Your home might be your castle, but it can cost a king’s ransom to take care of it and live within it. While being careful with your money, there are some simple tips which can make it easier to live within your means. How can you tackle your mortgage and yet live comfortably?
Refinance Your Mortgage
If it’s been several years since you’ve bought your home, it’s time to consider refinancing. Rates are historically low and can save you a lot of money. Refinancing can also help you consolidate debt, or can lower your overall mortgage monthly cost. If you have an adjustable-rate mortgage, you might be able to switch to a fixed-rate mortgage, which will give you better financial security.
Rent Out Unused Space
If you have unused space in your home, you could rent it out! Renting out an unused room or basement apartment is a common way to create extra income. Sometimes this is called “house hacking.” If you choose this route, you can choose to have roommates or be a landlord to an apartment space. You can even use any of the rental apps which provide hotel service for guests. You can earn hundreds of dollars a month by house hacking.
If you’ve found you have more space than you can upkeep, a great option is to move to a smaller, more efficient home! Homes with vast rooms of unused and inefficient space might not attract you anymore. Downsizing to a space that suits your individualized needs, while having areas for each thing your family requires, can be an excellent way to save money. Your needs change, and you might have entered a time in which you need less general space, but more space specifically yours, such as an office or extra bedroom. Coupled with low mortgage rates, this could be a good option for your family’s needs.
Regardless of how you choose to do it, saving money by making your house work for you is a great chance to be resilient. When you focus upon things like house hacking and refinancing, you can help your home continue to be where you need to be, regardless of space. If you’d rather right-size and find something which fits your changing needs, that option can serve your family as well. Whatever way you choose, your home can help you save, and even earn, money!
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Being frugal and being cheap are often associated with each other, but it’s important to know the difference. Being frugal is when you make conscious decisions about spending less and being cheap is going out of your way to saving a little money. While they still might be similar, there are ways to be frugal without being cheap.
Understand the Purpose
If you want to begin spending less money without looking cheap, you first need to understand why you want to spend less. Are you saving up for something? Are you trying to avoid bad spending habits? Are you avoiding debt? Get to the heart of why you want to be more frugal. Understanding this will drive your actions as you spend money and it can help you be more aware of how your spending choices align with your goal. It can also help you avoid behavior that makes you look cheap because you aren’t just doing things to save a couple of bucks. You’re trying to be frugal for a larger purpose.
Think Long Term
When you’re frugal, it doesn’t mean you never spend large amounts of money. It means you weigh out the worth of financial decisions. Sometimes, it’s better to spend more money now to reap long term benefits. For example, energy-efficient windows might have a higher price tag, but you’ll see immediate energy savings. This choice might hit hard at first, but it will be a benefit to you for a long time. As you make purchases, consider how long things will last or how much they will improve your life. Don’t buy the cheapest option just to save money. Spring for the purchases you believe will be worth it.
Create a Budget
As discussed, being cheap is all about saving money at all costs. This can quickly become an undesirable trait people see in you. To avoid this while still being frugal, create a budget. Having a budget helps you to see just how much you can afford to spend each month. Instead of saving money just for the sake of saving money, you can determine just how much you need to save while still giving yourself some allowances. It may also be helpful to track your expenses for a while to see where your money typically goes. You can then account for this when making a budget.
It’s no fun to be considered a cheap friend. Instead, you can be a frugal friend who is known for making smart financial decisions by weighing out the value of things. There are plenty of ways you can be frugal without being cheap.
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It can be difficult to know how best to preserve your wealth for your children. You’ve worked hard for your money and you should be able to distribute it the way you want. You can use tax-advantaged accounts, invest in real estate, or set up a trust. Each of these things is a great option for when you need to figure out what to do with your money.
Use Tax-Advantaged Accounts
Tax-advantaged accounts like IRA can be a great way to pass on your money to your children. With life insurance, your beneficiaries receive the proceeds tax-free, without having to go through probate or worrying about stock market fluctuations. Fixed or variable annuities allow you to participate in the stock market through mutual funds or fixed-income investments and also have a life insurance component. However, these policies often carry hidden fees so it’s important to shop around and study them carefully.
Invest in Real Estate
Real estate is a good hard asset to own for future generations. Make wise building and improvement choices for the future. When building a home or investing in real estate, you should use durable materials that will outlast disasters and decades of use so you can eventually pass the land down. Inheritors who wish an estate to last several generations should withdraw income only and avoid dipping into principal. Investing in real estate can be a valuable way to preserve your wealth for your children.
Set Up a Trust
In certain situations, it may make sense to set up a trust to control distributions from the estate to the surviving spouse and children. If you or your spouse have children from previous relationships and you don’t have a prenuptial agreement, trusts can ensure that specific assets are passed to designated children. Children who are well off may prefer that you keep every penny of your nest egg rather than hand it over during your lifetime. Discuss the transfer of your estate with them so they can be prepared.
The above suggestions may not be right for everyone, so it’s important to consult an attorney or tax advisor to determine which makes the most sense for you. Evaluating distribution options for your money will help ensure your wishes are followed while maximizing flexibility for your heirs. Preserving your wealth for your children can come through tax-advantaged accounts, real estate, or trusts. While setting up your financial affairs may take some work, it is worth it!
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If you’re like the rest of America after a long lockdown, summer is looking good this year. You probably want to get out and find a pool, beach, lakefront, or other water area as quickly as possible. Whether you’re all about sunny sands or comfort by chlorine, your family wants to have as much fun as possible while relaxing. What can you do to make sure your next family pool outing is amazing?
Before any other thing, you’ve got to make sure your family is safe while in the water. This includes having designated lifeguards, using safety equipment when needed for young swimmers, and using sun protection! If you have young swimmers or older family members who are not swimming as well as needed, getting swimming lessons is a must. Their awareness that it’s important to be careful around water is critical to their safety, and your relaxation. Water safety is a top priority during swimming lessons, which can give you and your children the tools you all need to stay safe.
Fun Water Games
It’s easy for kids to have developed a dependence on devices during a long quarantine. Being faced with a large pool is both exhilarating and confusing. While you want your kids to play by themselves, it’s great to introduce some fun games they can learn, so they can practice playing together. Something as simple as having water pistols that refills from the bottom, which can be opened into the water for continual “ammunition”, and a floating target, can be a blast for all ages!
Sunscreen, Sunscreen, Sunscreen
Everyone has done it- the accidental extra toasty day at the pool! Prepare ahead with several tools which can help. Your first is a high-dose sunscreen, which you can ensure that all have both on, and rubbed in, in advance. The addition of a children’s chewable aspirin is protection against pain after, but it won’t protect the skin from damage. To do that, you need to have a reminder alarm to reapply, of course! This is a perfect time to distribute snacks.
Your pool fun can continue all summer long, safely and happily, with just a little advanced preparation. Add a bag of snacks and some goggles, and you’re all set! Pretty soon your little swimmers will be begging to be in the water far more than they beg screentime!
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Being a spouse in a young family can be an interesting part of life. On the one hand, there can be so much joy as you build a loving relationship, learn about life together, and find ways to support one another. On the other hand, there are some very real challenges that can be exceptionally difficult to overcome. Among them, the obstacles that can get in the way of being financially secure.
Debt is a huge burden on any family, but especially so on young families. It doesn’t matter if the debt is “good” debt or “bad” debt. It still needs to be paid and can still lead to many feeling like they’ve overextended themselves financially. Debt has been a huge factor in the decision of many millennials to delay milestones like marrying, starting a family, and purchasing a home. It’s not surprising. Millennials carry twice the number of personal loans as Gen X. Until the debt has been repaid, you aren’t really in the best place you can be financially.
Lack of Retirement Savings
If past debts weren’t enough to deal with, thoughts and worries for the future plague young families as well. It’s partially because of the massive debts many young families have that they are behind on their retirement savings. It’s a problem that only gets bigger the longer it goes on. The later you start saving for retirement, the less you’ll have to pull from when the time comes. If you have a job that provides 401(k) matching benefits, you may be able to take advantage of pretax dollars to start squirreling away retirement funds. You can also contribute up to $6,000 in a Roth IRA if you qualify to have one.
A Rising Cost of Living
Life is expensive. Cost of living refers to what it costs to pay for housing, food, healthcare, and taxes. Some places have a much higher cost of living than others, but overall, the trend seems to be that it’s rising, no matter where you go. The rate of inflation is partially responsible for that, but no matter what the reason, it’s unquestionably a burden for a young family trying to become financially secure. Education and job advancements are often seen as the best ways to get ahead of the curve.
The obstacles that young families face to becoming financially secure can be daunting. Large amounts of debt, a lack of retirement savings, and a rising cost of living can be tough challenges to overcome. Do your best to educate yourself about your options for addressing the challenges you face so you can make the best financial decisions for your young family.
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