6 Ways To Break Up With Your debt!

Courtesy of www..moneymangement.org

There's nothing like having financial independence from debt. Our debt comes from both smart choices and bad choices. I have personally been trying over the last four years to really get control over my own debt. I realize that paying off my debt was not a priority and that I made a lot of excuses and went on a couple of shopping sprees that were counter productive. But now I know if I want to be serious about buying a home, then I'll have take a different approach. I want the same for my readers, the ability to have more access to your income for your own personal enjoyment. If you are seeking control over your debt, here are 6 powerful ways to break up with your debt:

1.   Balance transfer

It is exactly how it sounds, transferring one balance to another. Your credit account sends you an offer to transfer a high interest credit account to a lower or zero interest rate. Consider the terms of the agreement-interest rate and the time period if there's promotional interest rate. This works best if the account is transferred to an account that is already paid off or has a low balance that can be paid off within the fast time period as well. This will save you money in interest and force you to accelerate your payments.

2.       Credit card balance settlement

Call your credit card company and ask if you can make any arrangement for a temporary reduction in interest or a payment plan for a reduced balance with accelerated payments. You do not want to close your account because it reflects negatively on your credit history but you should stop using the account if you are going to pay it off.

Courtesy of www.creditcardchaser.com

3.       Debt consolidation

Obtain a personal loan that can pay off all of your debts into one monthly payment. This may possibly save you money in interest but absolutely consolidate all of your debt into one place.

4.       Increase your income

Create additional income from a part time job or an investment. You can sell unused household items like furniture, electronics, clothes and shoes. You can seek a job that pays a higher salary. Become your own boss and invest in a small business opportunity.

Courtesy of www.raisingceokids.com

5.       Reduce your expenses

Plan accordingly with your budget to minimize your costs. Consider your expenses and making lifestyle changes like reducing your data plan on your phone, removing premium channels on your cable bill, utilizing less electricity. In extreme situations, consider downsizing your lifestyle. For example, renting a more affordable home or selling your car to pay off debt and using public transportation if more affordable.

6.       Snowball your payments

As you pay off one account, take the money you were using for that payment and roll it into the next accounts payments. Now you are building more disposable income to place toward reducing your debt. Either you can choose to pay the higher interest rate account first or the lowest balance account first. See march practical wallet posts for additional reasons to not let debt nail your down.

6 Questions to Ask a Potential Real Estate Professional

pic courtesy of KZukowski etsy

People make home purchases with different professionals based on their personal preference, experience, and type of purchase. Commonly, people prefer the use of a real estate agent, realtor, or real estate attorney. Real estate agents and realtors specialize in facilitating the purchase or sale of real property-land, home, and buildings. The benefit of a realtor is their membership in the National Association of Realtors and code of ethics. Someone could also find it resourceful to work with a broker or real estate attorney. Brokers would have the luxury of a team a professionals readily available to assist you and the RE. Attorney would protect your legal rights during the transaction.

Choosing the right person(s) to guide you through the process can make things smooth and tolerable. The choice to find your professional should be made after you secure financial resources and identify where you want to live. Once, you know how much you can afford, the representative can show you the best options available in your price range. You can find these professionals via personal references, public webpages like yelp, local offices, and advertisements. When you find a potential contender, start with these 6 key questions to help you determine if this is a match for you.

pic courtesy of muhc.ca

1. What is their availability like and how will you best be able to contact them?

2. What services require a fee and how much are the fee(s)?

3. Do they work with buyers in your price range?

4. What if you are unhappy about the services rendered?

5. What type of properties do they specialize in and how many years of experience & knowledge do they possess in the field?

6. Do they hold any other types of expertise that can benefit your purchase, i.e. foreclosures, first time home buyers, short sales, rent to own?

The Risks And Rewards of Buying Life Insurance

courtesy of www.healthysciencebuilding.com

Life insurance can be an important tool to pay for any expenses after your death and some expenses while living depending on your policy. Once you have the magic number for amount of coverage you want, seek out comparisons for monthly premium rates and plan benefits. Be sure to check the company’s reviews. Also, get to know the financial strength ratings from S&P, Moody’s, Fitch, or A.M. Best, this will show how stable the company is. 

There are many rewards for buying life insurance

                                              -Paying off debt and hospital expenses
                              -Leave less financial responsibility on your grieving family
                                                            -Covering funeral costs
                                          -Providing a cushion for your spouse and/or kids
                                                      -Creating wealth for your heirs
                                                           -Protect a small business`
                -Some policies offer cash reserve--additional source of supplemental income

courtesy of www.sentinelgroup.com

But there are also many risks to buying life insurance:

      -The purchase price for your coverage changes as you age

                  -Health conditions diagnosed prior to buying life insurance can limit the amount of coverage you can purchase

-The financial institution or the company holding your benefit can go under, making it impossible to pay your benefit 

-Purchasing too little insurance can leave a burden on your family and purchasing too much coverage can be a waste

-Purchasing life insurance with your employer is more cost effective but if you leave your employer the plan may not transfer to an individual policy

The most common types of life insurance is term, whole, and variable. Term life is the purchase of a death benefit based on a group of years usually in 5 or 10 year increments. It is usually a cheaper alternative with high coverage but if you do not pass away within that time then you have to purchase another term. Whole life is the purchase of death benefit for the remainder of your life, stays in effect from purchase date until death. This type of policy offers a cash reserve and it is invested by the insurance company until the benefit is paid. Variable life is not as commonly selected but operates like whole life insurance with changes throughout a term of years for investment on cash reserve. For example, you would personally choose where your cash reserve is invested every ten years.

Last words of advice—keep your contact information up to date and your policy information accessible for people to find upon your passing. Hopefully, we will all live a long, beautiful life. In meanwhile, this gives you a head start to a make a decision on what will be best for you. Feel free to comment or share below or on social media at Instagram @practicalwallet, Twitter @practicalwallet,  and Pinterest @practicalwallet.

The Dreaded Budget Talk

Catching back up with the beginning stages of the buyer process, we are gonna make the dreaded dive into the less infamous budget talk. Everyone knows what it is but not everyone sees the value. To justify my viewpoint, let me tell you about a story of person I'll call Cotton. Cotton was excited to start college. Everyone told Cotton this is what he has to do because its the next step after high school. But Cotton lost interest in just following the "trend" and took a break. A concerned counselor met with Cotton emphasizing the need to continue to build his knowledge and to use college as a tool to lifetime relationships and personal growth. Cotton found his own value in the message and returned to flourish in his studies.

Now I say all that to say that when we have responsibilities with our income, the next step is budgeting. But people give all kinds of reasons of why budgeting is dreaded but we have to find our own value in it. Some may say its too much work, there's no room for error, its a boring way to live, they aren't discipline enough to keep to the budget, or it makes their money feel small. But to all those reasons, I have one response--cater your budget to you. By doing so, you can allocate money for miscellaneous or error, reward yourself to make budgeting fun, develop habits to create the discipline, monitor your spending to see all the many places your money is used, and understand there is value in pre-arranging your money. So if your dreading the budget just consider this...

picture courtesy by www.hypable.com

Budgeting is as instrumental to our finances as sleeping is to our personal health. The average adult should maintain 7-9 hours of sleep per day. Too much or too little will have an impact on our body’s functions. Too much or too little budgeting will cause over usage of credit cards, under-utilization of income, or inability to meet bill payments. So for our future home buyers and savers, budgeting is going to be key to achieving our goals. If you are a future home buyer; give yourself some "curb appeal" by showing great payment history and discipline with debt. If you are a saver, we need to continue to grow our disposable income. 

The principal of budgeting is to add up the income and assign an allocation for each thing that you usually spend your income on. Everyone's budget will be different, you can be general or you can be very specific. It can be from daily to monthly monitoring. So I’ll give an example of a balanced budget—one that can include personal interests and responsibilities...

Pay check for 3/12/16:      $1800
Item	Budget
Rent	$900
Utilities	$100
Food	$175
Transportation	$50
Subscriptions: Netflix, Kindle	$20
Entertainment	$60
Hair	$45
Credit Card 1-Discover	$50
Tithe/Donation	$160
Savings 1-Retirement	$70
Savings 2-Miscellanous	$20
Savings 3-House	$150

I now entrust you, my readers, to start or continue to budget to find ways to maximize your income. Theoretically, the budget should be categorized by the following percentages: 50% to bills, 10% to savings, 10% to personal wants/needs, and 30% to insurance, food, travel/entertainment. Catch our next post on March 30th about how much life insurance is enough? Comment or share below or on social media at Instagram @practicalwallet, Twitter @practicalwallet,  and Pinterest @practicalwallet.

Recognition is Due!

Special shout out to a kind friend of mines, Sathiyyah that recognized me for a Liebster Award nomination via her great blog NichofTaime!! Since I'm so new to this blogging world, I did find it really refreshing that someone other than myself found my blog inspirational and worthy of their time. 

The rules of this award are as follows:
-Thank your blogger friend for nominating you
-Share the award on your blog and social media accounts
-Answer the ten questions you were given by your nominator
-Nominate 10 other new bloggers that you admire
-Notify your nominees via social media

So here I go...

1. How long have you been blogging? Just a little over one month.

2. What inspired you to begin your current blog? I like to help people. There are a lot of people who want to be home owners and financially secure but don't have mentors. I just want to reach people and encourage them to reach their potential.

3. What do you love most about yourself? My best quality is my resilience. I love that I inspire to be stronger and try to grow in areas of weakness. When I have an obstacle or challenge or sickness, I don't let it consume me too long, I seek help and take action.

4. What is your favorite hobby? I never had a consistent hobby or game that keeps me. My pet peev is repetition but I do enjoy home searching. I can go hours on zillow, homes.com, realtor.com, my credit union program, and houzz. Most of my search is based on me not being able to afford 90% of the houses and hoping the market will change lol.

5. What is one hair care product that you cannot do without? I always need a good deep conditioner. Right now I am using As I Am's Hydration Elation Intensive Conditioner which does wonders for my dry scalp.

6. What are a few long-term goals for your blog? Down the road I want to do interviews for success stories and maybe some celebrity cameos. If the blog goes well, I want to create products around the subjects like books and posters.

7. How much time did it take you to launch your blog after the initial idea? Probably about 1 month and half because I announced the idea and didn't want people to think I was flaking.

8. What is your favorite quote? What's meant to be, will be.

9. Where is your favorite place to blog? Starbucks? Panera? Reading nook in your home? Right at home with my hubby.

10. Are you an “as you go” blogger or do you prefer to schedule ahead? I don't quite have a pattern yet but hope to be a "as you go" since scheduling is not working out well for me :)

So I nominate the following blogs from friends and inspiring people that I haven't met yet.

 Dee Dee's SipShopVino

 Tiffany's Imbued, LLC

Sebastian's The Gay Bestie

Jessica's HERstory

the following are not new bloggers but definitely worth a visit as well:

House of Brokers Realty

 Mr Money Mustache

 Smart Asset

My questions to my nominees are 1. How long have you been blogging? 2. What is the best advice some one gave you? 3. What is your biggest plan for your blog? 4. What is your morning ritual? 5. What is a great book in your current or past collection? 6. What age do you plan to retire and do you have a plan? 7. What helps you find your inspiration for your blog  and its posts? 8. Do you like oatmeal or grits? 9. Can you name place in the world you want to travel to? 10. What is your best blog post so far?

Does your debt nail you down?

 It's time to get MOTIVATED! It's time to get ENGAGED! It's time to be HOPEFUL!
Our current financial status whether good or bad is not a description or map of who we are. We decide who we are and we are in control at all times. Take back your control mentally by building confidence in knowing you can achieve your goals. Once we open our mind to it, we can begin to create the tools to knock our debt down and out. Debt shouldn't nail you down. By nailing you down, I mean debt should not control you and limit your personal life enjoyment.

Courtesy pic by www.animatedviews.com

Our financial status is simply a creation of past decisions and current income. If  we want to change it to make it better, we have to be optimistic. You can't win a fight if you think you are going to lose. If your money is limited, there are ways to have fun without spending money or by being frugal with your money. For example, try substituting a night out at the restaurant for a family potluck or substituting a day at an amusement park for a nature walk or picnic at the park. If your money is not limited but you make spontaneous purchases that limit your savings then you should put place your savings in an account before your go freely spending. 

The biggest way to fight debt is to increase our disposable income. Disposable income is everything you have after you pay your essentials. Three debt fighting strategies that have helped me are below:

      1.  Find out how much interest is added monthly to your credit card or loan account. Then pay the total interest plus your minimum payment plus a little extra cushion. These payments can be divided into weekly or biweekly submissions but will help you aggressively take control of the account.

Courtesy pic by www.idcwebs.com

                2.     Pay the account with the highest balance first; preferably the higher interest rate too. As you pay one account off, snowball the payment used for the previous account to remaining accounts. You can pay each credit card account until it is under 35% of the credit limit or you can pay it off to use only during emergencies.

3.      When creditors threaten to report you to the credit bureaus, be proactive early, and find out if you have other options. Ask for a payment plan to avoid reporting and see if you qualify for a reduction for being concerned about the account being paid.

Watch for our next personal finance post on ways to increase our income so we can begin to increase our disposable income. Feel free to leave comments on this post or social media on Instagram @practicalwallet, Twitter @practicalwallet,  and Pinterest @practicalwallet.

  

How To Buy A Home Like You Wash Your Clothes

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So you want to buy a home but you don’t know where to begin or end? As you have already gathered, buying a home is not simple, easy, or quick. In fact, it will take a few posts before I can really break down the essentials of home buying but for today I will try to simplify it to a comparison of your Saturday morning wash day. Maybe it would look something like this…

Step 1: Gather all your dirty clothes. Or in the case of home buying; gather your facts, Research & Budget. Determine how much you can afford, how much do you want to pay per month, how and what amount should you save for the deposit, and what will the mortgage lender require from you. (Hint: lenders usually require proof of recent tax returns, proof of employment, verification of liquid assets, good credit score, good debt to income ratio, etc.) Identify the cities or towns you prefer to live in. The most important decision in home buying is location---your distance to work, family, fun, school, and safety. Budgeting will help you set guidelines for your spending and savings.

Step 2: Sort the clothes by colors. Now, you will sort your facts, Prioritize & Plan. Ask yourself what will take first. I recommend doing the most difficult task first—for me it’s lowering my debt but maybe for you its saving, credit building for the first time, or credit repair. Attacking things piece by piece will keep the process less complicated and less overwhelming. Planning for those priorities will help guide you to your goal.

Step 3: Pretreat the heavy stains. Let’s Repair & Protect our credit. Review your credit report for negative marks and take the biggest marks (that are not due to fall off before your home purchase) under repair—pay down your credit limits to a usage of 33% or less, pay your creditors, remove false claims on your report, ask for a pay to remove debt plan with your creditors. Protect your credit by continuing to make on time payments with your current accounts, limiting the usage of your credit cards, avoiding requests for new credit accounts or loans, and monitor your credit report for suspicious activity.

Pic courtesy of bridalguide.com

Step 4: Find the right washer. Do we need a big machine or small one…is it a big home or small one. Time to Find your Home Style & Preferences. In short, what do you require versus what can you live without in a home. What’s your house style---to name a few there’s Victorian, Cape Cod, rancher, colonial.  Do you want a condo or a single family home? How many bathrooms, bedrooms, and closet/storage space? What appliances or amenities are needed---washer/dryers, pools, fireplaces, basement, wood floors, or private parking?

Step 5: Load the clothes and wash. Time to load the bank. Meet with a lender to Get Preapproved. Getting preapproved lets you know the amount the lender will pay after the home is appraised and the title is presented. Now things are getting started, you have leverage over others who may bid for the home you select and may only have prequalification for the loan or unstable financing.

Step 6: Rinse cycle. Time to rinse out the professionals and Find your Realtor. Maybe you can get someone to recommend a good realtor to you. This person should be knowledgeable in the community you are seeking, well suited for the position based on years of residential selling experience, and available during your schedule to provide services. Find out what is the cancellation policy for open houses or suspending your home search all together. And most importantly what is their commission rate?

Step 7: Final Spin Cycle and remove the clothes. Finally, we found our home; we will perform a home inspection, and Make an Offer. Don’t buy blindly, consider a general home inspection, mold inspection, and flood zone check. If the offer you make to the seller is accepted, we have to close the deal. The closing process involves the completion of legal forms, the official title search, and payment for the title transfer occurs.

You’re probably thinking wow that’s so much information and honestly it is. But keep with us as I break down each step and show you ways to complete each step. And as your knowledge increases things will begin to become clearer to you what the best choices to make are. Feel free to comment or share. We are also on Instagram and Twitter as @practicalwallet!