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4 SMART Goal Examples

SMART-goal-examples
 
This article is meant to help you understand SMART goals and how to use them. By giving plenty of examples along the way, you can use this goal making tool to your advantage and achieve all your personal and professional goals. You may have heard the acronym SMART goals by now, and you may be wondering what it means and how to use this tool to up your goal setting game.

  1. Professional Goals
  2. Fun Personal Goals
  3. Serious Personal Goals
  4. Financial Goals

What are SMART Goals?

SMART is an acronym that stands for Specific, Measurable, Achievable, Relevant, and Time-Bound. SMART is a mnemonic device that is meant to help you create “smarter” goals. The 5 elements of a SMART goal are the 5 key characteristics of an effective goal that you can actually achieve. So you want the goals you make to be specific, measurable, achievable, relevant, and time-bound.

Specific

To make your goals specific enough, you want to answer the key “W” questions, who, what, when, where, why? You want to decide your goal and describe it in as much detail as possible. The key is to have a clearly defined picture of your goal in your mind, leaving no room for ambiguity.

Ask who, what, where, and any other details?

Measurable

Making your goal measurable is mainly making it so you have a measurable outcome to work toward, so you’ll know for certain when you are successful or not. So instead of just wanting to lose weight, figure out how many pounds you want to lose. If you want more Instagram followers, think about how many more followers you want. What you can measure is going to be different for each goal, but there is always something you can measure. Maybe you want to be happier, what are some measurable things you can keep track of that will show whether your plans are working? Maybe you can measure how many hours of sleep you get each night to see if you’re getting your full 8 hours each night, or record in a mood journal how you feel at certain times of the day for a couple weeks to try and find patterns.

Ask how?

Attainable

Just like when dealing with your finances you’ll want to determine whether the ROI is worth it. Each goal is going to take time and resources. Are they going to yield worth while results? Is the effort your goal would require doable? Maybe you want to run a marathon but you’ve never run before, so perhaps a better goal to start with would be to run 20 minutes every day. Sometimes you need to take your vision down a bit for a goal that you are actually able to do right now in your life.

What’s the level of attainability?

Relevant

Sometimes we feel pressured by our surroundings to make certain goals. Maybe your parents want you to be a doctor, but you want to be an English teacher. Maybe the people around you make you feel like you need to make intense dieting and weight goals to buff up or slim down, but you’re actually at a healthy bmi(link to how to gain weight on a budget post). Goals take time and effort, they come with their own costs, so above all your goals have to be made for you, by you. So when making a goal ask yourself what your motives are and make sure they’re good, worth it, will actually yield the results you desire.

Ask why?

Time-Bound

Time needs to be a major element in any goal you make. You need to create a plan that aligns with calendar dates and deadlines. Having a due date helps us stay focused, motivated, and kick us into action. Remember that it is here where you can bog yourself down if you’re not careful, so be flexible and plan smartly so you don’t overwhelm yourself. Don’t be afraid to adjust when you need to, sometimes learning your limits and what works best for you takes some trial and error.

Ask when?

SMART Goal Examples

There are different elements that make up our lives and thus there are different kinds of goals we can make for each aspect of our lives. There are the more formal, professional, and serious goals we need to make, and then there are personal and fun goals we want to make. Make goals for your more professional and serious successes, but set goals for yourself as well. Below are some key goal categories to remember:

1. Professional Goals

Specific: (ask who, what, where, and any other details) You want to wake up earlier for work each morning.

Measurable: (ask how) You record on a chart beside your bed every night you manage to go to bed at 10:30 pm. On a similar chart beside the door you mark each morning you are able to leave your house for work at 7:30 am.

Attainable: (what’s the level of attainability) Instead of making a goal to get to work by 7 each morning, you’ve started with a goal to get to work by 8 each morning, because you know working toward this goal is more feasible for you right now.

Relevant: (ask why) This goal is relevant for you because going to work earlier will allow you to leave earlier in the day, giving you more time for other goals and endeavors outside of work.

Time-Bound: (ask when) You’ve set alarms on your phone to remind you when to get ready for bed, and when to wake up and get ready for the day. You’ve decided to give yourself a month to get into this routine, and if you are successful, you’ll reward yourself to a Friday movie night with friends.
 
professional-goals
 

2. Fun Personal Goals

Specific: (ask who, what, where, and any other details) You want to make more friends in college.

Measurable: (ask how) You plan social events to go to every weekend this month and decide you have to stay at each for at least a full hour, and must talk to at least 3 people you don’t know. You record the events, how long you stayed, and who you befriended in your journal after each weekend.

Attainable: (what’s the level of attainability) You know you can attain this goal because there are social events you know you’ll be able to go to, and you have a roommate who is very social land willing to go with you to each event.

Relevant: (ask why) This goal is relevant to you because you’re a freshman in college and want to make friends in this new phase of your life. You know your overall wellbeing and happiness will increase by reaching this goal.

Time-Bound: (ask when) You have this month to enact your plan before reevaluating all the new people you met, and continuing with your goal by inviting some of those people to a social event at your own apartment at the beginning of the following month.
 
fun personal goals
 

3. Serious Personal Goals

Specific: (ask who, what, where, and any other details) You want to lose 10 pounds.

Measurable: (ask how) You’ll weigh yourself on a scale and record your weight progress on a chart.

Attainable: (what’s the level of attainability) This goal is attainable because you’ve spoken with your doctor and it is ok for you to lose 10 pounds. You also have a dietary and exercise plan that should yield results over time.

Relevant: (ask why) This goal is relevant to you because losing 10 pounds will put you at a healthier weight, give you more energy, and build your confidence.

Time-Bound: (ask when) You schedule regular weigh-in dates for the following weeks to come, and estimate that you should reach your weight loss goal in time for the beginning of summer.
 
serious personal goals
 

4. Financial Goals

Specific: (ask who, what, where, and any other details) You want to decrease your debts.

Measurable: (ask how) You know how much overall debt you have, and after sitting down with your budget you can reorganize your spending so you know exactly how much you can spend on debts and other spending each month. This will also tell you exactly how long it will take for you to pay it all off. You can keep a record of when you successfully make each payment, and visually see yourself getting closer to paying all of it.

Attainable: (what’s the level of attainability) You can know the attainability of this goal by how well you budget for spending more on debts and less on other varied expenses. If you ever need help reaching your financial goals and getting back on track you can take out a personal loan at Check City.

Relevant: (ask why) This goal is relevant because you have debt to get rid of, and getting rid of debt will free you to spend more on other things and save for the future.

Time-Bound: (ask when) You have a due date for your bills each month and by keeping on track with these monthly dates, you stay on track to finish paying off your debt in the months you’ve given yourself.
 
financial goals
 

Document Your Goals

In order to make sure your goals follow the SMART goal rules, it may help to record them on a chart or utilize a goal setting app. There are countless goal setting apps out there to help you track your habits and reach your aspirations. Here are some of the best goal setting apps for making SMART goals:

smart-goal-chart-printable
 
In some ways, goals are how we live our lives. It’s how we make decisions and enact change. Understanding the 5 key characteristics of SMART goal-making can help you level up in your personal and professional life, and more effectively plan for success. As a great artist once said:
 
“Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.”

—Pablo Picasso



READ MORE
Read the section on SMART goals from YourCoach.
 
Read another Check City article about goal making by reading, “How to Set Goals.”

Budgeting in 4 Easy Steps

budget
No matter your financial situation in life, everyone needs a budget. With a budget you can plan for needed expenses and prepare for the things you want. In fact, the most simple budget only needs a couple lists, a calculator, and some goals. Below are the the main points our post will go over to help you set up your budget:
 

 
Budgets are an important tool in anyone’s financial arsenal. Budgets can help you organize your needed expenses, like rent and bills, prepare for emergencies and get ready for whatever your future might hold. By knowing how to budget you can learn to stop living paycheck to paycheck and start building up your savings. it can help you save up for big expenses or future life events like a wedding, starting a family, buying a car or a house or moving to a new state.

Budgeting can also help you save for retirement, something else that even younger people just starting out on their own sometimes forget to think about but should. But most of all a it can grant you financial power and freedom and help you provide for your wants and needs. But for those just starting out on their own especially, it can be hard to know where to begin.

There are several key elements you’ll need to include in your budget. You need to think about all your necessary expenses and plan them out accordingly so you are aware of how much of your monthly income you need to spend each month no matter what. Then you’ll have to think about unnecessary expenses. This is where you have the most freedom to plan out the numbers and make adjustments.
budget-template

How to Budget

There are many ways to budget and there is a lot of advice out there in the financial spheres about how to do it. You can also choose to plan for certain events by making a specific wedding budget, or for major purchases like car payments. But if you’re making a simple budget for yourself, then the main thing you’ll want to decide first is whether you want to make a monthly or yearly budget. Most people like to create a yearly one to get a general big picture view of their financial goals and future plans. But, a monthly one is more helpful for everyday use. We’re going to try and condense all that down to the bare bones minimum of what every smart budget needs.

#1: List your monthly income

List out all your forms of income. This would include the paychecks from your job, but also any extra money you make from any of your side hustles. Here is also where you can decide whether you want to organize your finances for gross income or net income.

Gross income is simpler and easier to calculate. You just need to know how much you get paid and use that money for your calculations.

Net income isn’t as simple to figure out but there are advantages to using it. You figure out your net income by looking up what the income tax is in your state, and taking out that percentage from your gross income. Using net income instead of gross income is perhaps better because it more realistically reflects what you will actually receive from your paycheck.

#2: List your fixed expenses

After you have all your sources of income written down you’ll want to form another list for all your fixed expenses. Fixed expenses are the expenses you have each month that don’t fluctuate in amount. Everyone’s list is going to look different depending on what expenses do and don’t apply to you, but here is an example list of some fixed expenses:

  • Rent or Mortgage: A calculation you’ll want to do when looking at your housing expenses is to check that your total housing expenses aren’t over 28% of your monthly gross income.
  • Insurance
  • Debts: A calculation you’ll want to do when looking at your debts is to check that your total debts aren’t over 36% of your monthly gross income.
  • Loans
  • Student loans
  • Credit card payments
  • Streaming services like Netflix, Hulu, and Spotify
  • Phone bill
  • Medication you pay for each month
  • Child support
  • Education

After you’ve listed all your fixed expenses total the amount, subtract it from your monthly income, and that’s what you have left to spend on varied expenses . . .

#3: Set up your savings

Before we go into varied expenses though, let’s take a moment to think about your savings and retirement. Get a savings account if you don’t have one already, and set aside a portion of what’s left over after fixed expenses. Any amount you can afford to put away into a savings account each month will set you up for success in the long term, even if it’s only 5 to 10 dollars a month.

Aside from general savings and saving for retirement, you also want to set money aside in an emergency fund. It’s recommended that you have at least 3 months worth of your fixed expenses put away into an emergency fund at all times.

Digit is a great app you can use to help you plan and organize all your savings.

#4: List and portion out your varied expenses

Everyone’s list of varied expenses is going to look differently depending on what expenses do and don’t apply to you. Varied expenses are any expenses that are going to fluctuate in amount each month, or are considered more like luxury expenses than needed ones.

Varied expenses are a big reason to do a budget in the first place so that your varied expenses each month don’t overtake your more important fixed expenses and your savings. Here are some examples of varied expenses you might need to consider:

  • Groceries
  • Eating out
  • Entertainment
  • Gas and transportation
  • Recreation
  • Clothes
  • College textbooks

Another way to figure out the reality of what you’re spending on varied expenses is to look at your transaction history for the month and see 1) How much in total you were spending on varied expenses that month, and 2) What those varied expenses were on. Do this for a couple months back to get a more realistic idea of what you are spending on varied expenses each month.

Organizing your varied expenses is where you have the most control over your budget. Whatever is left over after your fixed expenses and your monthly payments to your savings account is what you have to spend on all your other spending for the month.

Here is where you will list out what all those varied expenses might be and portion what you have left in the budget into them. Remember that you don’t necessarily want to portion out 100% of what’s left into these categories so that you can accumulate a comfortable cushion in not just your savings account but your checking account as well.

Budgeting Tips

Invest

Making investments is a great way to beef up your financial portfolio. There are probably a trillion ways to invest, but the idea behind investments is that you put money into something that will give you more money in return later. This is called compounding interest.
interest-rate
A helpful tip to remember when going into any investment is the rule of 72. This rule means that if you take 72 divided by the interest rate you’ll figure out the estimated number of years it will take for your interest to double your initial investment.

Personal Capital and Acorns are some of the most helpful investing apps you can use to step up your investment game.

Where should I put my budget?

Figuring out where to even put your budget can get complicated. You can use excel or make your own table in Word or Google Docs or any note taking program of your choice. There are also many free budget templates online that you can print out and use. Budget tools are all around if you take the time to look and decide on which ones best suit your needs.

Click here for a free budget worksheet from the Federal Trade Commission.

You can also use budgeting apps to keep track of all your bills, expenses, plans, and goals. Some of these apps even allow you to connect your budget to your financial accounts.

Control your spending

Sometimes it can be difficult to control your varied expenses throughout the month and track your spending. You can make controlling how much you spend each month easier by using a prepaid debit card. With a prepaid debit card you put money on it like a gift card to yourself almost. You can also use a similar method of spending control by just taking money out and only using that cash for your varied expenses each week.

PocketGuard is an app that can help you track your purchases.

Get a Side Gig

Getting an extra source of income can really come in handy. There are a million different kinds of side hustles any ambitious person these days can get into. You can babysit, drive for uber, or sell your own products. The possibilities are endless and it never hurts to have a little extra money each month.

Plan to Decrease Debts

Debt can be a real financial weight on your shoulders, but it can also be a necessary evil in order to get a house, get a car, get through college, and much more. Decreasing the amount of debts you owe can still help alleviate some of that weight and provide more financial comfort and peace of mind.

So it’s important to budget with paying down your debts in mind. You can pay down debts quicker by planning to spend more on that fixed/necessary expenses each month, by spending less on varied expenses, or by getting another job to provide more income to put into your debts each month.
 
Budgeting doesn’t have to be hard. All you really need is 4 lists and a calculator! Everyone should practice using a budget now so that you can control your finances instead of your finances controlling you.


READ MORE
Check out some of other Check City articles on budgeting:
Budgeting for Dummies
 
What is a Budget?
 
Budgeting Tips You May Not Have Thought of Before
 
3 Simple Tips to Building a Budget
 
Ways to Keep Track of Your Spending

How Much Do Braces Cost?

braces



Generally people need braces because there is something wrong with their teeth alignment. But there are many reasons that problems with teeth alignment can occur. Some people just have genetics that influence their teeth, making them more prone to certain oral problems. Other problems arise from external factors that we allow to negatively affect our teeth.

Whatever your circumstances, whether you’re younger or older, it is never too late to seek the orthodontic care you need to be more comfortable and confident. Many people worry about paying for braces though, keeping themselves from getting the care they need. But with some research on your part and understanding your insurance plan, you can have a pretty good idea how much braces will cost you.

But before we go figuring out how much braces cost, let’s take a look at how to know when you or your child needs a checkup with your orthodontics . . .

Why a Kid Might Need Braces:

Losing Teeth Early

Generally the age range that kids lose their baby teeth is from 6 to 12 years old. But if they start losing their baby teeth sooner than 6 years old then you might want to take them to get checked out by your orthodontics. Losing baby teeth too early can be a sign of a bigger underlying issue and can affect their jaw and their permanent teeth as they grow older.

Crowded Teeth

When a child has crowded teeth, it means that their mouth doesn’t have enough space for their future adult teeth to come in. Leaving crowded teeth untreated leads to impacted teeth, which is an even bigger problem and involves much more invasive treatment to correct. If you are worried your child’s mouth isn’t going to be big enough for their adult teeth then consult your orthodontist.

Jaw Issues

Another major variable in teeth alignment and overall mouth health is your jaw structure. Orthodontists don’t just work on teeth, they also work on certain jaw issues. Signs that your child has a jaw related issue is if they have trouble biting, chewing, and breathing properly.

Thumb Sucking

Sucking on a thumb or pacifier is a common habit for young children. Usually as a child gets older they grow out of these habits, but some children have a more difficult time with this than others. It is advised that children who suck on thumbs and pacifiers should stop around 6 or 7 years old, if not sooner. If the habit continues past this point there is a chance that their teeth will protrude, creating a misaligned bite.

Why an Adult Might Need Braces:

Jaw pain, face pain, headaches, and earaches

Oftentimes a headache is just a headache, but sometimes this can be a sign that an issue with your jaw structure is causing you head pain.

Issues with chewing, speaking, or biting

Similar to children, these kinds of problems can be linked to jaw and teeth issues.

Jaw popping

If you find your jaw excessively popping you may want to mention it to your orthodontist.

Different Types of Braces:

If you need treatment at some point you are going to have to choose which kind of braces to get. When people think of braces they usually picture the metal kind, but now there are several other options to choose from.

Which kind of braces you get will affect how long you will have braces and what you will pay for them. Orthodontic treatments have come a long way over the years, and now there are a variety of treatment options, all of which vary in cost, effectiveness, treatment period lengths, and noticeability. Now, Invisalign isn’t the only type of invisible braces.

Metal Braces

Metal braces are the traditional kind of braces with metal brackets. They are usually the cheapest option and are the most visible.

Lingual Braces

Lingual braces are just like traditional metal braces, except they go on the back of your teeth instead of the front. This makes them less visible than traditional braces, but not all dentists will do lingual braces.

Ceramic Braces

Ceramic braces are like traditional metal braces except they are made of ceramic instead of metal. They still go on the front of your teeth but because their color is closer to the color of teeth they are less noticeable.

Clear Aligners

Clear aligners, like Invisalign, are the least noticeable form of braces. They are clear plastic trays that fit over your teeth and get changed out for a new tray every so often. Clear aligners usually cost the most.


different-kinds-braces

Other Orthodontic Services and Treatments:

Retainers

Retainers are generally used after you have finished your treatment period with braces. Retainers are used to make sure your teeth stay the way your braces have worked to align them as you transition into not wearing braces anymore. Retainers usually have a metal band that hug your teeth and a plastic mold that is custom fitted to the roof of your mouth.

Space Maintainers

If a child loses their baby teeth earlier than normal they might need to use space maintainers. This will keep the spaces between their teeth open so that there is room for the adult teeth to come in later and ensure that their adult teeth grow into the correct spots.

Mouth Guards

Mouth guards are often worn by athletes while they are playing a sport. An orthodontist can custom fit the mouth guard for maximum protection during games and competitions. You can also buy mouth guards over-the-counter, but they are not as comfortable as a custom fitted guard and are less effective at protecting an individual’s teeth.

Mouth guards can also be called night guards and can be used by people who grind or clench their teeth in their sleep. Night guards protect your teeth from damage and pain due to teeth grinding.

How Much Do Braces Cost?

Now that we have determined whether you need braces and talked about the different kinds of braces you can get, it’s time to figure out the cost. The cost of braces and treatment is going to depend on several different variables:

  1. The type of braces you get
  2. Whether you’re an adult or a child
  3. How long you’re going to need them
  4. What kind of dental issue needs correcting
  5. Your dental insurance
  6. Your orthodontist
  7. Your region

These types of factors will all weigh in on how much you end up spending on braces. Metal braces are usually the least expensive option while clear aligners, like Invisalign, are going to be the most expensive option. Orthodontic treatment for children generally costs a little less than it does for adults, but this will also depend on your orthodontist. The longer you need to have braces and the more severe the problem is the more expensive the overall treatment is going to be as well because these will require more work from the orthodontist and more appointments.

Lastly, factors like your insurance company, the orthodontist you use, and where you live can also factor into how much you spend on braces. Different insurance policies will provide different coverage for braces, different orthodontist offices will have their own prices in place, and sometimes more rural areas end up being cheaper than busier ones.

How much do braces cost for adults?

Regular metal braces for an adult can cost anywhere between $4,000 and $5,000.

How much do braces cost for kids?

Regular metal braces for kids can cost anywhere from $3,000 to $7,000, depending on how much treatment their teeth need.

How much do braces cost with or without insurance?

It is always going to be helpful to have insurance to cover the cost of braces. So make sure you contact your insurance and understand what they will and won’t cover so you can get your maximum benefits. With insurance your braces can cost closer to $3,407, while the average cost of braces without insurance is $4,937.

How much do braces cost a month?

The cost of your monthly payments will depend on whatever plan you have with your orthodontist, your insurance, and what the overall cost of your braces end up being.

How to Figure Out the Cost For YOU

Whatever braces you choose will depend on what needs fixed, your pocket, and your preference. After figuring out what needs fixed and what your preferences are you can easily figure out the possible demand on your pocket by following two simple steps.

But before you go calling your orthodontist office and your insurance make sure you know ahead of time whether you need braces, how severe your case is or how long you will probably need them for, and which kind of braces you would like to use. Then you will simply:

  1. Check with your insurance to see what they will and won’t cover.
  2. Contact your orthodontist (or various ones if you’re searching) to see what all their options, payment plans, and costs are. Some orthodontists will have a monthly payment plan you can take advantage of.

Taking care of all aspects of our health, including our teeth, is an important part of being a healthy human being. Orthodontic treatment can be expensive, but by knowing your options and asking the right questions you can be on top of your orthodontic plans.


READ MORE
Check out Angie’s List to see more about different treatment types and their costs.


Read more about the pros and cons of different braces types.


Read here the signs of needing braces for adults and children.


Visit the American Association of Orthodontics to see answers to frequently asked orthodontic questions.


Read the Check City article, “Tip of The Week: When You Get a Raise, Save More, Don’t Spend More” to learn about how raises can help you save for braces.


Check out our Personal Loans Page to see how Check City can help you with unexpected bills such as medical and dental bills.


FEATURE IMAGE BY LESLY JUAREZ

How Much House Can I Afford?





Maybe you are a first-time home buyer and have no idea what you are doing, or maybe you’ve bought a home before, but this time you want to make sure you are being financially savvy in your decisions. Either way, there are so many things that go into buying a house that the overall process can be daunting. But by understanding how to budget for a home, and taking advantage of your local financial services, you can tackle the house-buying world and how it applies to you on an individual level.

The process for buying a house is not going to be the same for everyone. We all have different financial situations, incomes, salaries, bills, debts, expenses, and spending behaviors. We even all have different desires, wants, needs, and hobbies that go into how we spend our income and will therefore also affect our buying options when looking for a home. All of these variables should be carefully weighed and considered as you embark on your home-buying journey.

First let’s go over some key home-buying terms that you will want to be familiar with . . .

Definition of Key Terms

For an even bigger list of terms and definitions that you might need to know when buying a house, see the National Association of Home Builders’ (NAHB) Home Buyer’s Dictionary Page.

The Principal

The price of a home can also be referred to as the principal, especially by mortgage lenders. It refers to the base cost of the home, and does not include interest, fees, or closing costs. Many people use mortgages to pay for their home, meaning you’ll want to figure out how much mortgage you can afford when shopping home prices.

Down Payment

The down payment on a home is whatever the buyer can pay of the total price upfront. The less money put down in the beginning, the higher the interest rate on the mortgage will be, and the more the buyer will have to borrow from a lender. But the more you can put down in the beginning, the less you will have to borrow, and your interest rate will be lower as well. It is always advisable to pay as much for the house upfront as you can.

Homeowner’s Association Fees (HOA)

Some communities will be part of a Homeowner’s Association (HOA). Communities with an HOA are part of a planned community that often comes with communal benefits and amenities, like a pool, or snow ploughing. HOA’s also often come with certain rules for those who live in that community—rules about lawn upkeep and such—so make sure you understand the requirements and benefits of the HOA before committing to a house in their neighborhood.

Property Taxes

Owning a home and property will require you to pay property taxes each year. The percentage you pay in property taxes will depend on the location and value of your home. When looking in different locations for your home be sure to also look into what the property taxes are like in that area.

Mortgage

A mortgage is the loan and payment plan you go on with a lender to eventually pay off your home. Unless you can afford to pay the entire price of the home upfront (100% down payment), you’ll need to take out a mortgage with a lender to help eventually pay off your home through monthly mortgage payments instead of all at once.

Mortgages come with different time periods to pay back the loan. There are 15-year mortgages, 30-year mortgages, and a 5/1 Adjustable Rate Mortgage (ARM).

  • For a 15-year mortgage your payments are going to go up more and more each year and your payments are going to be higher in general. But you’ll pay less interest overall and pay off your mortgage quicker.
  • A 30-year mortgage is going to allow for smaller payments, but in the long run you will pay more in interest, and it will take longer for you to pay off your mortgage.
  • A 5/1 adjustable rate mortgage is another kind of 30-year mortgage, but your interest rate stays the same for the first five years of the loan. After that initial five years, your interest becomes subject to whatever market changes there are for interest rates.
Homeowner’s Insurance

Homeowner’s insurance is insurance for your home. It can protect you when disasters, natural or otherwise, affect your house. It can even cover some of the costs for damages caused by natural disasters or crime. It can also protect your possessions in these same scenarios and help you to replace whatever was lost or stolen. It is not illegal to not have homeowner’s insurance, but many lenders will require it. There are two kinds of homeowner’s insurance:

  • Cash-value coverage will help cover the costs of damages when they occur, but won’t usually be enough to rebuild your home should you need to.
  • Replacement-cost coverage is insurance that will cover the total cost of your house if you should ever need to rebuild it due to disasters. Most advisers will recommend you get this kind of homeowner’s insurance since it covers more.
Private Mortgage Insurance (PMI)

PMI stands for Private Mortgage Insurance. It is a form of insurance that lenders use to reduce their risks when a borrower can’t afford a down payment of at least 20 percent. Your lender will require a PMI when they are lending you more than 80% of your home’s total value. PMI is also a very costly form of insurance, but there are ways to get rid of it later by refinancing.

Interest Rate

Interest rate is a percentage of money added to your loan as payment to the lenders for borrowing a home loan from them. The interest rate you get on your mortgage will be determined based on your credit history and score. Usually the interest rate will be included in your monthly mortgage payments.

Credit History

Your credit history comes from your credit report and shows your history of paying debts and bills. It is meant to show how often you are on time or late in payments and your overall level of responsibility with your finances. Your credit history and score are what lenders will look at when deciding the interest rate they will put on your mortgage.

Credit Score

Your credit score differs from your credit history in that it is an overall score calculated from your credit history to show how much of a credit risk you are for the lenders. Instead of looking at an entire credit report or history, lenders can simply look at this score to get a quick, overall idea of your credit’s well-being.

Gross Income

Gross income refers to your total income before taxes.

Net Income

Net income refers to your total income after taxes. It is also referred to as “take-home pay.”

Understanding Mortgages

When applying for a mortgage, there are four main factors listed below that lenders will consider and that will influence the kind of mortgage and interest rate you can get:

  • Your income
  • Demands on your income, like debts, monthly bills, loans, and other expenses
  • Your credit history
  • Your credit score
Types of Mortgage Lenders

There are also five general categories of lenders that you can get your mortgage from, and each one comes with its own pros and cons.

  • Federal government agency lenders
    • Federal Housing Administration (FHA)
    • US Department of Agriculture (USDA): These mortgages can be for homes in more rural areas. The USDA can also be used to rebuild and rehabilitate old properties that qualify.
    • Department of Veterans Affairs (VA): These mortgages are for veterans. You can even use them to make your home more accessible.
  • State government lenders
  • Nonprofit lenders
  • Local lenders, banks, and credit unions
  • Larger banks and lenders

The 5 Steps of Buying a Home

Step 1: Look at Your Credit Score

When starting the house hunt many people like to begin with the fun part by getting on Zillow and browsing for the perfect home. But you can’t figure out how much house you can afford on Zillow. If you are serious about buying a home, then you should look at your credit score before you start looking for a home. While looking at your credit score you will want to keep your eye out for the following:

  • See where your credit score is at—how good or bad it is.
  • Check your credit report for any errors and have them corrected.
    • Get on this now because if you need to correct your credit report, the changes will take some time, even months, to correct.
  • Look for ways you can better your credit score.
    • Figure out the reasons your credit score is lower than you want and develop plans to fix those issues or habits.
    • Paying down your general debt will also help your credit score.
Step 2: Do Calculations and Budgeting

The big question most people want to know when looking for a home is how much can I afford? There are many methods for figuring out your own budget for buying a home. Which method you choose will depend on what feels most comfortable for you. But in general, financial advisers will tell you to spend 2.5 to 5 times your annual salary on a home. Again, it is ultimately up to you where you decide to land in this range.
Method One: Based on Your Savings
People are generally advised to pay at least a 20% down payment. In order to figure out the amount of house you can afford based on what you have saved for a down payment, use the following equation:

Method Two: Based on Your Annual Income
If you want a quick estimate of the amount you can afford for a house, below is an easy calculation you can do based on your annual income.

Method Three: the 28/36 Rule
The 28/36 rule is a recommendation that your budget has no more than a 28% front-end ratio and a 36% back-end ratio. Lenders will look at both these ratios to decide your mortgage loan, so it is important to understand where you stand according to this ratio because this is how most lenders will decide what you can afford to borrow from them. When budgeting for a home, you can use this ratio to see if you meet these requirements and to see how financially ready you are to buy a home.

  • Front-end refers to your total housing payments (PITI) to income ratio.
  • Your total housing payments is not just referring to the Principal, but also the Interest, Taxes, and Insurance (hence, PITI). This front-end ratio means that you should not spend more than 28% of your monthly gross income on your total monthly mortgage payments.

  • Back-end refers to your total debt to income ratio (DTI).
  • This back-end ratio means that you should not spend more than 36% of your monthly gross income on debts. Debts include credit card payments, child support, auto loans, student loans, and any other debts you may have.

Dave Ramsey’s Advice

Dave Ramsey has influenced and guided a lot of people in their financial affairs with his knowledge. Below is some of his basic advice for buying a home:

  • Pay a 100% down payment in cash when you can.
  • Choose a 15-year mortgage over a 30-year mortgage.
  • Keep your mortgage payments (plus insurance and taxes) no more than 25% of your take-home pay (net income).
    So unlike the 28/36 rule, Dave Ramsey advises that your front-end ratio be no more than 25%, instead of 28 percent. He also advises that you use this percentage on your net income, or take-home pay, rather than your gross income, because this will better reflect the money actually going to your account after taxes.
What to Remember When Budgeting:

The Mortgage:
Just because a lender qualifies you for a certain amount that does not mean you should use it all. How much mortgage you can qualify for is very different from how much mortgage you should use. The maximum loan amount that your lender is willing to let you borrow, does not reflect your personal budget and what you actually want to be paying each month. This is why being able to do your own budgeting and calculations is important because then you can see and decide for yourself how much you are willing to borrow.
The Down Payment:
When preparing to buy a home, what you really want to be doing is preparing for the down payment. The higher a down payment you can afford the better.

Your down payment should be at least 20% of the total price of the house. But, you can find loans that accommodate lower down payments if that’s what you require:

  • Fannie Mae, Freddie Mac, the Federal Housing Administration, the USDA, and the Department of Veterans Affairs are just a few options for low down payment mortgages.

Other Costs and Fees Associated with Buying a Home:

  • Closing costs and fees. Some examples of what may be included in the closing costs are appraisal fees, loan fees, attorney fees, and house inspection fees. Closing costs and fees will vary and depend on local tax laws and the cost of your home. If you want to estimate how much your closing costs might be, they generally range between 2 and 5% of the cost of your home.
  • Taxes, insurance, and HOA fees for certain neighborhoods.
  • Home maintenance, upgrades, and repairs: Homes need regular maintenance, remodeling, normal upkeep over the years, and repairs when emergencies and damages suddenly occur.
  • You’ll need to potentially buy appliances, furniture, and decorations.
  • You’ll be responsible for paying all your utilities, which can include, heat, electricity, water, sewage, trash removal, cable television, and telephone services.

Your Other Financial Goals:
Buying a home is a big financial goal and dream in life, but you probably have other financial hopes and dreams as well. Don’t forget to factor these in as you budget and look for a home. Some of these other goals may include general savings, saving for retirement, buying a new car, raising children, paying for their college, starting a business, vacations, trips, and any other hobbies, interests, or personal endeavors that may also require a place in your budget.
Know Yourself:
It is important to understand the kind of spender you are. This is another reason doing your own budget for your future house is a good idea, because then you can thoroughly be aware of your spending habits and therefore be more realistic when it comes to budgeting in a mortgage as well.

But you also need to be mindful of how you handle debt. For some people, being in a certain amount of debt can be stressful, while others don’t mind it so much. Be aware of whether having a larger mortgage on your hands is going to bother you or negatively impact your internal well-being. This will also factor into what you decide to do financially about budgeting for a mortgage.

You can also hire a personal financer to look over all these factors for you and take a more personal, detailed look into all of the many costs involved for you individually. Hiring a professional may be wise if you do not have the time or patience to look into these variables yourself. It is less wise to rely solely on a lender’s analysis because they will only look at income and credit history, and not consider your personal, bigger picture.

Step 3: Find Your Agent

Buyer’s Agent
A buyer’s agent is the kind of agent you want to be working with directly because they are meant to work with the buyer (you) and will thus work to get you the best price you can get.
Seller’s Agent
This is not who you want to be working with directly because they will be trying to get the best price for the seller. Though usually the buyer and seller agents will mediate offers and agreements and work alongside each other in that way.

Now it’s time for the fun part—the home search! After you’ve done all your budgeting and have all your ducks in a neat, planned-out row, you can begin to search for the home that fits your wants, needs, and budget!

Remember all the budgeting calculations you did above when you are filtering in your price range. It’s recommended to select a price range 10% above and below your calculations as a cushion when you are searching.

What to look for in location:

  • A healthy economy: low unemployment rates and good incomes
  • A good real estate market: look at whether the homes in the neighborhood are selling well, meaning they sell close to or above their asking price.
  • A healthy community: look for a range of ages in the residents and families nearby.
  • A good school district: even if you don’t have children, being in a good school district will help your home retain its value and make selling your home easier should you need to sell later down the road.
Step 5: Enter Your Contract and Close the Deal!

Once you’ve made your choice you can work with your agent to make an offer to the sellers. If all goes through, your agent will draw up the papers and officialize a closing date, which is usually 45 to 60 days after the offer was accepted by the sellers.

When entering into a housing contract you will first want to make sure you have the following common contingencies in your agreement. This means that your contract relies on these personal requirements being met first:

  • obtaining a mortgage
  • getting a home inspection

Buying a home is a big deal and naturally you want to be as knowledgeable and savvy about the basics as possible. By applying these basic rules you will know how to buy a home in the smartest way possible.


READ MORE
Visit the Department of Housing and Urban Development (HUD) for seminars and counseling about buying a home.


Visit the HUD’s common questions page for even more answers to your home-buying questions.


Use an online “How Much House Can I Afford” calculator to plug in your numbers and quickly see how much house you can afford.


Listen to NPR episodes about home-buying to learn more about the home-buying world.


FEATURE IMAGE BY BRENO ASSIS

How I Learned to Stop Living Paycheck to Paycheck

Living paycheck to paycheck is actually very common in the United States. In fact, you could say that most Americans live paycheck to paycheck. As many as 78% of Americans live paycheck to paycheck—that’s 8 out of every 10 workers. And it’s not just low income workers that are living this way, even many workers who make $100,000 a year or more report to still be living paycheck to paycheck. This tells us that living paycheck to paycheck isn’t a problem of money, it’s a problem of mentality or the ability to keep ahead of your finances.

Why You Want to Stop Living Paycheck to Paycheck

The big problem with living paycheck to paycheck is you don’t have any extra funds each month. This makes you vulnerable when disasters and emergencies strike. If all of your monthly income is being used each month then you won’t have any funds to lean on when you suddenly have to repair your house after a flood, or you need to move, or travel for a wedding. It also keeps you from saving for important things like,

  • Savings
  • Retirement
  • Car
  • House
  • Repairs and renovations
  • Emergencies
  • Tuition
  • Accumulating wealth

Assess why you are living paycheck to paycheck

There are many reasons to be living paycheck to paycheck, but it usually comes down to one of three reasons. Either you aren’t making enough money, you are spending too much each month, or you have essential spending like debts or housing that overtake your whole monthly budget. After you determine which of these three reasons applies to you, you can better determine how to fix your finances.

Basically you need to see what is overtaking your budget and readjust to be living within your means. When you are living within your means you are able to save which helps you live better later on in life. Living within your means and putting away into savings each month is how to budget for the long-term.

Get a new job

If you just aren’t making enough money to live on, then you need to get a better job, a raise, or a second job or side hustle that can help make up for the little you’re making where you’re at. There are lots of job websites out there right now to help you find a better job. There are also many programs that can get you the training, education, or certifications necessary to help you qualify for better paying jobs.

Control your spending

If the problem is your personal spending habits, then you want to deal with this by controlling yourself and your budget more. this may sound boring or depressing to have to control your spending so strictly, but think of it as figuring out how much you are actually allowed to spend each month, rather than focusing on how much you can’t spend.

Downsize the way you live

You also might need to adjust your living situation. You might be paying too much for rent, compared to how much you make each month. If this is the case than you might need to move so your mortgage or rent is more doable within your budget. You can also downsize other aspects of your life, like transportation. Downsize to a more affordable vehicle, or try carpooling or biking to work to save on gas.

Take care of debts first

If you have a lot of debts that are bogging your budget down, you can try debt consolidation with your bank to get a better interest rate or payment plan. You can also downsize the way you live so that you can pay off your debts more quickly.
The rest of this article was written by a guest author named Adam. He wanted to share with everyone some helpful tips that he’s used to stop living paycheck to paycheck. We hope you enjoy his insights as much as we have!

How Adam Stopped Living Paycheck to Paycheck

Sometimes, during the week leading up to payday, I find myself clinging for dear life to my finances. If I can just survive until I get paid, I think to myself, then everything will be OK. I go into crisis mode, axing all discretionary spending and hoping that no unexpected expenses pop up.

When my paycheck finally appears in the mail, I breathe a huge sigh of relief. And then I revert to my old spending habits—eating out, buying the latest gadgets, etc. A few weeks pass, and I’m right back where I started, panicking about making it to my next paycheck.

It’s a cruel cycle, like the spin cycle of a washing machine. But instead of coming out clean at the end, I would just wind up dizzy and half-drowned.

If any of this sounds familiar, you’re not alone. Thankfully, I found a way to escape the constant spin cycle and stop living paycheck to paycheck.

My Arch-Nemesis: The Dreaded Budget

Saving money does not come naturally to me, and money gets spent often without me even realizing it. I knew right off the bat that I was going to get nowhere without a budget.

Budgets take hard work and discipline especially if you want to stop living paycheck to paycheck. You need the self-control to resist making any unnecessary purchases, and you need the personal honesty required to separate wants from needs.

Taking a Long, Hard Look at My Spending

It was time to take out the old magnifying glass and look at how I was really spending my money.
I was shocked. Did I really spend that much money eating out every month? It was atrocious how much of my paycheck went to entertainment.

As soon as I had a strong grasp on where I was spending my money, I was able to craft a budget that accounted for my needs, and even made a little room for some wants (for the sake of my sanity).

My Game Plan for Dealing with Credit Card Debt

One of the big motivators for turning my finances around was that I wanted so badly to get out of debt. Over the years, my spending habits had been subsidized by various credit cards, and I’d built up quite a chunk of debt.

Thankfully, my credit card debt provided short term goals to help me along the way. Basically, I would zero in on one balance, keeping all other balances on the back burner. Once that one card was paid off, I felt the accomplishment of having achieved a goal, which helped me forge ahead with my budget.

Reevaluating Progress

Every six months or so, I take time to reevaluate my budget and spending, and make adjustments accordingly. As I’ve reduced my debt and added to my savings, things have gotten easier. I’m no longer living paycheck to paycheck, and I’ve even been able to fit in a few purchases for things I really want, like gadgets and such.

How did you stop living paycheck to paycheck? Leave your tips in the comments section below.

6 Ways to Use Cheap Clothing Stores to Save Money

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It’s tempting to buy all of your clothes new, at full-price from your favorite stores, but there is a better way to do it. If you want to get a new back-to-school wardrobe on a budget, here are a few tips for places to visit to get the most for your money.

Second-Hand Stores

Good Will and Salvation Army are the original cheap clothing stores and have always been reliable standbys when you need to get some new clothes for less money. However, there are other options out there. As those racks tend to be combed clean of any recognizable name brands, try searching in your area for other vintage stores. Popular chains around the country that offer this include Plato’s Closet and Buffalo Exchange.

Trade Your Clothes

If you’re looking to donate clothes and get some extra cash, both of these cheap clothing stores also pay you for your clothes. If you bring your clothes in they will be examined for wear and tear and you will be offered a percentage of the cash the store plans to sell the items for. Some places offer you slightly more in store credit, so you can trade in your clothes and be motivated to spend the money at their store instead of taking the cash.

Outlet Stores

Outlet stores are the designer end of cheap clothing stores. If you have your heart set on certain name brands (or you can’t bring yourself to wear second-hand clothing), outlet stores are a cheap alternative to going to the mall. This is because the clothing sold there is either out of season, or it was created with cheaper fabrics or less detail.

Clearance Rack

A lot of money can be saved by shopping off of the clearance rack. Oftentimes there is nothing wrong with anything on the rack, it is just the last one in its size, or it was returned after a few days. Nordstrom is one of the few department stores that has its own clearance store, called Nordstrom Rack.

Friend’s Closets

Everyone’s wardrobes are constantly in flux. Find friends of yours who are the same size and compare clothes that you want to get rid of. You may find something you love in your friend’s closet that he or she was about to donate.

Cheap Clothing Websites

Shopping online can be risky, as you’re not entirely sure what will fit and what won’t. However, if you take your measurements and compare with what is online, you’re much more likely to get something that fits. There are deals to be found every day – and if something you buy doesn’t fit and you can’t return it, you can always try selling it at a local exchange store.

Back to school shopping can be daunting, and in the end it is probably going to be expensive – but not as expensive as it has to be. You can get more for your money by trying the tips above rather than going straight to the mall and buying clothes off the rack. Keep track of how much money you’ve spent and how many items of clothing you got and compare it to your friends’ lists. You’ll be surprised how much you saved.

How to Budget Your Money Like Robin Hood

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“Steal from the rich, and give to the poor.” That was Robin Hood’s cry. As the greedy Prince John taxed away all the people’s money, leaving them destitute, a hero had to rise up. So Robin Hood stepped up and became the hero that everyone looked to for help and hope.

Perhaps inside of you, you have an inner Prince John lurking in your heart preventing you from learning how to budget your money. Does that greedy side steal away precious money for pleasure, while so many of your needs are left penniless? An insatiable lust for designer clothes, cutting edge technology, entertainment, gourmet food, or even little things like nail polish or candy bars could be emptying your coffers, leaving car payments, rent, student loans, and other important bills unpaid.

If so, it’s time to tap into your soul and bring out the hero – your inner Robin Hood – to rescue you from greed and budget your money for good! Only then, can you discover exactly how to budget your money.

Your Key: Good Budgeting Requires Courage and Strength

As you try to breathe life into your inner Robin Hood, it’s important to believe that you possess both courage and strength—it will take both to overcome your greedy villain, take back the money that is being improperly used and return it to the things that need it.

If you don’t think you have courage or strength, you’re wrong. Even realizing that you have a problem shows that you have already taken the first steps on this hero’s path. You know who the enemy is and that you need to do something about it. Your courage and strength are already starting to emerge. Don’t let anyone take this away from you in your journey toward financial independence!

The Plan of Attack

Next comes the game plan. As Robin Hood and his Merry Men (no doubt you also have family and/or friends willing to support you) prepared to steal back the money from Prince John, they laid out a careful plan to ensure success.
For you, this means sitting down and planning exactly how to budget your money. Really, it’s just a matter of redistribution of wealth within your own little fiefdom—your personal finances.

First, identify how much money is being siphoned away unnecessarily that you can take back and use elsewhere. You don’t necessarily have to go cold turkey, but you need to commit to redistributing a sizable amount of that money towards more important needs.

Second, rank your expenses in order of importance to help you understand your needs.
Third, make sure the most demanding needs get the most money back. Carefully plan out how much of your income will go where, and put it in writing.

Remember, life is unpredictable. Sometimes no matter how well you plan ahead unexpected expenses will come up. If you find that one month you end up coming up a little short that’s ok. Do what you need to do to take care of your emergency expense, whether it’s getting a payday loan or paying with a credit card and then readjust your budget to get them paid off as quickly as possible.

Turn the Key to Put Your Plan into Action

This, of course, is the most challenging step. And that’s ok – because real heroes are made by overcoming challenges. So sling on your figurative bow and invade that castle of greed. Stick strictly to your plan and don’t back down in the face of opposition or temptation. (But if you do slip, don’t despair! Get right back up and keep going!)

Yes – changing your spending habits will be difficult. But you can do it! Always keep in mind the purpose that you are fighting for and soon, your battle will be won!

Learning how to budget your money is an epic journey. Don’t expect to get there overnight, and remember: we’ll be with you when you need a little help along the way.

Budgeting for College Students 101

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College is a great time to explore adulthood and learn a few things the hard way.

You’re going to make mistakes, that’s a given. I know I did.

Of course, now that I’m blessed with 20/20 hindsight, there are a few things I would definitely do differently. I definitely would have asked that cute girl in my French class out on a date, and I probably wouldn’t have eaten so much food from vending machines and microwaves. I also wish I’d spent more time studying, less time playing video games, etc. etc.

However, rather than focusing on a depressing list of regrets, let’s focus on a few things that could actually be useful.
I’m talking about making a college budget. If you mess up with money while in college, your life can be negatively affected for years to come. Let’s say, for example, you damage your credit. Suddenly it becomes incredibly difficult for you to do things like buy a car, find an apartment, and even land a job.

To help you get a head start on figuring out your financial smarts, here are two little college student budget tips I wish someone had shared with me at the start of my freshmen year.

Keep Track of the Little Expenses

While it’s important to understand the difference between wants and needs, for me the most important part of sticking to a college budget is keeping track of the little things. I’m talking about those little purchases that are easy to forget about but have a way of adding up fast.

The best thing about a college student budget is that you can allow yourself to make these small purchases. As long as you remembered to make room for them in your budget then you really can buy something small, like a cup of coffee at the bookstore café, without feeling guilty. Enjoy that snack from the vending machine – if you really must! Just keep track of the small purchases, and once you’ve reached your limit, stop.

Don’t shop for Textbooks at the Campus Bookstore

One of the biggest budgeting tips for college students is save money on your books! I don’t know about your college’s bookstore, but mine was a bona fide racketeering enterprise! The prices students were charged for required textbooks should have been illegal. I was lucky that I wasn’t majoring in the hard sciences—textbooks for those classes could easily reach $300 for one book! My English Lit books were cheaper, but I had to buy 12 of them at a time for a single course.

Thankfully, a new technology was invented 30 or so years ago. You might have heard of it—it’s called the internet.
Seriously, buy all your books online. Look for used copies on Amazon. Scavenge for books on Craigslist. Find an online forum where you can swap books with other students. Whatever route you go to acquire your texts, try to avoid the campus bookstore like you would the plague. This simple tip will single handedly save your college budget.

It took me about three semesters before I figured out I could buy my textbooks online and pay a fraction of what I was spending at the bookstore. My emotions upon making this discovery ranged from feelings of betrayal all the way to outrage – with a little triumph once the purchases were made online and I realized how much money I had left over to spend on the vending machines…

So there you have it, my top two financial tips for new college students. For more in-depth budgeting advice, take a personal finance course or visit a financial aid advisor at your college. Oh, and when you do save money on book purchases, ask that cute girl in [insert name of class here] out!

Do you have any of your own budgeting tips for college students? Share your tips in the comments section below. Don’t forget to check out our regular blogs for more great budgeting tips.

How to Make a Household Budget in 4 Simple Steps

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You’ve heard the saying “love is blind,” but when it comes to your partner’s financial status you should take those blinders off before you take the plunge and say I do.

Follow these 4 steps with your partner to avoid any ugly surprises after the honeymoon ends. Once you’ve discussed these 4 steps you can put those blinders back on (you might be glad you have them in about 10 years!)

Step 1: Begin the Discussion

Come prepared to talk openly and honestly with each other about your personal financial circumstances. Make sure that each of you know how to make a budget, if you don’t consult a professional. It’s important that you do this without blaming or judging one another; remember you’re in this together now. This is the time to lay it all out on the table, don’t hide anything like debt or bad credit from your partner. It will only come back to haunt you later.

Here’s a list of questions to ask each other. These will help you understand the financial make-up and mindset of your partner before you dive into specific numbers:

  • How did your parent’s make a household budget? Did they talk to you about money?
  • Are you a spender or a saver? How do you decide whether or not you should buy something?
  • What does money mean to you and how much is enough?
  • What kind of lifestyle do you want? What are your goals or dreams? Example: Do you want to travel to exotic places or is early retirement more important?
  • Do you both want to work or go to school? Do you want kids? Is it important that one of you stay home with kids?

Step 2: Look at the Numbers

Figure out where you are now so you can set some goals for the future. What is your credit score, potential combined income, debt, loans, bills, etc? Crunch the numbers and set a household budget. If you aren’t sure about your categories, track your spending for one to two months and then start a household budget.

If you’ve already determined that one of you will stay home to raise a family, it’s important to not include that person’s income when budgeting for your future together. If you can get by without that second income, try putting it in a savings account. That way you will not become accustomed to having the extra money and you could have something to fall back on should you need it.

Step 3: Budget and set Goals

There are a lot of different ways to set up a budget, such as using Excel, Quicken, or mint.com. Find one that works for you and commit to sticking to your household budget.

Dreaming of the future is exciting, but without a solid plan you might lose focus or fall into unwanted debt. Decide on these goals now so you can succeed in following your dreams:

  • Determine your wants vs. needs
  • What is your spending limit on big-ticket items before you need to consult your spouse? $100? $1,000?
  • Commit to each other to live on less than you earn, or as mentioned above, learn to live on one income. This sounds simple but is an essential step to any personal budget, but even more vital to the success of your household budget.
  • What will you do for income in the event that anything should happen to your spouse in the future?
  • Plan regular budget meetings. Who will pay bills? Are you on track, does your budget need any adjustments?
  • How will you handle friends and family who need or ask for money?
  • Now the fun part, set a few goals for your future. How much do you want in savings? Do you need to save for a down payment or a big trip? How about retirement?

Step 4: Ask the Professionals

Take a class or read some books together to learn additional financial skills. Consult an accountant to discuss how you should file your taxes once you are married and if you need to make any adjustments on your withholdings. Update any insurances or policies or obtain necessary insurance you need, such as health insurance or 401(k).

Do you have any suggestions on how to make a household budget? What has worked for you? Let us know in the comments section below. Also, keep an eye on our blog for more great tips on ways to budget and save money.

8 Money Management Tips You Can Apply Today

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Money management can sometimes feel like a tiresome exercise of self-denial. But it doesn’t have to be that way. In fact some of the more successful penny pinchers out there have gone so far as to claim it can be a fun and even enriching experience for themselves or their families! The key to this, they say, is to set goals or personal challenges, get creative and even turn it into a game.

Whether you are one of the persistent few with a well-established budget or are still trying to get yours started (again!) here are some simple but less utilized money management tips to make your money stretch a little further.

1. Beware the ATM!

Most financial institutions will not charge customers for ATM usage provided they have an account with the bank that operates that ATM. However, if you do not have an account there, or are not drawing from an account held with that facility, the institute operating that ATM will charge you for any withdrawals made via their machine. The fees incurred from these machines can really hurt your personal money management goals.

Worse still, you could incur fees from your own bank too, as some financial institutes will charge for the privilege of withdrawing from any machine not operated by their group. Though these fees are generally small, they add up if you are doing it regularly. So the next time you get the urge to use an ATM that is not operated by your bank, ask yourself if it’s really worth the double dip fees!

Pro Tip: Give yourself a specific amount of cash, for a specific amount of time, and see if you can stay on budget. Keep track of how much you spend, on what, in that period of time. Adjust accordingly but always aim to spend less and not more on non-essentials.

2. Eating Out: A Privilege, not a Right!

Eating out can be a fun way to spend time with friends and family, or satisfy a craving. But if you are eating out regularly, it can put a strain on your monthly budget. Especially if you are doing this every day for lunch too!

While you might not want to give up eating out altogether, by simply cutting down to one or two times a month, or legitimately special occasions, you can save more and make the times you do eat out really count.

Pro Tip: Use those nights you would usually eat out as an opportunity to make something adventurous at home. Try a new recipe or think of creative ways to combine the ingredients in your pantry! Try taking a homemade lunch into work with you at least three days a week. Brown bagging is a great opportunity to develop healthy habits as well as a healthier budget!

3. Learn a New Skill

No, it doesn’t have to be cooking! Learn to coupon and price match at the store and cut your grocery bill. Learn to sew and save money on new clothing purchases or clothing repairs/alterations. Learn to grow a garden that can supply your kitchen with healthy foods. The list is vast, the internet has resources!

Pro Tip: If you’re really adventurous, the internet is crammed full of demonstrations for things like making your own laundry detergent, soap and household cleaners! You can also learn how to revamp old furniture or repurpose items you’re not using – some of these skills could end up making you some extra cash!

4. Make it a Game

Have you ever tried to find yourself a new outfit using only the clearance racks? If so, try adding a price limit too – think “I will only buy this item if it is priced at $5 or below!” Or better yet, consider stores that sell “gently used” clothing.

Alternatively, challenge yourself to go without spending money for a set period of time. Play the mix and match game with the food in your fridge and pantry. If you run out of something less essential to the preservation of your sanity (and we’re not advocating that you deny yourself a caffeine fix or milk for your children’s cereal), see how long you can go without replacing it!

Pro Tip: Feel as though you really need to update your closet? Search for a website that offers mix and match clothing tips. Enter phrases like “the only 20 items you will ever need in your closet!” Instead of paying full price for these items, find them in a second hand store and follow the tips to create several outfits from them!

5. Stop Hoarding and Make Money

You’ve probably heard the saying “if you haven’t used it for a year, you don’t need it!” You might even be in the habit of decluttering your home on a regular basis. But what do you do with it all? Have you considered trying to make money off of the things you no longer need or use?

Pro Tip: Sites like eBay, Craig’s List and KSL are great tools for turning clutter into extra cash. Go through your closets, sheds and garages for well-preserved items you no longer need or use. Consider that piece of jewelry you never wear or furniture you’ve been storing with no intention of using again. Someone with restoration skills might jump at the chance to snap it up.

6. Get creative with gifting

If you have children, the odds are they get invited to birthday parties. Cue the pressure of finding just the right gift. We’ve all been there; trying to balance our money management goals on that fine line between what the little friend will love and what their parents will be impressed with! Depending on the neighborhood you live in or the size of your extended family, this little ritual can get out of hand. The solution is simple: Set a price limit on gifts.

Sound daunting? Make it a game. Most stores will have seasonal toy/craft clearances or a clearance aisle. It’s a great opportunity to grab a few things and put them in storage for future needs. Visit the dollar store for gift bags, tissue paper, bows and filler candy.

Pro Tip: For more intimate celebrations, encourage your loved ones to get creative and make gifts with personal appeal. Homemade coupons for dates or chores can make for more enriching experiences. Even Christmas shopping on a budget can be fun if you’re trying to come up with the most creative stocking fillers for the least amount of money.

7. Fantastic Fun for Free!

Use the internet and find out what’s going on in your community or surrounding areas for free or nearly free. Often times these activities make for great cultural or educational experiences as well as having entertainment value. Do you really need to see that movie when it first comes out? Can you wait for it to go to the dollar flicks? Or better yet, have a Redbox or Netflix and homemade popcorn night!

Pro Tip: How many free activities can you attend in a month? Who can find the most interesting free or nearly free activity?

8. Keep an Inspirational Reminder in Your Wallet

Keep a picture or reminder of your inspiration in your wallet. Your inspiration could be something you are saving for, a picture of your family or even a great quote that makes you feel ready to conquer the world. Whatever you choose, just make sure it is something that keeps you on the right track for spending!

All of these strategies really can help you meet the budget goals you set for yourself. But, only if you start applying them. So, don’t put it off, decide on at least one of these tips and start implementing today!

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