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What To Do When You Miss a Paycheck

miss a paycheck

You’ve finally got a handle on your budgeting and then the unexpected happens… your paycheck is late.

If the thought is already sending you into a downward spiral, hold up. Yes, missing a paycheck is a less than ideal situation, but you need to have an action plan in place before it happens.

Don’t feel like you have to take out a personal loan or grab your credit card. Go through the following steps first to see what makes sense for your individual situation.

Dance Around Your House

No really. If you’re not a dancer (but c’mon we know you can move it move it) choose another little activity that will dissipate any nasty emotions.

When you panic, you might make a knee-jerk reaction you’ll regret. Yes, you need money to survive, but if you do something like yelling at your employer or borrow money with a high-interest loan, you may be dealing with those consequences years down the line.

Instead, take a few deep breaths and try to relax. The goal is to look at your situation objectively. Once you feel more in control, move onto the next step.

Look at Your Bank Accounts

Seeing where you stand financially will help you set a plan. No matter how you feel (you got this!), looking at the numbers gives you an objective picture of what is going on.

  • Look at all your bills (including debt) and see what you owe and their due date
  • Look at how much money you have in your checking and savings accounts

Once you have those numbers,  you can create an emergency budget to get you through the red.

Tap Into Your Emergency Fund

If you have savings set aside for emergencies, now’s the time to use it. That being said, it’s still a good idea to cut your budget down to the bare necessities just in case. When you start receiving paychecks again, then you can factor in a line item on your budget to replenish your emergency fund.

For those who don’t have emergency funds, now’s not the time to feel shame around it. Take this as a reminder that an emergency fund is there to help you when times are tough. Once your situation is back to normal and you’re receiving a regular paycheck, consider setting aside money in case an emergency fund happens.

As for how much to aim for, most experts agree that $1,000 is a good amount to strive for. Once you’ve reached that milestone, then aim for more — three to six months of your expenses. Charlie can help you set one up.

Make Sure The Necessities Are Taken Care Of

Now is the time to focus on the essentials, literally. Right now, your essentials are shelter, food, utilities, and transportation AKAthe items you need to ensure you still have a place to live and food on the table. If your last resort is eating at home with your parents for a week, you do what you gotta do.

The last step had you list out all of your bills and debt. Go ahead and include expenses and list them in order of importance. Once you have that, look at your emergency budget to see if you’ve allocated money towards the essentials. If not, adjust your budget accordingly.

Let’s say you have $500 in your checking account. Take a good, hard look at what you need to purchase until the next paycheck comes in.. For example, you tend to buy groceries once a month, but you notice that your pantry is pretty well stocked. Can you get creative and make meals based on what you already have? Or can you buy sale-only grocery items?

Slash and Burn Unnecessary Items

Remember — this is temporary. Once your paycheck arrives you can get your subscription services back if it makes sense. It sucks to think about giving up on things like Netflix and meal delivery kits. However, cutting back will help provide some relief when money is tight.

f there are services you can suspend or cancel temporarily, great. If canceling them means paying a hefty fine (like many cable subscription packages), see if you can negotiate with the company to see if there’s anything they can do. Charlie can help you with that! Just say “Help me cut my bills” and he’ll lead the way.

Same goes for any necessary expenses. Call up your mortgage or insurance provider and explain your situation. Some companies —  though not all — may help provide some relief by allowing you to defer your payments.

Sell Your Stuff

If cash is really tight, consider selling some of your unwanted items. Go through all your goods to see what you can sell — think baby clothes, designer items, books, CDs and even jewelry. There are plenty of resale or consignment stores that will take those items off your hands and pay you cash right away.

You can also consider selling your time and skills, like offering to mow your neighbors’ lawns, walk some dogs, or tutor kids in the evenings. There are tons of ways to put a few extra dollars in your pockets. Get creative and you may be surprised and what you’d find!

Talk to Your Employer

It varies from state to state, but most employers in the U.S. are required to disclose when and how you’ll get paid. Now’s the time to approach your employer to ask what’s going on and when you can expect to receive your next pay. You may also want to contact your state labor agency to find out about your rights. This way, you can keep updated on what’s going on and it might provide some relief.

If you do miss a paycheck, remember that it’s not the end of the world. Breathe, try to relax and look at your financial situation objectively. There are solutions. And if you need to ask for help from friends, family or in the form of a loan, so be it.

You’ve got this.

by Sarah Li Cain

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Preparing as a Homeowner for Those Inevitable Major Repairs

home repair can be expensive if the homeowner doesn't know what to look for
Photo Credit: Pexels

It’s not pleasant to think about as a homeowner, but major repairs are inevitable. Whether it’s a pipe bursting, a crack spreading in the foundation, or a broken water heater, repairs come with owning a home. Even though they are often unexpected, such repairs are more manageable when you’ve prepared. From regularly upkeeping your home to choosing the right contractor and paying for the repairs, this article is here to help you get ready for when things break.

Upkeep

One of the best ways to keep your home up to par and save money in the long run is to perform regular maintenance. While it’s difficult to remember all the tasks that need to be done monthly, every six months, and annually, these tasks are essential to keeping your home in shape:

  • Inspect the exterior each year for cracks in the driveway and foundation, loose or broken shingles on the roof, wear on the chimney, and so on.
  • Clean the gutters twice a year to maintain the stability of your foundation and roof.
  • Have your HVAC system checked twice a year. In between checkups, learn more about how you can perform simple maintenance yourself, such as changing your filters regularly (you can even sign up for a filter subscription to help you remember). The more you can do yourself, the less chance you’ll have of encountering a very costly repair.
  • Check your plumbing frequently by looking for signs of leaks under the sinks and on the ceiling, and make sure all your faucets are functioning properly.
  • Clean your chimney periodically and have it inspected once a year.

One of the easiest maintenance tasks to forget is changing your air filters. However, this is something that helps keep your home a clean environment — especially if there is major repair work being done that fills the air with dust. There are many different sizes of filters, and you can look into custom air filters if you’re having trouble finding the right ones for your home.

Finding a Contractor

Another important part of home repair is choosing the right contractor for each job. It can save a lot of time and money to prepare building plans and materials before you interview your candidates. Ask friends and neighbors for recommendations of qualified and trusted contractors, and interview a few different contractors who have experience in the job that needs doing. You should also check each candidate’s state contractor’s license and certificate of insurance, and then get an estimate from each candidate to compare prices. Once you choose a contractor, it’s important to set up a payment plan and acquire a written contract.

Paying for Repairs

Now for the most dreaded aspect of major home repair: figuring out how to pay for everything. Nonetheless, having a plan for covering the costs can significantly reduce the stress of unexpected repairs. Perhaps the most effective way to prepare is by creating an emergency repair fund. Essentially a personal savings fund, this is something you manage yourself. It helps you to have money set aside for when your roof is caving in or when your basement floods, and it keeps you from having to rely on high-interest credit cards.

Typically, it’s good practice to begin your fund by contributing 10 percent of your mortgage payment each month. That is, if your mortgage is $950 per month, you would set aside $95 for future repairs. Even if your emergency repair fund isn’t built up when you need it, the goal is still to avoid debt. In that case, you may want to consider asking friends and family to borrow money, and if that isn’t an option, look into applying for a personal loan at a decent interest rate.

Inevitable major repairs come with owning a home, and having a plan will help keep you from becoming overwhelmed. Be sure to do regular maintenance, stay diligent in choosing a contractor, and start building an emergency repair fund ASAP. You may not be fully prepared for an emergency repair, but you’ll be surprised by how much even a little preparation can help.

by Jillian

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Think You’re Ready To Buy a House? Here’s 4 Signs.

home rent

“Am I ready to buy a house, or should I just keep renting?”

It’s one of the questions that we hear most often and something to which first-time homebuyers often spend months, if not years, trying to figure out the answer.

Below are a list of four tell-tale signs that you’re ready to bite the bullet and take the leap into homeownership:

Sign #1: You’re ready to settle down

The first sign that you’re in the right mindset to become a homeowner is that you’re ready to stay put — at least for a little while.

rental home

Conventional wisdom states that in order for your purchase to make financial sense, you’ll want to plan on staying put for at least the next five years. When you sit down to think about house hunting, you’ll want to use that timeframe as your reference point.

Ask yourself the following questions:

  • Can you see yourself staying at your job for that long, or will you be looking for new opportunities?
  • If the right position came along, would you be willing to move for it?
  • Do you like the area you’re living in, or would you like to explore other options?
  • Do you see your living situation changing soon?
  • Are you planning on moving in with a significant other or expanding your family?

If these questions make you squirmy, the idea of looking five years into the future still feels a little too far ahead for you to grasp, or you still want to see where life takes you, you may want to consider renting for a bit longer or thinking about a for-a-few-years home vs. a forever home.

2. You’re done living paycheck-to-paycheck

leasing a home

Let’s face it, becoming a homeowner is expensive.

Not only is there a monthly mortgage payment to consider, which will likely be more than your current rent check, but prospective homebuyers need to be prepared to come up with a sizable down payment, shoulder a portion of the closing costs, and have the dough to take care of any necessary repairs.

Luckily, there is a way that you can prepare for the added financial pressure before the big day comes and understand how much house you can afford. Use a mortgage calculator to estimate what a monthly payment could base on the type of home you’re looking to buy. Then, subtract the amount you pay in rent each month, and aim to put the remainder into savings.

Start by working towards a down payment that could be worth 3%-10% of a home’s sale price, and then move onto a separate emergency fund.

3. You’re ready for more responsibility

home renter

Once you find a home and actually buy it, that’s really where all the fun begins.

Yes, owning a home means that you have a lot more freedom to improve the property as you see fit — whether that means putting in an entirely new kitchen or redoing the hardwood floors.

However, in addition to that creative freedom comes an added layer of responsibility. As the homeowner, you’re the one who is responsible for any necessary maintenance and upkeep on the property.

Think about what you’re like as a tenant now.

Are you willing to roll up your sleeves and help with small tasks or are you relieved to know that you have someone to call? If you’re less handy, you may want to take some time to familiarize yourself with common home maintenance tasks before committing to buying anything. It always helps to have a fair idea of what you’re getting into.

4. You know what you’re looking for

renter on vacation

Last but not least, though it may sound self-explanatory, when you’re trying to determine whether or not you’re ready to buy a home, it’s useful to have an idea of what you’re looking for.

You don’t have to have every single detail set in stone. (In fact, it’s preferable if you leave some room to flexibility in your home search.) That said, though, having a basic set of parameters in mind will make the homebuying process go much easier.

Here, you’ll want to think about the most important factors that you absolutely must have in a home. These will be the things that you would not feel comfortable buying a home without. This may include details like your preferred location, an ideal number of bedrooms and bathrooms, a target sale price, or any specific must-have features like that perfect picture window view.

If you have a strong idea of your must-haves and can’t see that changing in the near future, and the above signs sound like you, you may just be ready to take the plunge into home ownership. If not, there’s no shame in the game waiting.

 

This article originally appeared on OpenListings.

 

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The Basics of FHA 203k Loans

There are certain qualities we look for in a home: the neighborhood, the accessibility, the overall feel of the place, or maybe its potential. Sometimes, we find what we look for in a property that needs a little work — a bit of fixing here and there to make it more conducive for living.

And then we find ourselves wanting to buy a fixer-upper.

203k loan

FHA 203k loan: What is it?

Fixer-uppers can be a good idea. With a few minor upgrades, the home can be revived to its former glory, which consequently increases its market value. However, mortgage lenders are not very eager about shelling out money for a house that needs repairs. That’s where the FHA 203k loans come in.

The government insures FHA 203k loans. For this reason, home mortgage lenders consider a fixer-upper home they would have otherwise rejected. As long as the property meets certain livability standards, the 203k will provide the finances for both the purchase and necessary improvements. That’s basically two transactions in a single loan.

The FHA rehab home loan is not only for those who wish to acquire a fixer-upper, it’s also for families who aspire to refinance their current home and perform needed renovations.

FHA 203k Requirements

Since the FHA 203k loan is a sub-type of the FHA loan, it adheres to the same less stringent standards for qualification. The loan allows credit scores as low as 580, and only demands a 3.5% down payment, based on the purchase price plus the total cost of the project. A 43% debt-to-income ratio is also required. This means that 43% of the borrower’s gross earnings should be able to cover the mortgage payments and all other debts.

What repairs can be made?fha home renovation loan program

There are 2 types of the FHA rehab home loan, depending on the degree of work involved.

The 203k streamline covers relatively minor facelifts like bathroom and kitchen remodeling, change of flooring, painting jobs, appliance replacement, roof-work, and many more, as long as they do not alter the structure of the home.

The 203k standard, on the other hand, lets the borrower do any desired improvements and upgrades, except the addition of luxury amenities like tennis courts and swimming pools.

How to apply?

The process of applying for a 203k loan is almost similar to that of a regular FHA loan, but it would entail plenty of work after the loan is approved.

First, a decision should be made on which repairs are essential and what issues need to be addressed. Next is finding a licensed and insured contractor who would do the job and make accurate bids. The final bid is submitted by the lender to the appraiser, who determines the loan amount based on the future value of the property. When all the mandatory paper works are completed, the loan can be closed.

Is it for you?

If you are willing to rise up to the challenge, which includes the amount of paperwork that needs to be in compliance, the longer waiting time for loan approval, and the effort it takes to look for and negotiate with contractors, then the FHA rehab home loan might be for you. Who knows? That fixer-upper could be a diamond in the rough.


by nico2me

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Finding That Perfect Place: A Home-Buying Guide for Seniors

Finding the right retirement homeBuying a home in today’s market can seem intimidating, but it doesn’t need to be. With the right amount of research, planning, and some professional assistance, you can make the process much easier. Here is what you need to know when buying a home as a senior.

Find the Right Home

When looking for the perfect home for retirement, there are many things you need to consider. You should look for areas that have affordable housing, low levels of taxation, and whatever personal aspects that will make you happy. That could mean being in the vicinity to a beach, having access to good health care, or being close to family. Don’t forget to check on the crime rates, cost of living overall, and access to the leisure activities of your choice. Remember, this is the perfect time to indulge in all the things you have wanted to do but have been too busy to manage. However, make sure whatever it is you’re seeking is well within your price range.

Plan Your Finances

There is much to consider financially before making an offer on a home, including how much house you can realistically afford. You shouldn’t pay more than 30 percent of your total income on any mortgage, should you have a mortgage. Base the home’s price range on your annual income while also thinking of your monthly spending. Take into account that, on average, you will need to put down 20 percent of the total cost as a down payment.

Most mortgages are 30-year loans with roughly 4 percent APR, but there are other options. Depending on the size of your down payment, you may opt for a shorter loan. There are online calculators that can help you determine your specific affordability. Make certain that, whatever you do, you shop around before deciding on a loan. You may love your bank, but another institution may give a better interest rate. After all, you do not want to be encumbered with a large amount of debt while on a limited income.

The Professionals

If you feel stuck or overwhelmed by the starting process, don’t hesitate to reach out to a mortgage broker. They can be invaluable in helping you decide what you can afford, what sort of costs you can expect overall, and the best type of loan for your situation. If you need assistance with the actual moving process, there are people available to help. Especially if you’re downsizing, a professional organizer may prove invaluable. They can help you not only sort through your household items and pack but also decide what you can let go of.

Needless to say, if you don’t have any friends or family that own a large truck, hiring movers may be the best option. Ask your friends whom they have used, research each company’s reputation, and get multiple estimates to find a good price. At the very least, ascertain whether they are insured or not and if they have a license.

Moving Day

To have an easy moving day, ensure that your valuables and personal data are secured and travel only with you. Have things packed and ready to go beforehand, and in boxes that are clearly labeled. The last thing you will want to do after a long move is search for every item you need. By labeling clearly, you can make sure each box goes into the correct room of your new home to make unpacking easier. Stay hydrated and well-fed during the day itself. This will help keep your energy levels up and moods high. Despite the excitement and anxiety associated with a move, do try to get a good night of sleep beforehand. Being well-rested will make everything easier, give you more energy, and help you focus throughout the day.

Moving can be stressful, but also cathartic. Find your perfect retirement house, prepare for your move, and get there smoothly by following these easy tips. This is your time to live your best life, after all. Retirement is the perfect opportunity to experience all that life has to offer.

 

 

Image Courtesy of Pixabay.com