Making the Most out of Your Tax Refund

From February to April each year, millions receive an influx of cash from a tax refund, ranging from a few hundred to several thousand dollars. That additional money can be put to use in several different ways, including making a major purchase, setting aside for a rainy day, or even splurging on a vacation for the family. For the individuals who receive a large tax refund this year, knowing exactly what to do with it can be a little daunting. But don’t fret. Below are a handful of smart ways to ensure you’re making the most out of your tax refund as soon as it hits your bank account.

Set it Aside

When a tax refund check comes in, many are quick to spend down the balance to pay down debt, make a big purchase, or cover necessary bills. While these are all fine choices for a tax refund, most consumers overlook simply putting some of the money aside for a rainy day. Financial emergencies pop up without notice, and for most, without enough in savings to cover the need. When that takes place, it can send your financial situation into a whirlwind. Plan to set a portion of the next tax refund into a high-yield savings account for those just-in-case days that are sure to come in the future.

Eliminate Debt

If your emergency savings is covered, the next smart option for making the most out of a tax refund is to pay down high-interest debt. Today’s credit cards have double-digit interest rates, and when a balance remains unpaid every month, interest accumulation adds up to a pretty penny. Take a portion of the tax refund and pay down the debts with the highest interest rates first to save yourself on interest charges in the future.

Contribute to Your Retirement

Just like setting aside for an emergency fund is necessary, so is saving for the long-term. Taking a portion of your tax refund and infusing that into a retirement account is a sound choice. Individual IRAs provide an option to save for the often-significant goal of retirement, and they are both easy to establish and manage over time. If you aren’t sure of your options for retirement savings, consider speaking with a financial planner or investment professional to get the low-down on what you’re able to do.

Pay for Expenses Now

In addition to saving some of your tax refund and working toward eliminating high-interest debt, another way to make the most out of a cash influx is to pay expenses in advance. This could mean creating an account for a specific goal, like a vacation or holiday shopping, and simply earmarking it for that need now. Think about the expenses you can take care of in a lump sum for the year, like car or life insurance, some utility bills, or the new phone you will need in the next six months. Using a tax refund for this purpose means you won’t spend down the cash long before you need it.

If you aren’t one who receives a tax refund this year, you aren’t alone. About 20% of Americans don’t expect a large check come tax time, which can mean the need for extra cash is pressing, especially if you owe during tax season. Rest assured you have options, too. You may qualify for a quick cash loan from Familytitleloans.org, or you may have the option of pursuing a personal loan without the need for collateral. No matter the reason behind your cash needs, understanding these options can get you through a slow financial period easily and quickly.

February 19, 2018 at 11:02 PM Leave a comment

Picking the Right Home Warranties

Home warranties are one of the most underrated protections in the world. Think about the costs of home systems and appliances – lots of investments to make. Take a moment to consider a new-age way of managing home systems: smart home automation. According to various industry authorities on the subject, the national average cost of installing a home automation system is $1,207. Since we are already in the digital smart home stage of the Internet of things, it’s important to add this element to the notional concept of a home warranty. Today, thermostats, refrigerators, stoves, and microwaves are all capable of added convenience, security, user-friendliness, and money-saving functionality thanks to smart home features.

If you’re still running on a traditional model, your home still requires a washer and dryer, stove, microwave, refrigerator, dishwasher, garbage disposal unit, etc. When these systems and appliances are new, you don’t have too much to worry about since they are covered by a manufacturer’s warranty. However, after that warranty has expired, the chances of these systems experiencing problems is likely to increase. That’s when a home warranty becomes a home necessity. Here are some of the costs of systems and appliances for US households:

  • Refrigerator – $1400
  • Water Heaters – $1,250
  • Electric System – $1,050
  • Air-Conditioning – $2,500
  • Garbage Disposal – $349
  • Laundry Appliances – $780
  • Garage Door Openers – $300
  • Dishwashers and Ovens – $875

The repair costs for these items will vary from approximately $93 for garbage disposal units on the low end to $290 for air-conditioning units on the high-end. The more expensive a unit is to purchase, the greater the repair costs. That’s why items like AC and heating systems, water heaters, laundry appliances, heating systems, refrigerators, and dishwashers, ovens and high-quality microwaves can set you back a pretty penny.

The costs for repairing appliances also depends on where you live, and how many quotes you get before accepting a technician to come out and do the work. It is always important to ask whether their fees include the service fee, the parts needed to fix the system/appliance, and the labor charges.

The average cost of appliance repair in the United States is $170, with low-end figures at $105 and high-end figures at $236. If the appliance is accessible, it may be easier for the technician to repair, and cheaper too. Another point that needs to be considered with home systems and appliances is the availability of parts for the device. Anything that is in limited supply or outdated will be subject to higher repair and maintenance costs.

How can you protect your home systems and appliances with the right home warranty?

In the United States, there are multiple home warranty providers in every state. This makes it somewhat challenging to pick one that will work for you. Fortunately, leading home warranty aggregator platforms provide a wealth of options for clients seeking the most affordable, and comprehensive home warranty plans. From the west to the east, and the north to the south, your home warranty options are truly diverse.

For example, residents of Arkansas typically spend a lot of time conducting market research for the best home warranty companies in the state. Among them are the following renowned home warranty providers: Select Home Warranty, Choice Home Warranty, Total Home Protection, American Home Guard, America’s First Choice Home Club, First American Home Buyers Protection, HSA – The Right Home Warranty, Total Protect, HMS Home Warranty, Secure Home Warranty and others.

Choose the Right Home Warranty Provider for Your State

Residents of the state of Arkansas must deal with a lot of humidity, moisture, and extremes in weather. For example, the state receives 50 inches of rain every year, according to the Prism modelling system. This makes Arkansas home warranties an absolute must-have. This state is also subject to extremely high temperatures in summer, and that’s when air-conditioning units typically go on the blink. It’s not only people living in the metropolis that need to worry about system and appliance failure, it’s also people living out in villages and small towns too.

It’s also important to point out that home warranty providers may have a national reputation, but that doesn’t mean that they offer their services in your state. Arkansas home warranties should carefully be evaluated for their range of coverage, affordability of plans, and user reviews. One way to do this is aggregator home warranty review platforms, and others include objective resources such as TrustPilot to get an understanding of the user experience. All in all, it’s better to put a little more effort into reviewing the services of home warranty providers so that you don’t get stuck with a company that refuses to pay out when things go on the blink.

 

February 19, 2018 at 11:26 AM Leave a comment

Solid Signs That Will Tell You if You’re Ready for Homeownership

Now that our economy seems to be recovering into a much more stable position, becoming a first-time owner isn’t as intimating. It might be the time to start thinking about buying into the Australian dream of homeownership. Although every situation is unique, there are a couple of solid signs that will tell you if you’re ready for homeownership. Read on to see if you’re ready for that dream home.

You have a steady job. Without a job or any steady stream of income, you’re thedream of homeownership will be extremely unlikely. However, if you’re secured with your current position or have been in a company or business for years, then the more likely that your job or business will be viewed as steady enough for lenders to back up homeownership.

You are free from debt. You have successfully paid off the outstanding credit card and car payment debt so you don’t have those extra bills that may reduce your ability to pay for a mortgage. The extra cash you have that won’t be going to debt payments is vital to ensure that you can cover the expenses of being a homeowner, which includes homeowner’s insurance, property tax, maintenance, repairs, and furnishings.

You have a high credit score. Paying off your debt diligently and watching your credit report will allow you to boost your credit score, which will get you a better deal from lenders as well as a lower interest rate. Lower interest rate means lower monthly mortgage payment. This means becominga homeowner becomes a more affordable prospect.

You have solid emergency funds and savings. Certain circumstances happen regularly whether with a house or in your life. Therefore, it makes sense to plan for this by having extra accounts, which includes emergency funds and saving accounts. After all, it won’t do you good to rely on your monthly income to cover unexpected costs since your monthly income has already been calculated and is crucial for the mortgage and other bills.

You can shell out high down payment. 10% down payment saved outside of your savings and emergency funds total means you’re ready to buy a house. However, if you can put down up to 20 percent, it’ll be even better since you’ll effectively avoid PMI or private mortgage insurance requirement. As a plus, more down payment means lesser monthly payment.

You know your way around. Doing your own research (like what you’re doing right now) just means that you’re responsible enough to handle the preliminaries of home hunting and buying, There are tools online that can help you calculate home loan interest rates, compare home loans, get helpful guides, and even get in touch with a lending authority.

The Bottom Line

So, does all of these mean you’re ready to buy a house? If you can answer “yes” to these factors, then you can now move on to the next step of getting prequalified, choosing a Realtor, and visiting availablehomes for sale. Now your dream of homeownership can start to become a reality.

February 19, 2018 at 9:16 AM Leave a comment

Preparing Your Checkbook For Valentine’s Day

When anticipating the most romantic day of the year, it’s easy to let your love speak louder than your finances. Once you tally the cost of your gifts, dinner, and night out on the town, your Valentine’s Day bill can spell trouble for your tight budget. Though it’s only one day, the 14th has the power to expose the holes in your budget. Let’s take a look at the typical costs of the day before checking out alternatives to this spending, so you can save your budget without disappointing your valentine.

Valentine’s Day surveys show Canadians are romantic

Last year, Ebates.ca published its shopping poll just before the 14th. The survey analyzed the way Canadians shop on special occasion like anniversaries, weddings, Mother’s and Father’s Days, and baby showers. Of course, Valentine’s Day was on the list, too.

The poll revealed 68 percent of respondent thought Valentine’s Day was a special holiday. The average person planned to spend $58 on gifts for their special someone one. Compared to weddings, for which the average spent $120, this gift budget seems modest, but it’s not the only way lovebirds spend their money on the big day. Valentine’s Day is usually curated around a date night that consists of an expensive dinner and night on the town — both of which add to the bill.

The opportunity to spend is there

When you think of V-Day gifts, you probably think of roses, chocolates, and diamond-encrusted jewellery. Most people would choose just one of these options, but the temptation to create the ultimate gift experience is there. Last year, Bankrate calculated what it would cost to create just that in their Be My Valentine Index. They built a virtual gift basket that included all the stereotypical Valentine’s Day gifts, and the final price tag was $600.

Its costs can only put pressure on a broken budget

It doesn’t matter if you stick to a modest $58 for a gift or choose to spoil your sweetie with a $600 gift basket. The only way your shopping can affect your finances negatively is if your budget is unprepared for your purchases. Unfortunately, at a time when 47 percent of Canadians fail to use a household budget, this is incredibly easy to do.

Without a budget, you can’t track your finances effectively, so you can’t understand how much extra cash you have to spend on the big day. Without a budget, there’s no way to save effectively for special occasions. Without a budget, many Canadians fall into cycles of living from paycheck to paycheck. This living situation means they have nothing left over to put towards Valentine’s Day once they pay their usual bills.

Make budgeting a habit & avoid financial shock

Luckily, for those living paycheck to paycheck, there are ways to avoid going into debt when unexpected bills come their way. The number one way is with a budget. It can illuminate your finances in a way that helps you understand your capabilities and your limitations. Take the time to review your financial statements and accounts, so you can create an accurate summation of your typical monthly purchases. Once you have a list, you can sort them into necessary and unnecessary uses of your money. Try to eliminate as many of the unnecessary purchases as possible, and reroute the money from these spending habits into a savings account. It will take time to accumulate funds, but eventually this behavior can help you create emergency savings for unexpected bills and expected holidays, like V-Day.

Until that happens, speak to your partner and find out their expectations for the holidays. Be honest with them about your limitations. Though it may be awkward to bring up money, it’s an important conversation to have. It clears up any assumptions you or your partner may have about the holiday, so you can have realistic expectations about the big day.

You can still surprise your special someone on a budget. Though you may not have the budget of Jeff Bezos, the most recent man crowned the richest person in the world, you can brainstorm creative ways to spoil your honey. Don’t worry about their reception; these imaginative gestures often end up being more romantic and meaningful because of the time and effort you put into them.

Think outside the box this 14th and show your partner your true feelings. It’s a cheap way to keep your spending in check. More importantly, create a budget, so you know just how much spending you can do before you jeopardize the rest of your finances. Spend with your budget and not your heart, and you’ll prevent Valentine’s Day from bust

February 13, 2018 at 5:09 PM Leave a comment

Live a Fulfilling Senior Age Through Financial Preparedness

Aging happens naturally to all of us – NO EXCEPTIONS. Needless to say, many of us fail to plan for our future. Aging well requires careful planning. In this article, we’ll tackle the steps to ensure that your financial, living and medical needs can be met as you age after retirement.

Step 1: Assess what your income will be: Assess first how much income you are currently having. Your income is composed of Social Security, pensions, annuities, and others. We’ll include investment income of any kind in the following steps.

Step 2: Identify the assets you have: Create a list of all the assets that you can use to live off after retiring. This list may include 401k’s, IRA’s, bonds, individual stocks, and investment in real estate. After determining this number, multiply it by 4%. The answer will be the income you can expect to live on each year from the listed assets. This sum, plus the income from Step 1, will be the total income you’ll have during retirement.

Step 3: Create a well-planned budget: Just budgeting is easy. Budgeting well can be hard. After knowing your income, it’s time to create a budget that will let you live comfortably within that level of income. Take note that much of this income will grow each year because of inflation, but most likely so will all your expenses.

Step 4: Reallocate your portfolio if necessary: You’ll be heading into the retirement phase of your life and investing. This will be a very different story from the accumulation phase you are utilizing up until now. It’s not good to move all of your assets to conservative cash and bonds. Instead, choosing a balanced portfolio will help provide you with protection from market drops and will endure with the pace of inflation.

Step 5: Understand Medicare: Your biggest expense in retirement can be your healthcare, as especially if you haven’t led a healthy life. What’s good anyway is that the government covers a large portion of the costs through health programs depending on where you live. You have plenty of options available. Learn what your health care plan can provide you so it’ll be easy to make an informed decision.

Step 6: Apply for extra health Insurance: Sometimes the healthcare plan does not pay for everything. Therefore, having a supplemental health insurance program plan is a must for retirees as it can fill in the gaps where the plan is deficient.

Step 7: Check out long-term care insurance: While long-term care insurances are typically expensive, the coverage is a vital part of a good retirement plan. Discover the option to protect yourself and your spouse from debilitating illnesses, which can extinguish all that you have built financially.

Step 8: Decide when to apply for Social Security: Granted that many people follow the standard guidelines when collecting Social Security, the program can be a little complicated and does necessitate some examination to decide the best time to collect for your particular needs. Get advice from a Social Security planner to help you make that determination.

Step 9: Consider retirement villages. Unlike what the popular media and culture would like us to think, living your senior age can be a lot easier and more fulfilling in retirement villages in NSW, Auckland or any state you prefer. Moving into a retirement village can be one of the best decisions you’ll do – one that can lease of life in your later years.

Take note that the retirement village option primarily a lifestyle decision. There are some financial sacrifices you’ll make in order to acquire the lifestyle benefits villages can offer. Talk to an advisor to know more about retirement villages today.

There you have it! Follow these steps and you’re bound to live a fulfilling senior age through well-executed financial preparedness.

February 13, 2018 at 7:44 AM Leave a comment

Ways to Save Money for Your Online Business

There are lots of ways to fund starting up an online business these days, from bank loans to crowdsourcing. When your company is up and running though, you’ll still want to find ways to cut the costs and ensure it becomes financially stable in the long run. Through a variety of different methods, whatever kind of online business you run, there are many ways to save money while still working towards growth.

Outsource Certain Tasks

A lot of businesses are put off from the idea of outsourcing, especially in their formative year. The main two reasons for this are the reduced amount of control the business has over certain activities and the costs involved. Yet outsourcing certain actions can be far more cost-effective in the long run, and cheaper than hiring someone to do certain jobs. Customer support is essential, especially for retention rates, so investing in a 24/7 service allows customers and clients to get in touch whenever and have their queries answered.

Invest in Security

All businesses require high levels of security to keep their assets secure. For online companies this is even more important, as they will hold a lot of data gathered online about customers, from financial details to personal information. Advanced testing of networks can be used to highlight any risks and vulnerabilities in your security, so they can be amended to avoid a dangerous and costly attack. Again, there is a cost involved but it can far outweigh the financial implications of dealing with a security and data breach.

Automate Some Processes

A lot of the work required for complimenting your online business can be automated. This saves time you can use towards furthering your business, as well as the money you’d otherwise have to pay someone to do that particular job. Email marketing and social media posts are two of the main aspects which can be automated, with analysis software a useful investment to track how impactful they are and what can be done to improve.

Plan Efficiently

Set clear goals for your online business, both in terms of growth and finance. Good preparation and planning will mean less time (and therefore money) is wasted on more trivial aspects or going round in circles. Splitting up your finances to cover all essentials with some leftover in case of an emergency is vital. Don’t be afraid to ask for expert advice either.

Saving money as your online business goes along can help you meet any growth and financial targets.

February 12, 2018 at 9:15 AM Leave a comment

Things Your Insurance Broker Might Be Hiding From You

There is a secret world going on behind the walls of your insurance broker’s office. They are getting the perks and benefits of that world, but who is losing? Likely the people buying insurance from them. Typically, brokers aren’t choosing their insurance company based on the best price or even the best service. They are making their choice based on the many luxurious paybacks they may be getting. The dirtiest secret in the life insurance business is that it isn’t about who is providing the best client service – it is about who is holding the best conference getaways, incentives, and best entertaining the brokers to get them on board.

At a time when low-interest rates have squeezed almost every last dime out of the insurance industry, life insurance executives know that to make money they must delve it out in the right places. If they can’t keep executives happy, there is really very little loyalty. This means brokers have no problem hopping ship to the competition.

It isn’t just about keeping the executives happy, either – “seminars” and trade shows are all about making both marital partners happy. That is almost doubling the costs, and guess who is picking up the tab? Not the brokers – they are cashing in and going on trips around the world on their client’s dime.

According to investigative results leaked by the Globe and Mail, Canada’s insurance company industry has very little transparency about their pricing, products, or their competition within the industry. Even though there has been a massive push to stop the extracurricular perks that come at the expense of unwitting insurance buyers, little has changed; things are still rolling along much as they did in the past. The average consumer has little to no knowledge about how their money is being spent or how they are losing out while their brokers are living high on the hog and making critical choices about the consumer’s future.

Life insurance brokers have begun handing their clients affidavits that insist they are recommending the best insurance policy in the industry to suit the client’s needs. In reality, though, there is no one keeping tabs to make sure that the forms are real or are anything but a formality to give clients a false sense of protection against fraud. The papers being given usually do not reflect what is really going on in the industry, and is no guarantee that the insurance industry makes any real promise to find the best product for their customer’s wants or needs.

What the Globe and Mail found was that most brokers are not scouring the many options and investigating products, negotiating prices or trying to find the most competitive for those they represent. Most of them are checking out the companies to find out who will give them an all-expenses-paid trip to Asia or send them to a conference in an exotic locale in order to gain their business. What they also found is that smaller, less expensive insurers aren’t able to hold their own because they can’t offer those perks while trying to keep costs low. That type of practice is making those who try to play fair all but extinct in the life Winnipeg insurance industry.

Insurers who are trying to extinguish the practice are finding that going on the straight and narrow is being met with fewer brokers and bankrolls. Unless everyone is on board, then there is no way for the insurers to create change. All that those trying to do the right thing are going to do is to take themselves out of the market.

Up to 70% of the billions of dollars’ worth of life insurance policies are sold through independent insurance brokers, so this trend is not likely to change anytime soon. It Is hard to stop a tidal wave. But if clients catch on to this hidden secret, they might start to voice the demand for more transparency and change in the industry. After all, no consumer wants to foot the bill for their broker’s trips when the average agent is already raking in as much as $100,000 a year. If just one major insurer sticks with the practice, then the market won’t change. Ending the practice will be difficult – if not impossible.

February 7, 2018 at 3:42 PM Leave a comment

How To Put Your Best Foot Forward When Applying For A Credit Card

Applying for a credit card is a lot like interviewing for a job. It’s not just about how you look on paper, but also about the impression of reliability and professionalism you project. At the end of the day, the credit card company is looking for someone to establish a working relationship with. Thus, as with any relationship, all you need to do is show them that you can be trusted.

Putting your best foot forward can be hard, especially when your credentials don’t look too hot. How do you go about gaining the trust of someone who only knows you as numbers on a piece of paper? Well, the following guide endeavors to answer this question.

#1 – Know Your Credit

Information is power! Doing your research before applying for a credit card can give you an edge. If you understand, in detail, what credit card companies are going to see when they check your credit, then you can act accordingly.

Whether it’s trying to remove a quick debt, settling an inquiry, or resolving a past-due balance, understanding what’s keeping your credit from thriving can help you improve it. What’s more, different cards have different caveats and standards, so by knowing where your credit shines and where it dims, you can apply for the cards that will work best for you.

The bottom line is that if you don’t know what you’re working with, you’re not going to know how to help yourself. Get a grip on your credit and direct your efforts down the avenues where you have the best chance to succeed.

#2 – Include All Of Your Income On The Application

Whenever a credit card company runs a credit check, they’re getting very specific information. Sometimes this information can seem very comprehensive, but it can also exclude some very relevant information. For instance, when a credit card company checks your credit, they probably won’t see your total monthly income.

This incredibly significant information isn’t included in a credit check, perhaps to your advantage or your detriment. Credit card companies are interested in what is known as your “Debt To Income Ratio.” This tells creditors how much you make versus how much you owe, and gives them an impression of your ability to pay off the card.

Most of what keeps people’s credit scores down is their total debt. So if you’re able to show the credit card company you make more than enough to meet your debt and the card payments, then you’re in the clear.

#3 – Do The Math On Your Credit Utilization

This gets back to the point made at the top of the list: information is key. Your “Credit Utilization” is the dollar amount of credit the credit bureau believes you can be trusted to handle. Depending on your credit score, that dollar amount will ebb and flow accordingly. Understanding how much of this you’re already using and how much you have left to use will help you put your best foot forward when applying for a credit card.

So for example, if you’re applying for a card with a $1000 limit, then you need to have at least $1000 available in your credit utilization evaluation. What’s more, most credit card companies won’t accept you if you’re using more than 30% of your credit utilization. So truthfully, if you were applying for a card with a $1000 max, you’d need to have 70% of your utilization available regardless of the dollar amount.

What it comes down to is that credit card companies want to feel confident in your fiscal responsibility as well as your capacity to pay. It’s not just about having the money; it’s about having a proven track record of trustworthiness.

Conclusion

All in all, credit card companies are in the business of making money for themselves. As such, they’re only going to invest in people that they think can help them profit. Being able to prove yourself as reliable and capable can go a long way towards getting approval.

Keeping a finger on the pulse of your credit score will help you know what avenues to pursue. Listing your full income will demonstrate to creditors your capacity to pay. Ensuring that your credit utilization is under 30% will show the credit card companies that you have a lot of wiggle room to handle their payments. All of these tips will help you make an impact on creditors, and hopefully get you that piece of plastic we all crave.

February 7, 2018 at 3:41 PM Leave a comment

Top Tips for Frugal Financing

Are you looking for ways to save more money? Or being able to pay your bills without the stress or worry of where the cash is coming from? Having financial freedom is most people’s dream but achieving it isn’t always easy for everyone. Being frugal with your finances is about being smart with your cash, making your budget go further and avoiding being in debt so you form a relationship with your money, and here’s some ways to help you achieve these key elements.

Do you really need it?

We’re all a bit guilty of spontaneously buying something that perhaps we don’t actually need but really want and there are many reasons why we impulse buy. To help us refrain from buying unnecessary items, ask yourself if you actually need it before you purchase something. Learning to differentiate between wanting and needing something will help to get into the habit of questioning your spending and go towards improving your savings account. Think about this next time you’re buying that coffee or upgrading your cell phone!

Check your credit reports

At least once a year you should check your credit score to ensure the information they have is correct. Your credit report is used to calculate loan rates so keeping an eye on it and finding ways to improve your score can help to save money in the long run. Look out for deals such as a credit card which uses a security deposit which is a great option for building up your credit and you can also earn cash back rewards too. Always look out for credit fraud and mistakes that can affect your credit score, and make sure you pay any bills or loans off as a way of gaining a higher score.

Always compare prices

If you do have to spend your hard-earned cash on things you need then make sure you shop around for the best prices. This might not always apply to smaller items but it will certainly make a difference to larger, more expensive goods. Compare different pricing in stores and learn some tricks for online shopping to make your money go further. While you’re online look out for discount codes or how to earn rewards while you spend and use comparison websites to make it easier.

Being frugal with your finances doesn’t mean you’re signing your life away to being doomed but by making small sacrifices and thinking about how to spend can lead to being able to afford the life you want.

February 5, 2018 at 8:08 PM Leave a comment

The Rent vs. Own Debate May Not Go The Way You Expect

Home ownership is one of the more common financial goals of most people. And while it is usually the best financial option, there are other reasons why renting may be the better option.

Examining the choice between ownership and renting can be very complicated and lead to a lot of frustration. The result may be that you just don’t know what is best.

Like any big decision, this is one that requires you to think about all the different aspects of what it will mean for you financially and in terms of your daily life. Consider these points…

Upkeep

Most of the time, people underestimate the costs of owning a home. They think about a mortgage, property taxes, and insurance, and from there, they largely assume that the overhead is basically the same as when they rent.

However, this is not entirely accurate. Many of the costs of maintaining a home are disguised in rent, invisible to the tenants who may not even realize the expenditures are being made. Services like the pest control Denver Colorado apartment complexes need are covered by rent, as are repairs, maintenance, grounds upkeep, parking lot care, and much more. If the actual cost of the building were the only cost charged to the tenant as rent, there would have to be many other surcharges added on.

Independence

Many people feel that home ownership is a sure-fire way to keep from having other people interfere with your life. And certainly, life in an apartment or a rental property can be full of restrictions imposed by management, owners, and even city codes.

But is your own home that much different? The highest values for homes are often found in neighborhoods with deed restrictions, homeowners’ associations, and other mechanisms for controlling what takes place in the neighborhood. And your technology can leave you at the mercy of your ISP.

That’s not to say you’re entirely at the mercy of a homeowners’ association or other authority. You can certainly paint your bedroom whatever color you choose, and you will at least have fewer noise complaints than you would from people in adjoining apartments. But don’t get the idea that your autonomy is complete when you own a home.

Financial Power

Many lenders advertise their low-rate mortgages as an opportunity to stop paying for somebody else’s property and start paying for your own. And it is true that any equity you build with a mortgage is yours, and that rent payments don’t build you any equity at all.

But there is a dollar figure that can be attached to freedom. Why do you think so many businesses operate in spaces that they lease? It’s because they are able to walk away with a finite time horizon at any time. If they find a better site, they can count the days until they can move to it. No worrying about getting the old place sold. They just exit per the terms of their lease and go on.

If your job, education, or family situation is such that you may need to move on short notice, owning a home can be a real burden. It can be very difficult financially to pay for a home in the new location when you’re still making payments at the old location because you haven’t been able to sell it yet.

For the standard, cookie-cutter life of a couple with 2.5 kids and a dog, working at the jobs they’ll retire from and living just a stone’s throw from family, buying a house will indeed always be a good option. But as soon as any of countless factors start to influence their situation—career transfers, pursuit of advanced degrees, ailing parents, and many more—the option of renting and having some freedom can be very appealing. As you weigh your options, see if the cookie of your life fits the cutter or if you’re something different.

February 2, 2018 at 1:55 PM Leave a comment

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