How to Manage Your Money and Prepare for Retirement on a Budget

We all hope to retire at some point in our adult lives. However, to achieve that goal, it is important to have a level of fiscal literacy. 

This means that you know how to manage your money today in a way that allows you to save money for later in life. What are some ways that you can prepare for retirement regardless of how old you may be right now?

Talk to a Financial Advisor

Whether you are 20, 40 or 60, a financial adviser can help you make the most of your financial resources. 

This person may be able to recommend mutual funds or other investment accounts that can grow exponentially over time to help grow your nest egg faster. You may also be given insight into how you can use Roth IRA or 401k accounts to help manage your tax burden in retirement.

Take Advantage of Social Security

Social security benefits can be worth thousands of dollars per month depending on how long you worked. 

If your spouse has a work record, you may be able to claim benefits based on that record whether you are a male or female. Professionals, like Horn & Kelley, PC Attorneys at Law, know that looking into these possible benefits is incredibly important. 

They may help you secure your financial future in the event that you are disabled or choose to raise the kids instead of go to work.

Find Easy Ways to Downsize Your Lifestyle

Instead of living in a 3,000 square foot home, it may be better to buy a condo. If you like to travel, it may be a good idea to buy an RV that you can customize to your liking. 

These options may cut your housing payment by hundreds of dollars per month as well as reduce the amount of maintenance that you are responsible for.

Buy Long-term Care Insurance

There is a good chance that you could live into your 80s or 90s. Therefore, there is a good chance that you will get sick or otherwise suffer health issues that require long-term care. 

Buying long-term care insurance helps pay for the services that you need without depleting your personal assets.

Retirement should be a time in life when you get to live life on your own terms. If you take the time to plan out how much you will need to live comfortably, you should be able to achieve your goal. 

Those who need help managing their money should turn to a trusted family member, friend or professional financial adviser for assistance.

Building Your First Home? 4 Strategies To Handle Tricky Financing

When you build your first home, one of the things that you have to make sure that you have in order is the financing. 

If your credit score is good and you can show the income to pay the loan or mortgage off, then it's usually fairly easy to secure the financing that you need. 

It's best to make a budget of the size of the home and the work that you want and need done before applying so that you have an idea as to how much you will need to borrow.

Type Of Closing

There are basically two ways that most finance institutions will handle the closing on a new home. Most will go through a one-time closing. 

This means that the interest only loan will be approved for about six to 12 months while the home is in the process of being built. Once the home is built, it is converted to a fixed rate for 29 years. 

It's best to pay off the loan as soon as possible so that you don't wait this long. The second is a loan with two closings. There is an interest only construction loan for the building of the home and a second closing that will be refinanced once the home is built.

Qualifications

This is where you need to have the good credit scores and the income that is required to secure a loan. Most companies will look harder at a construction loan than a typical loan for purchasing a home because the collateral is not in place yet. 

Most down payments are about 20 percent. Appraisals and inspections are required before the loan is secured. 

Real Estate Agents

Sometimes, a real estate agent can help you get a lower interest rate and get through the loan process a bit faster. 

You need to get the agent to submit pictures and paperwork about the property and the intentions of the home that is to be built. This will often show that you are dedicated to the process of finishing the home and that you aren't going to back out.

Save Money

Before you secure a loan, save as much money as possible. Try to start saving about a year in advance. 

If you have a good amount of money available, you can use it to pay off a good chunk of the loan soon after its secured instead of struggling to get it paid back once the home is built.

Building your new home is an adventure. If you aren’t sure the best way to go about financing, consider working with a professional like those at Assurance Financial Group. 

You get to decide what it looks like and what it has inside. Once you jump over the financial hurdles, it's usually smooth sailing during the construction and design process.

Emergency Fund and Why It Is Necessary

Keep saving, for who knows when the thick, sturdy and long trunk may be filled. Sometimes, the bright shining sun on a beautiful spring day may hide behind the scary black clouds to pour out thunder. 

Life is never as we see it, even Steve Jobs had to face a stressful public failure, although he was a millionaire by then, but money is never constant, it keeps flowing away like a gushing river. 

Saving up for an emergency is the best way to cope up in times when an excess amount of money is immediately needed.

An emergency fund stored up beforehand can prevent people from untimely issues like that of health, failure or even poverty; saving money may seem difficult in the beginning, cutting luxuries to save up, but the result of hard work and patience is always fruitful. 

Even if the emergency fund isn’t too big in amount, it’ll always help in reducing the amount of money. Some Americans reportedly tell that during the great depression in the 1930s, their saved up emergency funds helped them eat at least once a day for some time. 

Types of emergency funds

● Short termed

This type of emergency fund is usually for smaller emergencies like house repair, car repair, failure of a costly appliance, health emergency and much more. 

These should be in accessible accounts which usually bear little interest. Accessibility is the most important thing- since usage of a debit card or check writing is a must.

● Long term

These are for big scale emergencies like- earthquake, fire, unemployment, immediate purchase of some costly but necessary thing. 

These also need to be accessible but keeping them safe in an account that takes days to liquidate works fine, till the short termed emergency fund is well saved up. These have an increased level of interest.

Always remember an emergency fund should always be quickly accessible and easily liquidate (converted into cash) and should be kept at – no risk. 

Benefits of having emergency fund

● Stress free

Life without a ‘financial safety net’ is a life on ‘financial edge’ hoping to pass by without bumping into an emergency; it intimidates the financial stability and well- being of a person. 

Being well prepared for any kind of financial menace can make a person lead a successful and confident life. Stress is the cause of serious health issues; better keep away from it and start saving up for stability. 

● No unwise whims or fantasies

Have a separate account for the emergency fund; it’s the best way to store up funds. The more out of sight it is the more out of mind it will be, if it’s as close as on the debit card, it won’t be your fault but your four-five digit saved up money will lure you into buying a dress or the latest gadget. By keeping it in a separate account, you’ll know how much you’ve saved up and how much more you need to save.

● Away from bad financial decisions

It will keep you away from bad financial decisions; you’ll always have this thought stored up for the fund to be saved. All decisions will be risk-proofed when a goal of saving up stands ahead. 

Digits of the fund and why so much

According to financial experts, saving up to six to eight months worth of expenses is always the best. It’s painful to cut off luxuries which we treat ourselves with, or pamper our souls with new clothes and food. 

But these funds can help in times of serious trouble. Corporate jobs are always risky and demanding, unemployment can stand up unexpectedly with no warning bells. Taking the unstable economy in hand, a saved up fund of about 3 months expense doesn’t come to even close enough of being an aid during the emergency. 

Time takes a different toll when saving up for retirement; six month’s expense will look too puny. A saved up $14583 for funds will look like a small twig.

Building the emergency fund

The most disheartening aspect of saving up for an emergency fund is the contribution of a large amount of money. Saving $6000 per month seems out of reach for some people. 

But there is no need to pay everything at once; an emergency fund can be built up little by little with time.

Building the fund

First, make a well-schemed list of the expenses per month.

Food	$5233.71
Transportation (no car)	$225.4
Utilities	$201.76
Sports and leisure	$275.44
Child care	$2328.77
Clothing and shoes	$ 504.72
Rent (approx)	$1942.22

If the pocket is short, then some expenses can be shortened or cut. Cutting basic expenses is very difficult, but slowly with time, some improvements can be made. 

If you start saving up for six months, the total amount will cost approx $27000 which may increase with interests. 

Months	Cumulative expenses
1st  month	$ 4,658.98
2nd month	$ 9,317.96
3rd month	$ 13,976.94
4th month	$ 18,635.92
5th month	$ 23,294.9
6th month	$ 27,953.88

Daily expenses may vary from state and city wise, moreover the monthly income of a person and the people living in the house matter. 

Break it down

First, determine and make a monthly expense chart, then decide the figure of the fund needed as per the money left from the monthly income. 

Determine the time it will take to reach the goal based on monthly savings, breaking it down will help in keeping up with this goal as well as targeting for other things too. 

Wasted money

A family usually wastes its money up to 10% per month. Over usage of electrical appliances, electricity, ordering food etc can be stacked and used wisely. This money, be it little in comparison can be used up for the emergency fund.

Automatic payment

Automatic or direct payment from the checking account to the emergency fund is a good method of payment. Forgetting will not be a problem, and since it will be done by the bank the person will not worry about it for longer and will try to adjust to the changes.

Dividend earnings

Padding the account with dividend earnings is also a good method, dividend accounts are not meant for just investing the income they can also be padded up for the emergency funds.

With pain comes success, a saved up emergency fund will bring pride and assurance.

Peter Christopher is the personal finance blogger at Finance Care Guide and a guest columnist for many blogs that deals with providing practical solutions to different financial issues. Visit him on Google Plus and Twitter.

5 Things You Should Know as a First-Time Landlord

It’s never been a better time to become a landlord than now. Rental rates are on the rise, people no longer strive to own property, and the real estate market keeps on getting stronger. 

As a smart and farseeing person, you might consider rental income as a good way of building wealth. While it is obviously a good decision, there are some facts you should learn first. 

1. Consider it a job, not a source of a passive income

If you have never been a landlord before, you are likely to think that your job will be limited to finding tenants, signing rental agreements, and receiving monthly payments on your bank account. 

It’s ok if you think this way because the majority of movies represent the process just like that. However, the cold truth is that it takes a lot of time, efforts, and money to rent your property out. 

No one argues that becoming a landlord can be a profitable move, but you should realize the amount of work involved. To avoid potential problems, you need to invest your time into tenants screening. 

Plus, you should be ready to make repairs when something gets broken. You need to respond to your tenant’s requests and make sure they are satisfied with their living conditions. You must be ready to receive calls from your tenants in the midnight because there is an emergency. 

Sometimes you need to worry about your tenants delaying their monthly rent or ignoring utility bills. The list is already long but not yet complete. 

2. You need to get some legal education

It’s easy to break the law when you don’t know it exists. Chances are that you prefer to avoid litigations, so you’d better learn the local laws that regulate relationships between landlords and tenants. 

The bad news is that these laws vary from state to state. The good one is that you can easily find them online.

As a landlord, you should know that preferring one tenant over another can be considered a discrimination if the two applicants are of different races. There is a Fair Housing Act designed to regulate such issues and ensure that everyone is treated equally. 

Plus, there are clear regulations regarding the way landlords should deal with security deposits. What’s more, you should always comply with housing safety codes. In other words, you’ve got a lot to learn.

3. Being a landlord is associated with some risks

Decided to become a landlord? Get ready for adventures. Some of them will be fun, but the majority will not. 

For instance, you should be ready to wake up in the morning and find out that a part of your house is damaged. Alternatively, you can learn that your tenants have not been paying utility bills for a while.

Before you become a landlord, you should be prepared for unexpected situations. What you need to understand is that even the most comprehensive tenant screening cannot save you from untidy and irresponsible people. 

The best solution here is to get ready for the worst, but hope for the best. 

4. Not all tenants are created equal

Yes, all people are different. You can rent out your apartment for years and have no problems at all. 

Or you can get dozens of major and minor issues during a short-term rental. It all depends on what people happen to live in your place. That is why tenants screening is so important. There are many guides on how to conduct it, but most of them agree upon the following:

• Learn about your tenants’ current income
• Research their employment history
• If possible, get in touch with their previous landlords
• Evaluate his credit score
• Make sure there is nothing to worry about in terms of criminal background

Tenant screening may take some time, but the result is definitely worth it. The good news is that some of the checks can be done online. 

5. There are services that make things easier

As I mentioned in the previous paragraph, modern technologies can make landlord’s life easier. Now tenant screening can be done from your computer. 

The best property management services have already integrated tenant screening options into their online platforms. Thanks to such services, the process of tenant screening gets easier and faster. It’s never been a better time for becoming a landlord.

In fact, modern technologies have affected the world of property management in many different ways. Not only can you screen your tenants online, but you can also e-sign your rental agreements and collect monthly rents from the comfort of your home.

If you are reading this, chances are that your idea of becoming a landlord is serious. If this is so, then you should definitely give it a try. 

Remember to learn from your own mistakes and ask for professional advice in a moment of doubt. Becoming a landlord is way easier than becoming an astronaut, so leave your doubts behind and go for a new experience in your life. This one is going to make you money.