Category: Money & Personal Finance

Make money, Earn money, Save money, Money

Buying A Home Post-COVID? Here’s What You Should Know
A Changing World

Let’s rewind the clock a bit.

It’s December 31st, 2019, and New Year’s Eve is in full swing.

The fireworks are blasting off, the champagne is popping, and people are happy. If you had listened in on others’ conversations, you would hear a general air of hopefulness. Everybody had high expectations for 2020, and they weren’t afraid to let the world know.

If you were anything like most people, then you probably had the same level of optimism.

Instead, the universe decided to prove us all wrong. January got off to a rocky start, February was okay, and by early-March, everybody had heard about COVID-19.

At first, nobody expected this virus to have the effect that it did. But after another 30 days passed and the entire world was still on lockdown, all of the optimistic people realized what was happening.

No matter what you do, the virus has likely impacted you and your family in at least some small way. Despite all of the unexpected ups and downs that 2020 threw out, though, families are still searching for buying a home.

Owning A Home Is Smart

When apartments started evicting people who couldn’t pay their rent, owning a home suddenly seemed a lot more secure. After all, mortgage payments are usually cheaper than apartment renting (for a similar-sized space), and apartments are ridiculously overpriced. All of this goes to say that even though the world is still amid a pandemic, homeownership is steady.

In today’s article, we’re going to be looking at everything you should know about the changing real estate market, how you can prepare, and how to ensure that you get a good deal. We’ll also be talking about the holy grail of home loans (at least as far as banks are concerned)- your debt-to-income ratio (or DTI, for short).

Let’s dive in!

Understanding Debt-To-Income Ratio (DTI)

Before you start shopping for a house, the most important thing to know about is your debt-to-income ratio. Every bank you go to, every lender you speak to, and even some real estate agencies will want to know this number.

Most of these organizations will do the math on your DTI for you, but it’s a good idea to know before you get turned down for the loan required to purchase your dream home. It will also save you time spent at the bank going through all of your expenses line by line.

Save Your Credit Score!

Another great reason to have your DTI calculated before you start applying for loans is that it will save you from unnecessary “hard checks” on your credit.

When a major lender has to run a credit check, this counts as a hard check and can reduce your overall credit score by a couple of points. These negative marks stay on your credit score for two years, and there’s no way to get them removed sooner.

Obviously, if you want a home loan, you’ll have to consent to at least one credit check. But it’s a lot better than getting denied for multiple credit checks because you were applying for a larger loan than you could get approved for.

How To Calculate Your DTI For Home Loans

Your debt-to-income ratio is a number that compares your monthly debt (bills, loans, expenses, rent) to your income. If you’re single, only your income matters. If you’re married, they’ll also count your spouse’s after-tax income towards your income, which can significantly boost your DTI.

Calculating your DTI ratio is simple- divide your monthly income by your monthly debt and expenses.

This is where you’ll have to do a bit of inventory. You must itemize all of your debts and expenses, not just the big payments.

Include how much you spend on groceries, entertainment, gym memberships, subscriptions, phone bill, internet, and even your pets. The bank will go through your bank statements anyway, so you’re not going to be able to hide anything.

So, let’s say that your total monthly expenditure is $3,000, and your monthly salary (or business income) is $10,000. Divide your income by your debt, and you’ll get a DTI ratio of 33%.

A 33% DTI is excellent, but most Americans have a higher DTI- especially after COVID. The higher your DTI ratio is, the worse it is. In general, banks and lenders like to see a 43% DTI ratio or lower.

You might be able to get a loan with a higher number, but you’ll likely have to make a higher down payment or be required to pay a higher interest rate.

Looking For An Easier Way?

One of the easiest ways to calculate your debt-to-income ratio is to head over to MortgageCalculators.info. The site is 100% free to use, and their DTI calculator is second to none!

All you need to do is enter your pre-tax income, your spouse’s post-tax income (if applicable), expenses, and mortgage details (if you know them). Once you’re finished, press ‘Calculate,’ and you’ll have all of your numbers. You can then screenshot or save all of the information.

If you’re looking for other essential real estate calculators, the site developers have created an excellent line-up of tools, including:
- Monthly payment calculator
- Minimum income requirement calculator
- Home loan limit calculator
- Repayment charts
- Closing cost calculator
- Reverse mortgage calculators
- …and a lot more!
Overall, MortgageCalculators is an excellent resource for anybody who wants a simple way of calculating all of their numbers. The writers have also included in-depth guides on how to apply to federal FHA loans, how to refinance your home, and more.

The best part of it all- it’s 100% free!

Don’t Stretch Yourself Too Thin

One thing that COVID taught almost everybody in America is that you should never stretch your resources too thin. Before this happened, there were a lot of people who had high DTI ratios, and as soon as they lost their job, they lost everything.

If you’re shopping for a home or trying to get a home loan, then the best thing you can do is reduce your monthly expenses as much as possible.

Real Estate Changes After COVID-19

Pretty much everybody can agree that things aren’t the same as they used to be; this also applies to the real estate market. Possibly one of the biggest changes we’ve seen is one of the most iconic- no more “Open House” signs.

In the past, this was one of the easiest ways to go house shopping. You could hit up all of your favorite neighborhoods and just drive around until you saw an “Open House” sign, walk in, drink a soda, eat one of those grocery store cookies that the real estate agent puts out, and see if you liked the place or not.

Today, though, things are a bit more impersonal. In some states, where the virus isn’t as bad, you may be able to schedule an in-person visit with an agent. However, more agencies are switching to virtual tours, at least for first-time showings.

These usually involve a video or Facetime call where the agent walks around the house and shows you all of the important interior and exterior features.

Although they’re not quite as inclusive, these virtual tours are a great way to do a preliminary examination of a house. If you indicate that you like the house, then the agent will typically be able to schedule a short personal visit. The virtual tours are a good way to get a feel for the house, but ultimately, you really won’t know whether you want to buy it or not until you see it in-person.

Sales Are Down

The biggest change to the real estate market is that sales are down, meaning that it’s not the best time to be an agent. Since money is tight, many people who planned on buying a home this past year decided to wait a bit longer.

… But You Might Get A Deal

The flipside of that is that you could stand to get a better deal on your home. There are still a number of people who are desperately trying to sell their home. With sales down, many sellers may be willing to reduce their home price to sell it faster.

Final Tips For Buying A Home

There’s no need to cancel your plans to purchase a house in 2021, even with a pandemic going on. Although the real estate market is undoubtedly going through some changes, home prices and loan rates have stayed steady throughout most of 2020. If anything, you may stand to get an even better deal since fewer people are shopping.

Ultimately, owning a home is the ultimate security. You’ll be able to reduce your monthly living expenses, and you’ll actually get to own the house. In the future, you can use the house to help you get business loans, and owning a home looks great on your credit!

Remember, though, before you start shopping, check out MortgageCalculators.info to calculate your DTI ratio (and anything else you might need). As long as you know your numbers, you’ll know exactly how much home you can afford, and finding a lender will be much easier.
February 15, 2021
Is Investing In Property A Good Idea?

Investing is one of the biggest ways people prepare for retirement; be it in the stock market, 401(k) plans, precious metals, business opportunities, you name it. However, one particular category of investments that has been gaining traction lately is real estate property investing. It has become so popular because it typically enables your current funds to follow the rate of inflation and even appreciate beyond inflation in some cases. Everyone can agree that some forms of investment are better than others — except that perception depends on your interpretation of the term “better.” To some, “better” is relative to the chance of a greater return, but to others, it is simply dependent on the stability of the investment for its duration. Let’s look at how these definitions compare to determine whether an investment in real estate is the right choice for you.

“Saving vs Investing” by ota_photos

Getting Started

In order to dive into how investments in real estate stack up in comparison to other areas of investment, we need to start from the beginning and evaluate the process.

Many misinterpret real estate investment to mean you will be buying multiple houses or properties and flipping them or renting them out. While that can be your plan of action in investing, that’s not the only way to do so.

Also, prospective investors commonly assume that in order to invest in real estate, you need to have immediate access to the funds to afford multiple properties. However, you can actually take advantage of your lending options as well. There are a variety of loans that allow investing or renting with a low-rate down payment. In fact, the idea of a standard 20% down payment for a loan is woefully outdated and the average percentage has been trending downward. In recent years it has dropped below 10%, meaning that homeownership has started to become more accessible.

While you may still require a chunk of change to make the down payment on a home, different loan options require varying down payments and credit scores. For example, loans from the Federal Housing Administration require down payments as low as 3.5% with a credit score of at least 580. These loans are ideal for people purchasing their first home, which can still be an investment since real estate values appreciate in tandem with inflation. Meaning your invested money will retain its purchasing power whenever the home is sold.

What if you don’t qualify for an FHA loan, but would like to invest in property despite still not having a large mass of funds? There are options for the property title that may be useful to you, such as joint tenancy or tenancy in common. Although it’s commonly discussed in relation to renting, tenancy in property investment allows for multiple individuals to share the ownership and financial burden of a property. Using the joint tenancy and tenancy in common title options, you and others that you trust can all chip in to purchase a property. This approach can make homeownership that much more accessible and can also be handy for those just starting out in property investing without significant capital.

Lastly, there is the standard means of investing in real estate — buying a home. As you may guess, this is done by simply taking out a mortgage with upfront closing costs and a higher down payment. Some people can even afford to buy a property outright without the assistance of a lending institution. Regardless of which entrance to real estate investing best fits your situation, it’s time to consider whether or not investing in property is actually right for you.

Who Should Invest

Whether or not it’s a good idea to invest in property depends on what you are looking for in an investment and how you intend to invest. To cut to the chase, if you are looking for a quick, high return investment, then real estate probably isn’t the best place to start unless you are looking to fix and flip houses. Real estate properties see their best returns and greatest effects in long-term conditions for a few different reasons. One reason is simply the appreciation of property which, as mentioned earlier, usually follows the rate of inflation. Looking at real estate strictly in terms of appreciation, it’s not a great investment, but rather more of an asset — something to be leveraged when money is needed. Property rarely becomes an investment on its own due to upkeep costs and the rate of inflation of a little over 2% a year for the past 25 years. Since it requires more attention, property investment is not as turnkey as other forms of investment, such as stocks. However, real estate is a much more secure investment as it has a significantly lower chance of depreciation. Real estate investing is therefore most effective in two focuses: renting as a landlord and fixing and flipping.

Landlords

Being a landlord is a relatively straightforward way to secure a passive income. With current rent prices being so high, it’s easy to profit off of rent even after accounting for the expenses of the building itself. While this alone may sound simple, as a landlord you still have to be accessible at all times in case of an emergency and coordinate schedules for routine maintenance of the property. Becoming a landlord is still possible even for individuals in a hindered financial situation because some loan options will allow the purchase of multiunit properties, with FHA loans being an example of this too. The only stipulation is that the borrower must reside in one of the property’s units, and there can’t be more than four units in the property. All that considered, you are still presented with a great opportunity to have your taxes, mortgage, utilities, and general maintenance paid for you, or to even just lower your out-of-pocket costs while earning experience as a landlord.

As your experience with being a landlord increases, you can hopefully start to own more properties, eventually surpassing the need for a typical job. Since most of the maintenance can be performed by hired hands, it’s possible to retire at an early age as a landlord and even continue being a landlord past retirement. Finally, if you ever decide that you are done being a landlord, you can sell the properties and essentially get a full, inflation-adjusted return on your investment.

Fix And Flip

Fixing and flipping houses is a much less stable investment in property, but it also presents the opportunity to receive much greater returns on your initial investment. The returns also have a much shorter turnaround time than renting or simply holding on to a property and selling it off later in life. This style of investing has, arguably, been popularized by a multitude of television shows, starting with the first most successful show, “Flip This House” in 2005 on HGTV.

Much like what is depicted in any of the television shows, house flipping requires a lot of knowledge in different trades and an understanding of interior design. If the flipper doesn’t have these skills, it’s possible to hire helping hands to perform these jobs. However, that will diminish the amount of the return and will also require immediate access to funds to pay for the help. So to avoid this, most people tend to do the work themselves or with business partners. The bottom line is that this form of investing is significantly more hands-on and therefore is close to outright being a full-time job rather than a passive investment. Many people working with the fix and flip style of investing have likely spent a great deal of time working in a profession that already required those same skills.

Conclusion

Investing in property is a good idea for individuals who are looking for stability, passive income, or assets to add to their financial portfolio. If you are looking for a significant, short-term payoff, but are not skilled in the trades and are not looking to become well-versed in them, then investing in property may not be the most feasible investment type for you. Due to the nature of property being a physical asset that is exposed to the elements and subject to age, it’s not much of a possibility to have a hands-off approach like you can with the stock market.

November 28, 2020
How Much Rent Can I Afford?
Renting a Place

Getting a space of your own is deeply ingrained in the psyche of a human. The leverage of being able to decorate your home as you like is very intriguing but as thrilling as it may sound, it is very expensive and might exceed your budget. For this reason, people often prefer renting a place instead.

Benefits of Rent Calculator

A rent calculator comes in handy when figuring out the amount of rent that you can afford. One must take advantage of this application to proceed further. Rent calculator websites like Zumper see how much you can afford to spend on renting a house for yourself or your family. It is based on several things, all you need to do is provide all relevant information and the calculator is going to do the rest of the work for you.

Using a rent calculator, you need to put in a few requirements i.e. location you want to live in, neighborhood, household income, monthly expenses, number of bedrooms, monthly savings, number of bedrooms required, monthly debts, etc. All of the information is used to calculate the housing benefits and the amount you can afford to pay the rent for the property you are renting from a private landlord. Zumper is going to help you do it all in a snap, moreover, it will also help you find the apartments to rent and reserve them online.

How does the Rent Calculator Work

To calculate how much rent you can afford, the calculator multiplies the gross income by how much you are willing to spend on rent. Further, the rent amount is deducted from the monthly income, and the expenses, savings, and debts are subtracted from it. The final number is what you have left to spend.

Things to Consider before Renting a Place

First of all, you need to add up all of your other expenses to see how much rent you can afford to pay. All the straight and ongoing costs must be considered before deciding how much rent you can afford or whether you can afford the rent or not.

Budgeting

A household rent is most probably going to be your largest outgoing funds, so for your peace of mind, it is important to know how much you can afford. It will additionally give an accurate idea of what you are looking for and you will have better control over the expenses. Budgeting helps you in accomplishing your long term financial goals. You need to draw a proper budget for all your costs, make an estimate of what you will spend on each month. Your monthly or day to day expenses include; cell phone, clothes, food, car insurance, gym, traveling, hobbies, loans, credit card payments, children, health care, etc.

If you are in doubt, it is better to overestimate than to underestimate. Keep in mind that your expenses also include the summer holidays and Christmas time. You do not want to go into debt after just a few months of renting just because you failed at drawing a budget. Now, once you have a list of all the expenses and the costs you can easily calculate how much rent you can afford.

Other Rental Costs

You need to keep in mind that renting a house involves more bills than just paying your rent, it is not just paying your rent all in all. You have to pay the service charges, utility bills, insurance; some of the most expected monthly bills are the following:
- Water Bills
- Gas and Electricity bills.
- Service charges.
- Digital TV subscription and Broadband bill.
- Landline bill.
- Insurance
Different types of bills are calculated in different ways, so you must find out from the property owner how they are paid i.e. weekly, monthly, or yearly.

Moving Cost

You do not have a proper sense of how much of the stuff you have until you have to move it. Here, you will need a moving service to move your possessions into your new home, and that my friend costs money. From a cab to a truck you will be needing money to pay to the service company to move your stuff, the more the possessions double the cost. So, planning everything ahead of time will save you a lot of time and headache.

Estate Agent Fees

The estate agent does not work for free either; you got to pay him the money to find you the desirable place. The estate company is going to do all the leg work for you, so it is better to keep some cash aside for them while looking to rent a place. The estate agent’s fee varies, so you better be mindful of the structure to make a smart deal.

Furnishing

If you are moving to a furnished place then well and good but if you are moving to a place that is yet to be furnished then you will need to keep extra cash on the side for the furniture and soft goods. You will need cash to buy the hardwood furniture, curtains, decorative items, etc. to make the place look and feel homelike.

How Much Rent Can I Afford

Houses for rent sites like Zumper helps you in calculating your expenses so that you can easily figure out how much rent you can afford or whether you can afford it or not. Apart from that Zumper also allows you to reserve apartments to rent online, you can find verified properties and places on Zumper that you can reserve for yourself on the spot and lease. On Zumper everything is very efficient and convenient, you can lease online without any worry or competition. It further informs you within 24 hours whether your application is approved or not. So, what are you waiting for? Find your dream place now.

Renting a place is far more time saving than owning a house; it provides you with the freedom and at the same time a feeling of having a home. However, you need to calculate your expenses to see how much rent you can afford so that you rent a place accordingly. Zumper comes extremely handy here since it has got you covered in calculating everything regarding renting a place. Certain things need to be considered before renting a place so one must pay heed to them to be on the safe side.
November 23, 2020
10 Ways To Make Extra Cash For The Holiday Season

The holiday season is approaching, which means it may be time to start thinking about your financial game plan heading into holidays like Christmas and Hanukah. It’s no secret that this time of the year can be financially difficult for many people, with things like gift-giving and party planning being on the top of everyone’s mind, so it’s important to start thinking about this ahead of time.

Luckily, even during a worldwide pandemic, there are tons of ways to make some extra money on the side to push you over the line for the end of 2020. From more traditional methods to even some outside of the box ideas, here is the list of our favorite ways to make a little extra this holiday season.

Ten ways to make extra cash

Working retail

Unsurprisingly, a great first place to start looking is around your local retailers and local businesses to see if they’re seeking any kind of seasonal employees. Especially with Black Friday approaching in the coming weeks, any major store or shopping mall will surely be looking for extra help to keep their stores running properly.

If traditional retail, grocery, or even restaurants isn’t your cup of tea, there are tons of “fun” seasonal gigs you can search for around you. For example, working at a Christmas tree lot/farm can help you get into the spirit while making money. Even becoming a Santa Claus or elf actor at a local attraction can help you bring joy to children while also making some good money. Research into how your town or city celebrates the holidays and look for a fun way to get involved!

Side hustle delivery gig

Using your car for side hustles has become extremely popular over the past few years, and especially during the holidays, it can be a great way to make some money. Many delivery services and ridesharing sharing services have increased in popularity, and with the increase in use, comes the demand for drivers.

For example, goPuff, one food and household essentials delivery service has seen a massive increase in interest over the past year due to its flexibility during the holidays.

“Side hustles are a great way to earn some extra spending money,” says Elizabeth Romaine, goPuff’s Director of Communications. “Becoming a goPuff driver-partner not only allows you to earn extra money utilizing your car, but you can also choose the hours that work best for you—so flexible!”

The same trend is occurring with travel apps like Uber and Lyft. Due to “peak pay” hours at different times throughout the week (and more prevalent during the winter), it can serve as an extra incentive to get off the couch and help some travelers in need.

Blogging

Believe it or not, but starting and maintaining a blog can be an easy and creative way to make money. Monetizing a blog is becoming more and more commonplace as the power of SEO is becoming increasingly popular among brands and writers.

If you run your own brand or business, beefing up your following through your blog is a great way to gain traffic to your site and potential conversions. Start planning out your content calendar now so that your content is getting in front of your readers that can lead to purchases on your site.

On the other hand, if you don’t offer products, start monetizing the way you view sponsored posts. With influencer marketing and branded partnerships at an all-time high, creating a media kit and sponsored post rate can be a great way to connect with brands online and make decent money.

Selling things around the house

One man’s trash is another man’s treasure is how the saying goes, and especially during the holiday season, there will certainly be people looking for presents! This is the perfect time to offload some things around your house that you either don’t want anymore or you don’t use.

Sure, garage and yard sales are something that instantly comes to mind, but in the middle of a pandemic, it’s increasingly easier to make your sales online. Some of our favorite apps and hotbeds for online sales include Facebook Marketplace (especially if you are selling locally) and Mercari (for longer distanced transactions).

The beauty of these platforms is that you can offload just about anything. From furniture to electronics, these places are great to show off anything you’re looking to cash in on. To get started, lean on tools, tips and timeless online selling advice to help get your items out of the house and money in your pocket.

Start a business

Do you have a hobby or talent you’ve been looking to monetize? Starting a business, and particularly an online one has never had a better time to start than right now. What many don’t realize is quite how vast the internet is and how many people can potentially be interested in buying your products.

Websites like Etsy and Bigcommerce have made many hobbies like arts and crafts or sports card training turn from a fun hobby into a lucrative business. The beautiful part of setting up a shop online is how easy it really is. Platforms like the ones mentioned above are as simple as a few clicks of buttons to get started. With not only design options to customize to your liking, but it also gives you all kinds of ways to customize prices, imagery, shipping options, and much more.

Take this holiday season to think about your hobbies and if you have the opportunity to capitalize while you can.

Pet sit or babysit

The holiday season is busy for everyone, especially for those that need to travel to visit their families or catch up on their last-minute shopping. This is a perfect time to ask around and see if anyone you know needs a babysitter or pet sitter. As easy as dedicating a few hours some nights or simply checking up periodically on a pet, this is a great low-effort, high reward way to make a little side money.

The key to this option is making yourself available and also well-known. If you decide to go this route, be sure to be flexible and also outgoing so you can actually get some action. Ask friends and family, coworkers, or even neighbors if they need any help. We know everyone’s holidays are busy, so if you’re able to help them out, they’ll definitely be appreciative.

Start cleaning or shoveling snow

Depending on where you live or what season you’re in, you might have some options to get gritty with a side hustle. With a pandemic front and center of our lives, more people are worried about cleanliness than ever before.

There are a number of reasons or situations where people might need someone to come in and clean for them. Put yourself out there as an option for hire! Whether you’re hired to keep things clean at a small wedding ceremony or outdoor reception, or someone wants to help their older loved ones maintain a clean home during this time, you could be making the most out of the opportunities to keep people safe and healthy.

Before jumping into a cleaning business with a sponge and a bottle of glass cleaner, you may want to familiarize yourself with the current CDC cleaning and disinfecting guidelines. This way you can be certain the products you are using are satisfactory and you have a greater understanding of the cleanliness expectations people might have right now.

If cleaning others’ homes seems risky and not a viable option for you, consider other tasks you could do for money. In the fall you could offer to rake and bag up the leaves that fall onto peoples’ lawns. Come time for the snow to fall you could make use of your snowplow or snow blower, and offer your plowing services to those nearby who might be in need. Maybe you don’t have any machinery, but you have a shovel. People often have stairs, decks, patios and even their roofs that could use a shovel.

Try out survey websites

You might have heard about people getting paid to take surveys or fill out forms to make a quick buck. Maybe you never gave it a try yourself because you weren’t sure where to start or what sites were legitimate. When you’re looking to add to your income the last thing you need is to end up scammed.

The best way to take advantage of these opportunities is to check out sites that have already been reviewed and tested by someone else. Peruse through the lists to find the best sites to make money on and avoid the hassle of your own trial and error to find which actually works. Here are instructions for Dollar General Survey which is a quick way to get a gift card.

It’s important to pay attention to the nature of the survey, however, as some have certain requirements of the person taking them. Be sure that your demographics, habits or whatever determining characteristics are listed apply to you so that you’re eligible to take the surveys and you aren’t wasting your time.

Add Money-back extensions

This year more than ever, consumers are likely to take to the internet to do their shopping. Whether you have the time or energy to browse around looking for the best deals, there is another option to make the most out of your online shopping. Cashback extensions allow you to earn money while you’re doing your shopping. This is an ideal way to add up your pennies because it is something you can do that takes up little to no extra time from your day.

By downloading a cashback browser extension you can shop anywhere on the internet and if the store is affiliated with Rakuten, it will not only check for coupons, best prices, but it will also earn you cash back for your eligible purchases. Using this tool is a no-brainer because you can save on items you already planned on buying and the money-back adds up!

The way the cashback works is as you shop you’ll see the Rakuten button pop up asking to scan for offers. Once you click it, the extension runs through its process, checks for pricing, sales, coupon codes and logs your purchase total. Your cash-back saves up during these windows of time, about a few months, and at the end of that time period they will mail you your “big fat check.”

Besides the extension, you can always begin your shopping right on Rakuten where you can look through the big sales and deals they’re highlighting. This can be a good way to get gift ideas for your loved ones, while also saving some cash.

Become a Flipper

When you hear the word flipper, you might think you don’t have the skill set it requires to buy a house, fix it up and resell it for more money. However, flipping is something that is catching on well outside the realm of real estate.

Crafty people are hitting up yard sale after yard sale, or keeping an eye on digital marketplaces for cheap items like an old piece of furniture. If you’re looking to drastically increase the value of the item you’ll need to put a little work into it. With the example of furniture, say a stool, you might consider at least sanding it down and refinishing its stain or giving it a nice pop of color by painting it.

Another way people are flipping items is by keeping a close eye on sales. When they find a product on sale for a much lower price they buy it, or maybe a few of them, and list them online to sell. You can decide if you want to list it higher than its normal price or not, so your profit margin may depend on the item’s demand.

No matter your personal skill set, how much time you have available, or how much energy you have to expend on making some extra cash this holiday season, there is something out there for you. If you haven’t found something from this list, fingers crossed it made you think of a solution that best fits your life. Hopefully, with a little extra cash this holiday season, it’ll be the best one yet!

November 10, 2020
5 Unexpected Expenses And 5 Ways to Pay Them

Paying for any expense is never a fun time. But unexpected expenses are especially the worst. They often destroy the most potent of financial plans and leave absolute destruction in their wake.

Sometimes it’s a medical emergency that is worth six months of your salary. Another time, you have to attend a wedding —somewhere in Europe.

According to Bankrate’s Financial Security Index, three in ten Americans have no emergency savings at all. So what should they do if faced with expenses they’re not expecting?

There are several ways to tread waters in such a scenario. But before going into them, let’s take a look at some of the most common ways unexpected expenses emerge.

Common Types of Unexpected Expenses

Even if you map out a perfect budget that covers everything from rent to grocery, your financial stability is vulnerable to some of these unpredictable expenses.

1.    Medical Expenses

Anyone not covered under a good insurance plan can be devastated by medical expenses. According to the New York Times, the majority of American families are a single medical emergency away from complete financial ruin.

Unfortunately, a $1000 medical bill is enough to put most households under. And let’s not ignore the mental toll health-related matters takes on an individual. Money should be the last thing on a person’s mind while they’re dealing with health issues.

Ideally, it should never come down to health against money but unexpected medical conditions often create this bleak situation for people who don’t have any savings set aside or are uninsured.

2.    Home Maintenance

You never know when something will go wrong in the house. Be it termites, plumbing issues or the refrigerator breaking down — house expenses come out of the blue.

It’s hard to plan for them but one can minimize the risk to an extent. While you can not predict a colony of insects finding refuge in your attic, you can get someone to look at the wiring and plumbing system to see if any issues can occur in the immediate future.

Even then, these types of expenses are inevitable. And without any savings in the bank, they can be especially worrisome.

3.    Buying Gifts or Taking a Trip

You would be surprised to know just how many people go into debt in the holiday season. People who haven’t saved throughout the year often seek out loans for buying Christmas gifts.

But this can be avoided with an appropriate saving plan. Meanwhile, there is no way to plan for your friend announcing her pregnancy and buying something cheap for her baby shower is not an option either.

Similarly, unplanned trips can throw one’s financial plans out the window. Whether you’re flying out to attend a friend’s wedding or to see an uncle who’s going into surgery —these trips can often be quite costly.

4.    Car Issues

Having your own set of wheels is always a good thing. However, with your car comes expenses like property tax, inspections and maintenance.

Sometimes a ride can give you other troubles as well, which is why anyone that owns a vehicle should have a car savings account. You never know when the engine will break down or any other repair will be needed.

When that happens, you need to have a plan or you’d be left with a broken down car and a massive bill from the mechanic.

5.    Stolen Items and Mugging

No one wants to be at the receiving end of theft or mugging. However, life is unpredictable. Losing something valuable can be both personally and financially damaging.

Replacing items is a tedious process especially when you’ve been a victim to a crime. Insurance and savings can come to your rescue in such situations.

Still, it’s better to stay safe, take inventory of expensive items, save their pictures in a secured location and write down their values. In case they are ever stolen, you should take all the necessary preparations.

How to Pay for Unplanned Expenses

Life is uncertain and things often don’t go as planned. Paying off unforeseen expenses might seem like a mountain to climb. Fortunately, a few tricks can make this summit a whole lot easier.

1.    Reduce Your Variable Expenses

It’s hard to completely overhaul your expenses on short notice. Although the process can be overwhelming, you would need to go through your statements, utility, credit card, receipts, loan payments and other spendings.

Knowing where the money is going will put things into perspective. It will also help you reduce variable expenses such as electricity bill, car maintenance and grocery among others.

Reducing these expenses will not be easy. It will require lifestyle adjustments such as avoiding transportation costs by carpooling, cooking at home instead of eating out and skipping the manicures for a while.

When it comes to shopping for groceries, there’s always the option of seeking discounts. This will be easier online than in brick-and-mortar stores. Digital coupons can help you save on regular household expenses and bring down your variable expenses considerably.

2.    Seek a Personal Loan From a Credit Union

Credit unions are often the better alternative to commercial banks as the latter tend to have higher interest rates. The only catch is that membership is required in credit unions before one can apply for a loan.

This requirement can be fulfilled by opening a savings or checking account with the credit union. What you have to examine is whether savings in interest is greater than added requirements.

For anyone that’s already a member of a credit union, securing a personal loan with relatively lower interest rate shouldn’t be that much difficult.

3.    Reach Out to Family

Borrowing from family might be one of your better options. It’s extremely rare for a relative to charge interest on a loan. Also, it’s less likely for this loan to have a predetermined repayment model where you’d be repaying a fixed amount each month.

But there is a downside to such a loan. Involving money in relationships can end up having some negative consequences. Research suggests that almost 45% of such transactions end up badly.

One way to avoid such an ordeal is by making the loan somewhat official. Putting the loan in writing and setting some loose terms might eliminate the possibility that you will take things lightly. After all, whether you borrow from a cousin or a bank, a loan is meant to be repaid.

4.    Utilize Your Savings

While borrowing money to pay for an unexpected expense might buy you some time —dipping into your savings is a much more permanent solution. But for this, you need a cash savings account that can be accessed without any penalties.

Beyond this, you need to ensure the money is not earmarked for some other purpose and whether or not you would be penalised for withdrawing it. An early withdrawal penalty is the last thing you need on top of a surprise expense.

Keep in mind that withdrawing cash savings is preferable to investments. Generally, the investments are meant for savings that have medium-to-long term.

5.    Sell Personal Items

Quickest way to make some easy cash is by going through your personal belongings and selling items that are no longer needed.

Look for clothes that no longer fit and sell them to local consignment shops. Organize a garage sale. Find collectibles like records, DVDs and action figures and put them up on websites like eBay. You can even advertise these on relevant Facebook groups to get better prices.

Not only would you make some easy bucks doing this but also free your home from unnecessary clutter.

Conclusion

Among the things that are certain in life, unplanned expenses are right up there with death and taxes. There are infinite ways in which you can be faced with a money situation you were least expecting.

A car accident can have you not only paying for fixing the vehicle but also treating any injuries you might’ve sustained. Similarly, a death in the family incurs ridiculously expensive funeral costs.

Thankfully, these risks can be somewhat mitigated through a good insurance plan and by setting aside some savings. There are other ways to go about this as well. One can reduce their expenses, seek out loans and sell some unnecessary items to ease some of the burdens.

The only option that’s not on the table is giving up and letting these expenses overwhelm you.

October 29, 2020