Category Archives: Money

6 Strategies to Reduce Your Rent

Strategies to Reduce Your RentIt is no secret that the supply of apartments and homes for rent has not kept up with demand. Renters face steeply rising costs in places such as: 

  • San Francisco, CA- up 14.9%
  • Seattle, WA- up 6.2%
  • Los Angeles, CA- up 5.6%

Those numbers are shocking. There are, however, strategies you can use to lower your rent. Here are some great tips to keep more money in your pocket.

  1. Emphasize Good Credit (if you have it) – Even in the tightest housing markets, landlords want tenants who pay their bills promptly. If you have a high credit score, bring it up in negotiations. Stress that the landlord does not have to worry about a costly eviction with someone like you.
  1. Talk about a Long-Term Lease – There are costs to finding new tenants each year. If you really like the property, ask for a two year lease with lower monthly rent. The rental company avoids having to find a new tenant next year, and you do not have the hassle of searching for a new place.
  1. Pay Early and/or Upfront – If you saved 3 months’ rent, use it as a bargaining chip. Ask for a decrease in rent in exchange for that money upfront. Also, inquire about discounts if you pay before the first of the month. Your landlord might conclude that your proposal improves his or her cash flow.
  1. Aim for a Big Reduction- A $50 rent reduction ($600 off per year) might be completely acceptable to you. However, ask for more than the amount you want (i.e. $100 off/$1,200 savings). There are several reasons.
  • Many negotiators feel that they have to “meet in the middle.” If you start out asking for $50 off your rent, the landlord is likely to counter with a $25 decrease in the rent. A more ambitious starting point gives you more flexibility in the negotiations.
  • You just might get the higher amount. There is an old cliché that you do not get anything if you do not ask for it. You do not know what pressure the landlord is under to fill the vacancy with a paying tenant.
  1. Consider Living with Your Parents – You probably read that phrase and went, “What? No!!” Hear me out. In some extremely tight rental markets, it makes more financial sense to live with your parents and pay them a small amount of rent versus paying a lot of money for a cramped, hole-in-the-wall apartment. Besides, if you are not involved with anyone, you will want companionship.
  1. Get a Roommate – Even if your parents live in a fabulous location and it makes sense financially, you just might not be able to stomach living with them. Consider a roommate. A roommate helps with expenses and keeps you company.

Make sure you take steps to protect yourself. Screen any roommate carefully so you do not end up living with someone who is a threat to your safety. Also, do not have a landline in your name on the property. You do not want to get stuck with someone else’s phone bill.

Achieving Your Goals

If you win a rent reduction, congratulations. Remember to get every agreement in writing. You want to avoid any costly disputes.

Lower rent enables you to save for other goals such as a house or retirement. Even in a tight market, responsible, trustworthy tenants are not always plentiful. Make sure you try these strategies if the rent in your area is really high.

7 Things to Do When Reducing Your Debt

7 Things to Do When Reducing Your DebtIt is no secret that Americans have a lot of debt. Here are just a few of the statistics.

You do not want to be trapped with a large debt load and no assets. Develop a plan and incorporate some of the following ideas.

  1. Prioritize Your Debts – Not all debts impact you equally. Examine your finances and identify the debts with the highest interest rates. Pay off the highest interest rate debt first.
  1. Negotiate, Negotiate – Whether it is the interest rate on your credit card or the cost of cell phone service, call and ask for a lower rate. Think of it this way, businesses negotiate with vendors to reduce their costs all of the time. Take the same measures to avoid unnecessary expenses.
  1. Beware Careful with Debt Consolidation Plans – It is normal to feel embarrassed and overwhelmed by your debt load. You might also be a shy person who gets nervous at the thought of negotiating with a company. It is tempting to use a debt consolidation company. Not so fast! Many “professional” debt consolidation plans/services are not beneficial to you. A credit card issuer might give the same interest rate reduction to the debt consolidation company that it would have given to you. Unfortunately, you now owe the negotiator a fee.
  1. Examine Balance Transfers – The balance transfer is another strategy that can have more downside than upside. Some cards hit you with a balance transfer fee that might total hundreds of dollars. If you try shifting debt from card to card multiple times, it lowers your credit score. A lower credit score equates to a higher interest rate for a car loan or mortgage. Do not make a balance transfer unless the deal is sound (i.e. 0% rate) and you pay off the card before the teaser rate expires.
  1. Monitor Your Expenses – How much do you spend on restaurant meals (breakfast, lunch, and dinner) during the week? Do you go shopping for a new coat and come out of the store with a new outfit and shoes too? “Convenience” and impulse buying really add up quickly for people. Reduce the number of times you eat a restaurant meal per week. Make a shopping list, stick to it, and do not get lured into buying extra items.
  1. Apply Extra Money – Did you earn a bonus at work? Receive an income tax refund? Inherit money from a relative? If you received a windfall, use it to pay down debts.
  1. Make More Money – You do not want to spend money frivolously. However, you need to maximize your earnings too. If you’re a top performer at your company, make a case for better compensation during your next review. Consider taking a side job and applying all of your earnings from it toward debt reduction.

Enjoy the Fruits of Your Labor

High debt loads cause anxiety and threaten your long-term financial freedom. One researcher found that households without credit card debt had 3 ½ times more savings than those with credit card debt. Do not let yourself become just another sad case. Start reducing your debt today.

Stopped Being Stressed About Money

Stopped Being Stressed About MoneyThe L.A. Times recently ran an excellent story about how millennials feel stressed about money. Establishing an emergency fund is a great way to reduce anxiety about your finances. Here are some important facts about emergency funds.

We all need a little cushion in our finances to help us with sudden expenses such as a car repair or a big out-of-pocket medical expense. More immediate financial concerns such as paying rent and student loans often leave you feeling like you have no extra money to set aside. However, people with modest incomes can build up savings. Achieve your goal of an emergency fund by:

  1. Starting with a Reasonable Goal – The thought of saving 6 or even 3 months of expenses seems overwhelming to a lot of people. Break this number into smaller pieces. Many people often find they can save an amount such as $25 per paycheck.
  2. Setting up a Separate Bank Account – Once you determine a small amount to set aside, start a separate account. Ask your bank about programs that allocate money from your paycheck right into your new emergency fund.
  3. Saving Your Tax Refund – Instead of splurging on a luxury item, make a point of actually saving your refund in an account designated for emergencies.
  4. Getting a Second Job / Side Business – Despite the stereotype, you probably do not have a closet full of high-end clothes, drink expensive coffee every day, and / or vacation in exotic destinations. Your problem might simply be you live in a high cost area and need to generate more income to cover expenses.

Companies like Uber and Lyft recruit drivers who need extra cash. There are other options to consider. Many states and localities reduced regulations on home-based businesses during the recession in an effort to increase employment and improve the tax base. If you are a great baker or a fantastic tutor, you have fun and earn money to cover emergencies.

  1. Sell Unnecessary Items- Companies such as eBay exist because of the cliché that one person’s trash is another person’s treasure. Consider selling off items such as old jewelry or video games for extra cash. Deposit that money in your new emergency fund.

Give Yourself Peace of Mind

Establish clear ground rules for yourself so you only tap into your fund for a true emergency such as a job loss or health crisis. If you need to draw down your emergency fund, make it a priority to build it back up once you recovered from your crisis. You never know if the next unexpected expense occurs in a few months or a few years.

The L.A. Times reported that money causes millennials a great deal of stress. When you create an emergency fund, you exert control over your finances. Savings earmarked for emergencies lowers the stress that results from unexpected surprises.

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