

Determining then how much retirement savings is enough depends on a number of factors, including your lifestyle and your current income. Either way, you want to make sure that you have plenty of money in your retirement savings so you don’t work too hard, or work at all, during your golden years.

If you’re already thinking about retirement and you’re not sure whether your savings is in good shape, it may make sense to speak with a financial advisor to help you set up a savings plan.

Check Out Now

  • 5 Tips to Optimize Your Retirement Account Withdrawals Read Now
  • People Who Retire Comfortably Avoid These Financial Advisor Mistakes

How Much Is Enough For Retirement?

Your needs and expectations might be different in retirement than others. Because of that, there’s no magic number out there. In other words, how much is enough for retirement depends on a myriad of personal factors.

However, the conventional wisdom out there is that you should have $1 million to $1.5 million, or that your retirement savings should be 10 to 12 times your current income.

Even $1 million may not be enough to retire comfortably. According to a report from a major personal finance website, GoBankingRates, you could easily blow $1 million in as little as 12 years.

GoBankingRates concludes that a better way to figure out how long $1 million will last you largely depends on your state. For example, if you live in California, the report found, “$1 Million will last you 14 years, 3 months, 7 days.” Whereas if you live in Mississippi, “$1 Million will last you 23 years, 2 months, 2 days.” In other words, how much is enough for retirement largely depends on the state you reside.

For some, coming up with that much money to retire comfortably can be scary, especially if you haven’t saved any money for retirement, or, if your savings is not where it’s supposed to be.

Related topics:

How to Become a 401(k) Millionaire

Early Retirement: 7 Steps to Retire Early

5 Reasons Why You Will Retire Broke

Your current lifestyle and expected lifestyle?

What is your current lifestyle? To determine how much you need to save for retirement, you should determine how much your expenses are currently now and whether you intend to keep the current lifestyle during retirement.

So, if you’re making $110,000 and live off of $90,000, then multiply $90,000 by 20 ($1,800,000). With that number in mind, start working toward a retirement saving goals. However, if you intend to eat and spend lavishly during retirement, then you’ll obviously have to save more. And the same is true if you intend to reduce your expenses during retirement: you can save less money now.

The best way to start saving for retirement is to contribute to a tax-advantaged retirement account. It can be a Roth IRA, a traditional IRA or a 401(k) account. A 401k account should be your best choice, because the amount you can contribute every year is much more than a Roth IRA and traditional IRA.

1. See if you can max out your 401k. If you’re lucky enough to have a 401k plan at your job, you should contribute to it or max it out if you’re able to. The contribution limit for a 401k plan if you’re under 50 years old is $19,000 in 2019. If you’re funding a Roth IRA or a traditional IRA, the limit is $6,000. For more information, see How to Become a 401(k) Millionaire.

2. Automate your retirement savings. If you’re contributing to an employer 401k plan, that money automatically gets deducted from your paycheck. But if you’re funding a Roth IRA or a traditional IRA, you have to do it yourself. So set up an automatic deposit for your retirement account from a savings account. If your employer offers direct deposit, you can have a portion of your paycheck deposited directly into that savings account.

Related: The Best 5 Places For Your Savings Account.

Life expectancy

How long do you expect to live? Have your parents or grandparents lived through 80’s or 90’s or 100’s? If so, there is a chance you might live longer in retirement if you’re in good health. Therefore, you need to adjust your savings goal higher.

Consider seeking financial advice.

Saving money for retirement may not be your strong suit. Therefore, you may need to work with a financial advisor to boost your retirement income. For example, if you have a lot of money sitting in your retirement savings account, a financial advisor can help with investment options.

Bottom Line:

Figuring out how much is enough for retirement depends on how much retirement will cost you and what lifestyle you intend to have. Once you know the answer to these two questions, you can start working towards your savings goal.

How much money you will need in retirement? Use this retirement calculator below to determine whether you are on tract and determine how much you’ll need to save a month.

More on retirement:

  • Find Out Now 7 Questions People Forget to Ask Their Financial Advisors
  • 7 Mistakes Everyone Makes When Hiring a Financial Advisor
  • Compare Fiduciary Financial Advisors — Start Here for Free.
  • 7 Situations When You Need a Financial Advisor – Plus How to Find One Read More
  • 5 Tips to Optimize Your Retirement Account Withdrawals Read Now
  • People Who Retire Comfortably Avoid These Financial Advisor Mistakes

Working With The Right Financial Advisor

You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is paying off debt, investing, buying a house, planning for retirement, saving, etc). Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.

The post How Much Is Enough For Retirement? appeared first on GrowthRapidly.

Source: growthrapidly.com

Learning How To Survive On A College Budget

Find out how to survive on a college budget here. This is a great list!College is expensive and everyone knows that.

Between paying for tuition, parking, textbooks, extra fees, and everything else, you also have basic living expenses to pay for as well.

All of these costs are either brand new or somewhat new to you most likely as well, so you might not even know how to survive on a budget, let alone a college budget.

Don’t worry, though, surviving on a college budget is possible. Learning how to save money in college is possible!

Related post: How I Paid Off $40,000 In Student Loans In 7 Months

Whether you are trying to survive the whole year off of what you made over the summer or if you have a steady job throughout the school year, there are ways to budget your money and not fall into any extra debt. Plus, you can still enjoy your college years on a low budget as well!

Below are my tips on how to survive on a college budget.

 

Use your student ID.

Your student ID is good at many places beyond just your college campus. Before you buy anything, I highly recommend seeing if a company offers a student discount.

Your student ID can be used to save money at restaurants, clothing stores, electronics (such as laptops!), at the movies, and more. You may receive a discount, free items, and more all just by flashing your student ID.

After all, you are paying to go to college and you are paying a lot. You might as well reap one benefit of paying all of those high college costs.

 

Make extra money.

You may need to look into making extra money if you just don’t have enough to survive on. I am a firm believer in making extra money and I think extra time can be wisely spent doing this.

Some online side gigs with flexible schedules include:

  • Blogging is how I make a living and just a few years ago I never thought it would be possible. I made over $150,000 last year by blogging and will make more than that in 2015. You can create your own blog here with my easy-to-use tutorial. You can start your blog for as low as $3.49 per month plus you get a free domain if you sign-up through my tutorial.
  • Survey companies I recommend include Survey Junkie, American Consumer Opinion, Product Report Card, Pinecone Research, Opinion Outpost, and Harris Poll Online. They’re free to join and free to use! It’s best to sign up for as many as you can because that way you can receive the most surveys and make the most money.
  • InboxDollars is an online rewards website I recommend. You can earn cash by taking surveys, playing games, shopping online, searching the web, redeeming coupons, and more. Also, by signing up through my link, you will receive $5.00 for free!
  • Swagbucks is something I don’t use as much, but I do earn Amazon gift cards with very little work. Swagbucks is just like using Google to do your online searches, except you get rewarded points called “SB” for the things you do through their website. Then, when you have enough points, you can redeem them for cash, gift cards, and more. You’ll receive a free $5 bonus just for signing up today!
  • Check out 75 Ways To Make Extra Money for more ideas.
  • Read Best Online Jobs For College Students

 

Use coupons to stay on a college budget.

Just like with the above, you may want to start using coupons.

By doing so, you can save money on nearly everything. You can find coupons in newspapers, online, and in the mail. They are everywhere so you should have no problem finding them and saving money today.

Related post: How To Live On One Income

 

Learn how to correctly use a credit card or don’t have one at all.

Many college students fall into credit card debt, but I don’t want you to be one of them.

Many college students will start relying on their credit cards in order to get them through their low college budget, but this can lead to thousands of dollars of credit card debt which will eventually seem impossible to get out of due to significant interest charges that keep building up.

In order to never get into this situation, you should avoid credit cards at all costs if you think you will rely on them too heavily.

You should think long and hard about whether you should have one or not. Just because many others have them doesn’t mean they know what they’re doing! However, if you think you will be good at using them, then there are many advantages of doing so.

Related post: Credit Card Mistakes That Can Lead To Debt

 

Only take out what you need in student loans.

Many students take out the full amount in student loans that they are approved for even if they only need half.

This is a HUGE mistake. You should only take out what you truly need, as you will need to pay back your student loans one day and you will most likely regret it later.

I know someone who would take out the max amount each semester and buy timeshares, go on expensive vacations, and more. It was a huge waste of money and I’m still not even sure why they thought it was a good idea.

Just think about it – If you take out an extra $2,000 a semester, that means you will most likely take out almost $20,000 over the time period that you are in college.

Do you really want to owe THAT much more in student loans?

 

Skip having a car.

Most campuses have everything you need in order to survive – food, stores, and jobs. In many cases, you do not need to have a car whatsoever.

By foregoing a car, you may save money on monthly payments, maintenance costs, car insurance, gas, and more.

Related post: Should We Get Rid Of A Car And Just Have One?

 

Eat out less.

Now, I’m not saying you should stop eating out entirely if you are trying to survive on a college budget. I know how it is to be in college and to want to hang out with everyone. These are your college years after all.

However, you should try to eat in as much as you can, make your own meals, and try to eat out only during happy hours or when food is cheaper, such as during lunch time. Eating out can ruin your college budget!

 

Have a roommate.

The more people you live with, generally the less you will pay when it comes to rent and utilities. If you are living on your own, then you may want to find roommates so that you can split the costs with them.

This will help you to lower your college budget and you may even find some awesome friends.

Related post: What I Learned Having Roommates

What college budget tips do you have?

 

The post Learning How To Survive On A College Budget appeared first on Making Sense Of Cents.

Source: makingsenseofcents.com

What Is a Jumbo Loan? Finance Your Property in a Competitive Market

After years of building a stellar credit history, you may have decided you’re finally ready to invest in that vacation home, but you don’t have quite enough in the bank for that eye-catching property just yet. Maybe you want to begin your investment journey early so you don’t have to spend years bulking up your life’s savings.

If an aspiring luxury homeowner can’t sufficiently invest in a property with a standard mortgage loan, there’s an alternative form of financing: a jumbo mortgage. This mortgage allows those with a strong financial history who may not necessarily be a billionaire to get in on the luxury property market. But what is a jumbo mortgage (commonly known as a jumbo loan), and how exactly does it work?

Jumbo Loan Definition

A jumbo loan is a mortgage loan whose value is greater than the maximum amount of a traditional conforming loan. This threshold is determined by government-sponsored enterprises (GSE), such as Fannie Mae (FHMA) and Freddie Mac (FHLMC). Jumbo loans are for high-valued properties, like mansions, luxury housing, and homes in high-income areas. Since jumbo loan limits fall above GSE standards, they aren’t guaranteed or secured by the government. As a result, jumbo loans are riskier for borrowers than conforming mortgage loans.

Jumbo loans are meant for those who may earn a high salary but aren’t necessarily “wealthy” yet. Lenders typically appreciate this specific group because they tend to have solid wealth management histories and make better use of financial services, ensuring less of a risk for the private investor.

Due to the uncertain nature of a jumbo loan, borrowers need to present an extensive, secure credit history, as well as undergo a more meticulous vetting process if they’re considering taking out a jumbo loan. Also, while jumbo loans can come in handy for those without millions in savings, potential borrowers must still present adequate income documentation and an up-front payment from their cash assets.

Like conforming loans, jumbo loans are available at fixed or adjustable rates. Interest rates on jumbo loans are traditionally much higher than those on conforming mortgage loans. This has slowly started shifting over the last few years, with some jumbo loan rates even leveling out with or falling below conforming loan rates. For example, Bank of America’s 2021 estimates for a 5/1 adjustable-rate jumbo loan were equivalent to the same rate for a 5/1 adjustable conforming loan.

The Federal Housing Finance Agency (FHFA) has set the new baseline limit for a conforming loan to $548,250 for 2021, which is an increase of nearly $40,000 since 2020. This new conforming loan limit provides the new minimum jumbo loan limits for 2021 for the majority of the United States. As the FHFA adjusts its estimates for median home values in the U.S., these limits adjust proportionally and apply to most counties in the U.S.

Certain U.S. counties and territories maintain jumbo loan limits that are even higher than the FHFA baseline, due to median home values that are higher than the baseline conforming loan limits. In states like Alaska and Hawaii, territories like Guam and the U.S. Virgin Islands, and counties in select states, the minimum jumbo loan limit is $822,375, which is 150 percent of the rest of the country’s loan limit.

Jumbo Loan Rates for 2021

Ultimately, your jumbo loan limits and rates will depend on home values and how competitive the housing market is in the area where you’re looking to invest.

Jumbo Loan vs. Conforming Loan: Pros and Cons

The biggest question you might be asking yourself is “do the risks of a jumbo loan outweigh the benefits?” While jumbo loans can be a useful home financing resource, sometimes it makes more sense to aim for a property that a conforming loan would cover instead. Here are some pros and cons of jumbo loans that might make your decision easier.
Pros:

  • Solid investment strategy: Jumbo loans allow the investor to get a solid jump-start in the luxury real estate market, which can serve as a beneficial long-term asset.
  • Escape GSE restrictions: Jumbo loan limits are set to exceed those decided by Freddie Mac and Fannie Mae, so borrowers have more flexibility regarding constraints they would deal with under a conforming loan.
  • Variety in rates (fixed, adjustable, etc.): Though jumbo loan rates differ from conforming loan rates in many ways, they still offer similar options for what kinds of rates you want. Both offer 30-year fixed, 15-year fixed, 5/1 adjustable, and numerous other options for rates.

Cons:

  • Usually higher interest rates: Though jumbo loans are known for their higher interest rates, the discrepancies between those and conforming loan rates are starting to lessen each year.
  • More meticulous approval process: To secure a jumbo loan, you must have a near air-tight financial history, including a good credit score and debt-to-income ratio.
  • Higher initial deposit: Even though jumbo loans exist for those who are not able to finance a luxury property from savings alone, they still require a higher cash advance than a conforming loan.

Jumbo Loan vs. Conforming Loan- Pros and Cons

How To Qualify for a Jumbo Loan

As we mentioned before, jumbo loans require quite a bit more from you in the application process than a conforming loan would.

First and foremost, most jumbo lenders require a FICO credit score of somewhere around 700 or higher, depending on the lender. This ensures your lender that your financial track record is stable and trustworthy and that you don’t have any history of late or missed payments.

In addition to the amount of cash you have sitting in the bank, jumbo lenders will also look for ample documentation of your income source(s). This could include tax returns, pay stubs, bank statements, and any documentation of secondary income. By requiring extensive documentation, lenders can determine your ability to make a sufficient down payment on your mortgage, as well as the likelihood that you will be able to make your payments on time. Usually lenders require enough cash assets to make around a 20 percent down payment.

Finally, and perhaps most importantly, lenders will also require that you have maintained a low level of debt compared to your gross monthly income. A low debt-to-income ratio, combined with a high credit score and sufficient assets, will have you on your way to securing that jumbo loan in no time.

Furthermore, you will also likely need to get an appraisal to verify the value of the desired property, in order to ensure that the property is valued highly enough that you will actually qualify for a jumbo loan.

Key Takeaways:

  • Jumbo loans provide a solid alternative to those with a steady financial history who want to invest in luxury properties but don’t have enough in the bank yet.
  • A jumbo loan qualifies as any amount exceeding the FHFA’s baseline conforming loan limit: $548,250 in 2021.
  • Jumbo loan rates are typically higher than those of conforming loans, although the gap between the two has begun to close within the last decade.
  • To secure a jumbo loan, one must meet stringent financial criteria, including a high credit score, a low DTI, and the ability to make a sizable down payment.

For any financially responsible individual, it’s important to always maintain that responsibility in any investment. Each decision made should be carefully thought out, and you should keep in mind any future implications.

While jumbo loans can be a valuable stepping stone to success in competitive real estate, always make sure your income and budget are in a secure position before deciding to invest. You always want to stay realistic, and if you aren’t interested in spending a few more years saving or financing through a conforming loan, then a jumbo loan may be for you!

Sources: Investopedia | Bank of America | Federal Housing Finance Agency

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Source: mint.intuit.com

5 Financial Goals to Start in 2021

 

Although many people start New Year’s resolutions in January, there’s nothing magical about January with regards to self-improvement. Still, the best time to make a change or set a goal is today, so if you’re ready to level up in your life, there’s no time like the present. Here are five financial habits that you might consider starting this year. 

Commit to a written budget (and review it often)

The very first thing that you’ll want to do is commit to a budget. Having a budget is the cornerstone and foundation for financial success. Knowing where your money is going (and not going) can help you understand where you’re at. If you’ve had trouble making or keeping a budget, resolve to start a budget this year. A tool like Mint can be a great way to put your budget on autopilot.

Remember that a budget is just a tool to help you to not spend money on the things you don’t find important so that you have money to spend on the things that you do find important. If you already have a budget, make it a habit to review your budget, at least monthly. That can help you identify where you might be able to make improvements.

As you start or recommit to your budget, make sure that it is written down. Budgets that are not written down, like goals, tend to fall by the wayside easily.

Start (or build) your emergency fund

Another great habit to get into in 2021 is starting an emergency fund. An emergency fund should be one of the very first things you do with any extra money you have in your budget. Even before working on eliminating your debt or saving for retirement, it makes a lot of sense to set aside money for emergencies.

A good rule of thumb is to start with a $1,000 emergency fund. It may not cover catastrophic emergencies, but it can help you to avoid having to spend on your credit cards when the unexpected happens. After you’ve started that basic emergency fund, then you can continue to build it up while also starting to pay off debt or invest for the future. If you can, it’s a good idea to have a couple of months of expenses in your emergency fund. That way you’re covered for a while in case you lose an income source or have a major emergency.

Make a plan to eliminate your debt

The next habit to start or continue this year is to eliminate your debt. Depending on how much debt you currently have, it may not be realistic to pay off all of your debt in 2021. But no matter what, you should have a plan in place. There are a variety of different debt repayment strategies – the debt snowball and the debt avalanche among many. It’s important to pick a debt payoff approach that works for you, and that you can stick to. Make it a habit to spend less than you earn and work towards becoming debt-free.

Spend with a purpose

Another great habit that can help you live within your means is to spend with a purpose. Spending with a purpose means that you are conscious with your spending. If you ever find yourself wondering where all your money has gone, you may benefit from being more deliberate with your spending.

Many people find success by setting a rule about any non-essential spending. For example, before you make any purchases besides essentials like rent, utilities, and debt payments, you must write it down. Just the act of writing it down (or taking a picture of it) is enough for many people to be more deliberate and conscious about what they choose to spend their money on.

Pay yourself first, and make sure to give yourself a raise

If you’re like many people, you may have good intentions of saving money each month, but at the end of the month, you find there’s nothing left over after all the bills are paid. One habit that people who are successful financially have is to pay themselves first. Put your savings money aside at the BEGINNING of the month. It’s a bit of a mental trick, but many people find that having that money out of sight helps them to save more.

Another financial habit to start is to always give yourself a raise. Whenever you get a raise at work or come across any “extra” money, IMMEDIATELY put it either in your emergency fund or use it to pay down your debt. Putting any raise or extra money towards your savings (instead of increasing your standard of living) is a great habit to start. 

This is a great habit to start, especially if you are young or just starting out in your professional life.  Of course, paying yourself first and giving yourself a raise, doesn’t mean that you have to only eat ramen or can’t have nice things. But thanks to the magic of compound interest, the sooner you start to save and invest, the better off you’ll be.

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Source: mint.intuit.com