Finances and Buying a New Home

When you decide to buy a new home, it can be a little more complicated and complex than you imagined. Especially as a first time home buyer, you could be getting into a situation that you are unprepared for. It is imperative to do your research before starting your home search. Finding a good realtor can help you through the process.

Finding a new home is way more than just picking out a home you like. There are many financial factors that go into being able to purchase the home you desire. In order to buy a home, it is likely that you will be financing the purchase through a mortgage. In order to get a mortgage your personal finances must meet certain criteria.

Credit

One factor that goes into your mortgage is your credit score. The better your credit score, the more likely you will be approved with a mortgage. Even if other factors of your life seem to be great for your new home the mortgage company could decline your application for a mortgage because they are worried that you won’t pay it. Sometimes they may just give you a higher rate in order for you to get the mortgage. There are companies out there that have mortgage financing for bad credit. This is a reason why it is important to always be mindful of your credit score and to pay your bills.

Employment

Most mortgage companies require you to provide proof of employment. If you don’t have a job, or proof of income, they will be worried you can’t pay back your mortgage. Not only do you have to prove you have a job, you have to prove you have a steady and reliable job.  For example, you have to have been at a job for a period of time. You can’t just get a new job and apply for a mortgage. You have to be at a company and show you will not be going anywhere soon. Most mortgage company ask to speak with your employer as well to prove this.

Lending Company

There are many companies out there who provide financing for home buyers. Because of this you can shop around. You can shop around for different terms and mortgage rates. There are many types of mortgages so different companies offer different options. They also have different rates depending on your financial situation and the market.

Homeowner’s Insurance

Another item you can shop around for is Home Owners Insurance. This will be required for you to get a mortgage. As with the mortgage lender, there are many options available and many different price ranges. Be sure you understand what is included under your policy. You want to make sure you are covered in the areas you want to be covered. There are also some aspects of a home that an insurance company won’t cover (knob and tube wiring, pools, etc.) or need additional policies for so it is important to check.

All of these items discussed should be researched prior to shopping for your new home. This way you are going into it knowing what you can and can’t get.

Five Psychological Strategies to Help You Regain Control of Your Finances

Five Psychological Strategies to Help You Regain Control of Your FinancesWhile some people are lucky enough to be taught good spending habits by their parents and stick to them for life, others have a less sensible approach to their finances. Whether you tend to overspend, forget to budget for necessary expenses before treating yourself or rely on borrowing money too much, people often fall into bad financial habits. Mentally, breaking a habit can be tough, and regardless of all your good intentions, it can be easy to fall back into those oh-so-familiar patterns. But, what if you could train your brain to manage your finances better? Here are five mental hacks to help you spend less and save more.

Out of Sight, Out of Mind

If you can see your money, whether it’s in your wallet in cash or easily accessible from your mobile banking app, you’ll be more tempted to spend it. But, hiding your money away will help you to forget about it more easily. A good way to do this is to open a savings account with a bank that is different than the one you use for checking. This way, when your income is paid into your checking account, you can pay yourself first. Then, you can relax for the rest of the month, knowing that your savings have been dealt with. Don’t worry too much about the amount that you save at first – even if your budget only allows for a few dollars per month, it will add up over time.

Restrict Your Access

If you often give into the temptation to overspend your money, then you could consider restricting your access to your savings. A fixed bond account, for example, will lock your money away for a period of one year or more as you pay into it. Meaning, that once you’ve deposited or transferred it, you’ll no longer be able to withdraw your money until the designated time is up. But, being completely unable to access their cash just doesn’t work for some people. Instead, you could make this work by creating obstacles which will make it a little more difficult for you to access your savings. For example, you could invest your money in a brokerage account, which will require you to expend some effort to get access to your money.

Budget for Less

Rather than working out your budget using the whole amount that you get paid each month, take as much as you can afford from it to dedicate to your savings account. Then using the amount that you are left with, work out your budget for the month ahead. This will make it easier to avoid overspending, and will motivate you to find ways to save money on your monthly expenses, for example cheaper insurance policies, or a lower rate for your utilities. After a few months of doing this, you’ll adapt to living on a lower amount whilst your savings grow.

Be Mindful

Compulsive overspending can be a symptom of stress, anxiety, depression, and some personality disorders. If you believe that you are overspending due to mental illness, it’s important to seek help from your doctor as soon as possible to treat the underlying issues. If you spend when you feel stressed, mindfulness meditation may be able to help. This ancient Buddhist technique has recently taken the world by storm, and involves relaxing the body and soul through deep, yogic breathing and inward focusing. Next time you feel the urge to spend, try this: Sit, cross-legged on the floor with your eyes closed. Slowly inhale through your nose deeply, then back out again, focusing on your breathing and the movement of your abdomen. As you continue to do this, you will begin to relax and gain control.

Reward Yourself

Continuously setting small savings goals and meeting them, then rewarding yourself for doing so is much more enjoyable than simply saving and saving all the time. If something makes us happy, then we’re more likely to go back and do it again…and again. So, turn your money saving strategy into something enjoyable for yourself, by dedicating a percentage of the money that you save to something specific to look forward to like a new car or a vacation.

Have you managed to trick yourself into saving more money? We’d love to hear all about it in the comments!

Financially Preparing for Maternity Leave

Financially Preparing for Maternity LeaveHaving a baby is a very exciting time! But it also comes with a lot of new considerations. Life will be different, whether you expect it or not. For example, babies are expensive! But unlike some of the less predictable aspects of bringing a new human into the world, there are some straightforward money concepts to follow. Here are some tips for financially preparing for maternity leave.

Find Out What Policies Your Job Has

The U.S. does not mandate paid leave so the options will vary dramatically between different places of work. It’s important to find out the policies that are in place and what you’re entitled to. In some cases, it’s possible to apply for short-term disability coverage if your job does not have paid maternity leave. You might have to be at a job for a certain amount of time before that option kicks in. So find out if and when you’re eligible, as well as how much the payout will be.

Prepare for the Unexpected

Many women plan on working up until right before the baby comes, and in some cases, this works great. But pregnancy and childbirth can be very unpredictable and sometimes it’s necessary to start maternity leave earlier than planned. Don’t assume that you’ll be making your full salary throughout the entire pregnancy. Instead, start to budget and save money as soon as possible to cover your bases in case something changes.

Check Your Maternity Coverage with Your Health Care Provider

Some health insurance providers offer different coverage than others. Check to see what yours offers and take advantage of any maternity programs that they might have. Throughout the pregnancy and birth you might see a variety of different doctors. Always make sure that they’re in network and covered by your insurance so you don’t end up with any surprising hospital bills. If your current insurance doesn’t cover a lot of maternity options, try upgrading to a plan that does. And if you see something fishy on one of your bills, call your insurance company! We saved several hundred dollars by questioning a bill we got for a regular pre-natal checkup, which should have been covered in full. They investigated and set our balance back to $0!

Save Your Vacation Days

If your job doesn’t offer paid maternity leave, you might want to use some of your paid vacation time instead. It won’t necessarily feel fair, but it can be the difference between having an income during those first few weeks at home and feeling the need to go back to work earlier than you’d like. You can also attempt to negotiate for some paid maternity time whether or not your employer actually offers it. You might not get it, but you might, especially if you’re a valued employee. You can also offer alternative options like starting back up with part time work from home as soon as you feel ready. This could also help ease your transition back into full-time when that time comes.

Set a Budget

Having a child costs money all around, from the gestation process to sending that kid to college. Your financial outlook might change significantly when a child comes into the picture. Set a budget before you go on maternity leave to get into the habit of saving. This will also help build a savings that you can rely on in an emergency while you’re on maternity leave.

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