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DIY: How To Improve Your Personal Finances

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Even if you’re not looking for a property this exact second, you always want to be improving your position.

So, focus on the downtime to improve your finances, get your debt squared away, and put yourself in a better position when you are ready to buy!

It’s important to be sure of your financial position before you buy a property because you might find it’s harder to get that property than you would have originally thought.

Here are a few ways to quickly improve your finances to help you save more, pay down more debt, and qualify for better loans.

Pay Attention

One of the most common reasons that people struggle financially is because they simply don’t pay attention to what is going on in their own financial life. If you are not paying attention, you can’t hope to know what is going on and therefore know how to improve matters.

So, the first item on your list is to start paying attention to your finances!

When I’m working on a project, I’m laser-focused on the budget, the details, the costs, etc. But, sometimes in my personal life, I let this slide.

The reality is, when we do have a budget and focus on sticking to it, our bank account balances grow so much faster than when we aren’t using one.

I love to eat out, and my wife loves to buy small things around the house. One day, we looked back over the previous year of spending and found we each averaged over $1,000 per month on our hobbies!

By pulling back a little in each area, we were able to save over $1,000 per month but still do the things we enjoyed.

So, start by having a budget!

Even if you are financially well off and can afford most of what you want, by budgeting for the items and spreading the costs out over several months, you’ll find that you buy less, spend less, and save more.

Also, if you budget to pay down certain debts faster, you’ll see those balances dramatically drop!

So, do not overlook the importance of a family budget.

Save On Other Purchases

There might be a number of other big purchases you need to make before you get hold of your next property, and it is a good idea to make sure that you are only spending as much on those as absolutely necessary.

For any big ticket items, we actually start searching for them months or even a year in advance. For example, let’s consider kitchen appliances.

As you know, a full set of appliances can easily cost $5,000-$10,000 if you are getting high-end products. It includes a fridge, double oven, gas cooktop, microwave/fan, and dishwasher.

The first thing we did was go to the store and decide on two or three brands, styles and product lines we wanted. It’s hard to compare prices unless you are looking at similar products between stores.

Then, for months we’ll watch these items and their prices. Occasionally there will be sales and by tracking the pricing all year, we know which sales are worth getting or not. When we feel we are getting the best price, we’ll buy.

And by doing that, we can easily save $500-$1,000 or even more.

We did something similar with our TV, computer monitors, etc. Basically, anything that is currently working that we want to upgrade. Over the course of a year, we are saving thousands of dollars.

You might also use a money saving app to help.

Saving money in all these places will make an enormous difference when it comes to saving for your next down-payment

Pay Down Debt

With all the money you are saving by budgeting and by planning out major purchases, you might want to use some of it to pay down debt.

You’ll have to decide if it’s better to pay down debt or have a larger down payment because both will hold you back on your next purchase.

But, generally, paying down $1/month in debt is worth about $3/month in income. At least, as far as loans are concerned.

If you do decide to work on paying down your debt, I fully detail a unique debt pay down method to get you into your next rental property faster.

Increase Your Income

Most people just focus on debt, but the reality is you can only cut your expenses so much.

Income, on the other hand, has unlimited potential. So, why not focus on growing your income?

Increasing your monthly income can be done in a number of passive and active ways, and it is worth looking into as many of these as you can to find the right one for you. I outline a number of ways to increase your income in this article on how to earn $10,000 per month.

While earning $10,000 per month in side-income might seem a long way off, it’s important to start! Even if you can earn an extra $500 month now, and grow it slowly over time, it’s worth it!.

Don’t Focus on Just One Thing

As I mentioned already, focusing on just budgeting, or debt paydown can be detrimental to your overall financial goals. It’s important to combine a number of different things into an overall strategy, which includes budgeting, debt paydown, and increasing your income.

This article originally appeared on IdealREI. Follow them on FacebookInstagram and Twitter.

Personal Finance

Getting Plenty Of Financial Advice? 5 Money Rules You Can Ignore

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Today’s millennials aren’t big fans of debt. Unlike the baby boomers, young adults today are straddling massive financial pressure – be it heavy student loans or home prices reaching unaffordable highs. While all of this welcomes plenty of financial advice, most of them are wrong. Here are five pieces of money rules you can afford to ignore.

1. Buy A House ASAP (And Not Rent)

With home prices almost doubling and trumping inflation and pay, buying a house could lead to a nightmare if you’re taking out a mortgage before your income allows you to afford one. A better option would be to rent until you have enough funding to put down 20%, while taking care to not make payments that are more than 30% of your total income.

2. Ditch Your Credit Card

While this might be popular financial advice from the older folks, getting a credit card that comes with a low annual fee can help you immensely – if used right. What’s more, it comes packed with perks like reward points, cashback, mileage for travel, and can help you meet a large unexpected cost.

3. Pay Down Debts With The Highest Rates

It might be tempting to tackle the biggest debt of the lot and let the smaller ones slip down your priority list. The trick here is to focus instead on paying off your smallest of debts with every dollar you can afford – once it’s paid off, roll over to paying off the next one, until you’re debt-free.

4. Start Saving For Your Retirement (Right Now)

Despite the upside to saving for your retirement now, millennials might often find money too tight. For folks who are just out of university, a wiser option would be to aggressively pay off your debts instead. Although, here’s a caveat – IF your employer offers a retirement contribution match, invest just enough to get that perk (It’s free money!).

5. Buy Yourself A Car

With the shared economy on overdrive, there are plenty of options ranging from car rentals to ride-hailing services. Pumping your money into buying your car could also demand more of your savings for repairs and maintenance – funds you can use to pay off other expenses with. The opportunity cost isn’t worth it if you haven’t got enough financial cushion to meet your important expenses.

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Why You Need To Bag Muni Bonds For High-Yield Tax-Free Returns

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With many investors taking to the stock market or making do with scraping a meagre 2% yield off their 10-year Treasury bills, most miss out on including a far better option to their investment portfolio – municipal bonds. What’s exciting about this asset class? They come packed with significant tax advantages, and yield returns that are over 6% to the investor. Here’s a short, somewhat helpful video on how municipal bonds work:

Muni bonds have been the safest bet when investing in bonds – their default rates at 0.2% for years are almost miniscule when compared to the volatility that the equity market flirts with. Earlier this year, a new federal tax law enabled improved tax deductions on federal returns. This drew many to bank on municipal bonds since it fit the tax-free bill. The interest income you receive on muni bonds is not subject to federal taxes, plus it is exempt from local taxes if it was issued within your state. The cascading gains you make can be dramatic.

The best way to tap into muni bonds are through a bond fund. Within a regular bond fund, you get to pick amongst mutual funds, closed-end funds and exchange-traded funds (ETFs). Beyond these classes, you would also have to consider factors such as your investment horizon and cash flow requirements. Here’s a post that explains the calculations that go into muni bonds and other considerations to look at when making the investment. Better yet are the projections – nearly $51 billion in reinvestment demand is expected this month, which would sweeten the deal for municipal bond holders.

 

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Personal Finance

5 Tips For Financial Success To Wade Through Tough Times

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They say that if you took all of the wealth in the world and spread it evenly among all the people, within 50 years 82% of the people would be in the same economic position as they are today. This is because wealth is behavior-based and less dependent on outside factors than you may realize.

Times are tough financially for most people. That’s no news. What’s important is learning how to thrive instead of just learning to survive. Use this tough market as a wake-up call and condition yourself to take steps to adapt the behaviors necessary to truly build wealth for you and your family.

Recognize that thriving assumes surviving. Survival in these tough times is critical, but it’s not enough to just stop there. By focusing on thriving, survival is assured. You’ve got nothing to lose by living with an optimistic, great outlook. Here are a few good tips:

Invest In Yourself.

Take the time needed to acquire knowledge for your own financial success. Most people always assume that a stockbroker or investment banker knows what is right for you. This thinking is wrong. No one will ever watch your family’s money more carefully than you will.

Do your homework: it might not be what you would expect but you will be better off with the information and knowledge you gain.

Cut Back.

I know this is obvious but many people still don’t adhere to this all-important financial rule. You will never get out of trouble if you spend more than you make and refuse to do something about it. This include staying away from friends or relationships that make you spend more money!

A simple ‘No’ does not need explanation, it’s your journey and you have to live up to your own expectation.

Bring In More Bacon.

While you’re trying to be frugal, you should put more energy into having more streams of income. Look around your home, what can you turn into money? If you have a spare room, you can turn list your space on www.airbnb.com with rental fee from $20/night.

You can also turn your spare room into a weekend day care or nursery for kids. I remember when I was nursing my twins, I needed to make more money as a SAHM (stay at home mum), I opted to babysit other kids on weekends with my twins in tow. I set a flat fee of #1,500/child between the hours of 9 AM to 5 PM.

Save.

It takes 30 days to form a habit. No matter how little you might be making now, cultivate the habit of saving daily or monthly. It’s just a habit you develop and build overtime.

Start little so you don’t stall your progress, give margin for relapse but be sure to get back up. In due time it becomes a part of you. Just a few months back, I and a group of friends decided to save daily, no matter the amount.

While surfing the net, I came across www.piggybank.ng and was thrilled to find a savings platform that is really flexible. I quickly signed up, chose the monthly plan and recommended to my friends as well.

Stay Motivated.

Motivation is like bathing, you need it everyday. No matter what you do, don’t give in to fear, worry or distress. Focus on things that give you fulfillment. Develop your passion, connect with your true self and enjoy your journey. Life is too short, you’re not getting out alive, thrive and don’t just survive.

This article originally appeared on Piggybank.ng. Please follow them on Facebook , Twitter , and Instagram.

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