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How to Prepare for a Job Interview

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Learning how to prepare for a job interview can be a tough challenge. We are here to give you some professional and hands-on advice for you! #careeradvice #lifeadvice #selfimprovementInterviewing for a job is one of my least favorite things in the world. My two best friends, including Andrew, love though. One thing that helped me get over the anxiety was learning how to prepare for a job interview.

Typically, preparing for anything will help you get over your nerves a lot more quickly. I found this to also be true when preparing for a job interview. Preparing will give you more confidence entering the room.

Today we will go over how to prepare for a job interview. Hopefully, this will lead you to hear the words you want to, “You are hired!”

1. Learn as Much as You Can About the Company

Okay, you just got off the phone with the hiring manager for a position you are very excited about. They have asked you to come in for an interview and you two have agreed on a date. What next?

It is time to pull out your computer to research more about the company. It is okay to sign up for newsletters, follow the various company social media accounts, and read through external news about the company.

Your goal is to find things you relate with from the company. Your relations can be with the company’s core values, the leadership team, collaborations the company has, or even as casual as company gatherings.

Lastly, it is good to know who the competitors are within the industry. This can give the impression you are well versed in the profession.

Being very prepared will display a passion for the profession as well as how excited you are for the opportunity.

2. Research the Interviewers

This one is a little creepy but the people interviewing you are doing the same thing back at you. Especially with your LinkedIn profile.

When the hiring manager calls to set up the initial meeting, do not be afraid to ask about who will be interviewing you. With this new information, it is time to stalk these people a little. Check out their LinkedIn profile. Do they have a bio on the company website?

Try looking for information that you can relate to, to talk about during the interview. Are they fellow alumni of your college? Using LinkedIn’s alumni networks, do you have any mutual friends with one of the interviewers? Having something in common or knowing someone might just be the edge you need to get the job. Knowing the same person as the interviewer who can make a recommendation is a HUGE win.

3. Dress Professionally

This is simple. Please dress appropriately for the job interview. Do not show up in gym shorts and a tank. I did not even do that for my interview with Dick’s Sporting Goods where athletic gear was the dress code.

Having a professional look will give the interviewers the impression that you are serious about the job. If you walk into the room wearing casual, you will give the opposite impression you want to give.

Picking out the proper dress level can be like walking a tight rope though. Overdressing for an interview might also have a negative impact on the interviewers. A common rule is to dress a level or two above the normal dress attire of the workplace. You will hopefully be able to figure out what level of dress you need to be based on the research you do into the company.

When in doubt, just ask the hiring manager.

4. Clean up Your Social Media

We live in a digital world where we as a society provide WAY too much information about ourselves on. Your resume and cover letter are your first impression. In most cases now, your social media is now your second impression as most hiring managers will look through your LinkedIn and other social media profiles.

Make sure you clean up these profiles and timelines to display an image you want to show.

Really, you should be doing this before you start applying for jobs.

5. Be Respectful

This one, to me, seems like common sense but sadly it is not. As someone who also has been a hiring manager, I have seen some very disrespectful interviewees.

Be sure to be respectful and polite with everyone you encounter from the receptionist to the CEO. If you are rude or condescending, you better believe your actions will be reported to the hiring manager. Who would want to introduce someone like that to the culture of the office?

Another note to remember, be kind when talking about existing business processes or infrastructures. Never be condescending about them. If asked how you would improve something, be kind about the way you would go about it. During one interview I hosted, we had someone that was very condescending about some systems architecture. His approach was very negative and off-putting. This was not the type of energy we wanted to introduce into the office.

Also, his critique might have been valid at a large company but not for one our size. So it showed a lack of knowledge compared to other candidates.

Interviewing for a job is one of my least favorite things in the world. My two best friends, including Andrew, love though. One thing that helped me get over the anxiety was learning how to prepare for a job interview. Typically, preparing for anything will help you get over your nerves a lot more quickly. I found this to also be true when preparing for a job interview. Preparing will give you more confidence entering the room. Today we will go over how to prepare for a job interview. Hopefully, this will lead you to hear the words you want to, "You are hired!" #lifeadvice #career #jobinterview

6. Turn Off Your Cell Phone

This is “How to Prepare for a Job Interview” 101. Turn off your phone for the interview. Even on vibrate, the notifications that come in during the interview can easily throw you off while trying to answer a question.

Don’t worry, everything can wait an hour or two until you are done with the interview. Fidgeting with your phone during the interview will most likely get you disqualified instantly.

If you need something to do while you wait to be called into the meeting room, reread your resume. Maybe you can practice your responses some more. If they are not too busy, you can talk with the receptionist at the front to learn more about the company. Or read a magazine.

7. Arrive Early

I grew up in a rural part of the Midwest in the United States. Here if you are not at your destination 15-minutes early, you are late. Anytime you have an interview you should obey the rules of my small-town Iowa roots.

Arriving late or even in a rush will show the interviewer that you do not care about the job. Who is going to hire and pay someone who appears to not care?

It’s okay to arrive at your destination super early. Better safe than sorry. Just hang out in the car till 15-minutes before your scheduled interview time. Take this time to get your fix in with your phone.

If you are one of those people that always shows up 15-30 minutes late than you better plan to leave 30-45 minutes earlier than normal.

8. Display You Are Serious About The Position

We have already mentioned this several times above so you should have started to understand that it is important to display you are serious about the position. This starts with arriving early and showing respect to anyone you interact with at the company you are interviewing with.

Next, you need to show that you are serious about the profession. Be ready with examples of awards, successes, and how you championed projects in the past. Having these examples ready will display your passion and willingness to grow for the job.

It’s okay to still bring some printed resumes (yes, even in this digital world just be sure to use quality paper) and a portfolio to the interview. Most people lose track of time and forget to print things out beforehand. You being ready will give you the opportunity to show how prepared you are for the interview and how serious you are.

9. Finally, Visualize Your Success!

Visualizing your success is a key piece on how to prepare for a job interview. This is the time to take a deep breath and visualize yourself introducing yourself to the hiring manager as well as other interviewers. Practice how you will introduce yourself and answer some test questions. What will be your questions for them?

It is okay to grab a friend or partner to practice some questions with. The more prepared you are, the better you will be. The more confident you will be!

Once done, put everything down and go relax. Make sure to get eight hours of sleep the night before.

Concluding How to Prepare for a Job Interview

As I mentioned at the beginning, I HATE interviews. My anxiety levels hit the ceiling the moment I set up an interview with a company I am very excited about. That is why I wanted to write this article because I know I am not alone. Hopefully, you find these tips helpful and calming. I know my nerves have even calmed down a bit.

Being well prepared will help you succeed in any interview. Even if you don’t get the job, every interview opportunity is great practice for the next one. After every interview, be sure to write down some notes about the successes as well as the failures. You need to learn from the mistakes made so you can better yourself for the next interview.

Good luck to those with an interview coming up soon!

 

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How to Choose the Right Home Insurance?

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Like many, your home is the most valuable asset. It is something you build over your life with love, time, and energy. Once constructed, the primary concern is its safety from weather damage, fire, structural wear, tear, etc.  The first thought that pops up in my mind is home insurance. However, choosing the right home insurance may sound easy, but it’s not. There are several factors that you need to take into account before choosing the suitable one.Like many, your home is the most valuable asset. It is something you build over your life with love, time, and energy. Once constructed, the primary concern is its safety from weather damage, fire, structural wear, tear, etc. 

The first thought that pops up in my mind is home insurance. However, choosing the right home insurance may sound easy, but it’s not. There are several factors that you need to take into account before choosing the suitable one.

You need to evaluate the risks, where you live, compare rates, analyze the claim process and consider customer service. These are some primary objectives you need to think of. 

However, the following are some of the steps you can take in choosing the right option.

What does the insurance cover?

  • The first step is to understand what the insurance covers. Which claims it entertains, and which scenarios it covers.
  • Any home insurance typically covers dwelling coverage, which covers structural damages to your house.
  • Miscellaneous structure coverage covers the outer side of the house like fences, sheds, guest houses, and any other structure on the property.
  • Additional living expenses cover your costs on hotel stays and meals when your house is unlivable and under repair.
  • There’s liability coverage in which insurance covers the medical cost and other expenses if a visitor gets hurt/injured on your property.
  • Lastly, there is building code coverage, which covers the cost of repair in the event of damages incurred by a covered peril.

One thing you need to know is that the policy must cover and protect you against most or all of the universal perils. These perils can cause damage to your house. It includes fires, floods, or any damage by cold weather.

Also, you can add customary perils in the insurance, which will cost you extra, but the insurance will reimburse the remaining expenses. 

Besides, there are some policies that will not cover less frequent perils like wildfires and thunderstorms if your area is prone to such incidents. It also affects coverage of the damage caused by natural disasters. In these scenarios, insurance holders will pay more than a claim before reimbursement.

Choosing the reimbursement form

This step determines what reimbursement method you prefer in case of damages. The reimbursement arrangement varies from paying the depreciated value of the damaged area to a complete bill for the replacement.

To make it more clear, there are two types of reimbursement options: cash value and replacement cost. In a cash value policy, the insurance company reimburses the cash value of damaged items after depreciation. For example, if your old TV gets destroyed, you will receive the cash value of the old TV and not the new one.

In a replacement cost policy, insurance companies reimburse you with the repair or replace value. If your old TV gets damaged, you will receive the price of a replacement. However, such policies have conditional applications and do not cover everything.

More importantly, if you live in a porch area, where prices of houses keep increasing or have high-value fixtures, you need to consider guaranteed replacement cost coverage. This coverage extends the repairing cost limited by the policy.  

Compare and save

It’s your right and duty to compare home insurance from different providers. The cost and conditions vary very much based on circumstances. In this case, Assurance insurance quotes help people like you get the best insurance possible. Make sure whatever policy you choose covers all the necessary perils and any other additional options.

Here’s a bonus tip to save on home insurance. 

Consider getting a bundle. You can choose your home insurance along with auto insurance to receive a discounted price. While combining other insurances, the cost will come down, and you can enjoy good discounts.

Which deductibles to choose?

Insuring a home, there are two types of deductibles: dollar amount and percentage deductibles. In the dollar amount deductible, you specify the amount you will cover at the time of the claim. In percentage deductible, you set a percentage you will cover at the time of repair.

One last thing to keep in mind, the higher your deductible is, the lower your premium will be and vice versa. So choose wisely and take all considerations into account before choosing the right home insurance for you. 

Budget for Big Expenses With a Sinking Fund

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Personally, the term "sinking fund" is new to me. Because of my parents, I have known the principles behind a sinking fund for a long time. My parents used to set up a dedicated savings account and name it based on what they were saving up for. In most cases, they would save up for a new car over a few years so they could buy one without having to finance a car. Personally, the term “sinking fund” is new to me. Because of my parents, I have known the principles behind a sinking fund for a long time but the term is new to me. My parents used to set up a dedicated savings account and name it based on what they were saving up for. In most cases, they would save up for a new car over a few years so they could buy one without having to finance a car.

In a nutshell, this is what a sinking fund is but there is so much more you should know.

Culturally, I think the idea of a sinking fund has been lost in the United States. We want instant gratification. The patience to save up for a new car over a few years is hard to find. It is also so easy to finance items now! Nowadays, we can even finance buying simple items such as a new shirt from Lululemon with Afterpay or Klarna. Having easy access to financing options only reinforces the habits of impatience we have developed.

People not using a sinking fund is something I have observed over the last couple of years.

We have actually started doing the opposite. We take out a loan to pay for the item first. As a cost for instant gratification, we pay interest on that loan. To save us money, we should be saving up first, maybe even earning some interest on that savings, then purchasing the item.

What is a Sinking Fund?

As I have hinted, a sinking fund is a special savings account you set up to save up for a large purchase. We will talk about what the fund can be used for later.

The term “sinking fund” comes from the business world.

“A sinking fund is a fund containing money set aside or saved to pay off a debt or bond. A company that issues debt will need to pay that debt off in the future, and the sinking fund helps to soften the hardship of a large outlay of revenue. A sinking fund is established so the company can contribute to the fund in the years leading up to the bond’s maturity.” (Investopedia)

Difference Between a Sinking Fund and an Emergency Fund

There is one big difference between a sinking fund and an emergency fund.

As we have already learned, a sinking fund is used to help save up for a big purchase. An emergency fund can also be used for large purchases. The main difference between the two is one fund is used for planned purchases (sinking fund) and the other is used for unplanned purchases (emergency fund).

I do not want to go too deep into emergency funds because we have an article about them already. In this article, we learn they are for those unplanned expenses that life can throw at you. Some expenses that an emergency fund can be used for include:

  • Broken Appliance
  • Car Repairs
  • Job Loss

Sinking funds on the other hand are intended to help you save up for large one-time expenses.

Types of Sinking Funds

Some types of large one-time sinking funds include:

  • New appliances
  • Home Repair
  • Home Renovation
  • New car
  • Medical Expenses (Human or Pet)
  • Vacations

They can also be used for larger recurring expenses. My wife and I use our normal checking account for these expenses. We tend to keep a solid five-digit balance within our checking account on top of our emergency and sinking funds just for these recurring expenses.

  • Car Insurance
  • Car Registration Renewal
  • Christmas/Birthday Gifts
  • Summer Camp
  • Back-to-school shopping
  • Annual Subscriptions (software, streaming, etc)

Best Ways to Save for One

Starting to save for a sinking fund really is not too hard. First, you start with a dollar amount for what you want to save up for such as a $5,000 vacation. Then you figure out how long you have to save up for that vacation. Let us say 10 months for this example. We can figure out how much we need to save monthly by dividing $5,000 by 10 months. In our example, we will need to save $500 every month.

Once you know this monthly amount, you need to figure out how this will fit into your monthly budget. Our vacation sinking fund is the third in line for priority. First, we need to contribute to retirement, then our emergency fund needs to be full ($15,000 in our case), then we fulfill our monthly amount for our sinking fund. The remaining amount goes into our checking account to make sure that it is filled enough for those recurring expenses.

Lastly, you should be putting your funds into an account that will earn you interest while you save. This account can be a high-yield checking account or even a money market account. We personally keep ours in a conservative fund within Betterment. I like this option because we can set up an auto-deposit into the fund. It takes the effort to save out of the equation.

5 Tips for Success With a Sinking Fund

1. Separate

Keep your sinking fund money separate from the rest of your money. This gives that money a focused purpose. It is easy to get distracted from your goals. If your funds were in with your general pool, it would be easy to tap into it.

2. Name

Naming your fund will also help you stay focused. You can name your fund “New Furnance” or “Disney Vacation”. A name helps remind you what you are saving for.

3. Automate

When possible, automate the deposits into your fund. This helps make sure a deposit is not missed so you stay on track with your saving goal. Auto-deposit also helps eliminate the opportunity to make an excuse to not deposit this month because you want to purchase something else.

4. Windfalls

If it makes sense, deposit any extra money you might earn such as from a bonus or tax refund. This will help accelerate the saving process and get you to your goal sooner.

5. Prioritize

Some sinking funds will have a higher priority than others. Be sure to focus on those first compared to ones that might be a “want” rather than a “need”.

Conclusion

A sinking fund is a powerful but simple finance tool that can help you save up for large one-time or recurring expenses. They help you purchase items such as cars or vacations so you do not have to take on more debt.

This article is not to knock you, the reader. I am not perfect either. My wife and I financed a new vehicle we bought this past summer. We did a cost-benefit analysis and waited for a deal on the financing, 1% APR. The moral of this short story, financing sometimes does make sense. I am not here to make you feel bad if you make a well-thought-out decision to finance something.

While they take a lot of patience and focus, sinking funds can help you keep your finances in better health instead of just financing to purchase items.

If you are looking to earn more income to help you save up your sinking fund then we have a page for you! Over the years, Andrew and I have slowly been putting together a massive list of Ways to Earn Money. Check it out! You might find something you love!

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How to Save Money While Saving the Environment

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I’ve long been on the saving money bandwagon. Ever since I realized the magic of compound interest and just how much saving now can improve my financial future, it was like someone flipped a switch in my brain.I’ve long been on the saving money bandwagon. Ever since I realized the magic of compound interest and just how much saving now can improve my financial future, it was like someone flipped a switch in my brain.

However, to be very honest, it took me a bit longer to get on the environmental bandwagon. Sure, I made sure to recycle and I would never have dropped trash on the ground. But it was only when I saw an interview with someone breaking down the science of climate change around the middle of the last decade that I realized just how dire things are.

And as the saying goes: change begins at home. So my first step was to start looking around my own life to see what steps I could take in our household to make just that little bit of difference.

It wasn’t long before something quickly became apparent. Many of the same habits you can implement to save money are also the exact same things you can do to help the environment.

So whether you’re looking to make some changes in your own life to protect your wallet or protect the planet, they’re both great reasons with some really incredible outcomes for both sides of the equation.

Take a look at some of the things I’ve implemented in my own life to achieve both goals to see just which of them you could bring into your own daily habits.

1. Buy a reusable water bottle

If you’re going to make one immediate change, make it this one. Americans currently buy 50 billion bottles of water annually, which is equivalent to every person in the US using 13 plastic bottles per month. 

On that basis, if you use a reusable water bottle, you’ll be helping to save 156 plastic bottles per year on average. That’s a lot of plastic…and a lot of money that you’ll suddenly find yourself saving instead of using it to buy those 156 drinks.

2. DIY eco-friendly cleaners

Many dishes and laundry detergents contain synthetic ingredients that are harmful to aquatic life, not to mention that most come in plastic. So, instead, try using cheap ingredients to make your own aromatic cleaners. 

Bicarb soda and vinegar can clean an amazing amount of things very effectively and are also much cheaper than commercial cleaning products. And by making effective cleaners from pantry ingredients, you’ll be saving money and helping the environment.

3. Install a programmable thermostat

Replacing your old thermostat with a programmable one is an easy and cost-effective way to save money on your heating and cooling bills. You can set a programmable thermostat to change your home’s temperature based on the time of day, based on whether you’re home, and other factors. 

Also, with many programmable thermostats, you can pre-heat or cool your home using an app rather than running the air conditioner all day.

4. Eat less meat

The agricultural industry is one of the largest sources of emissions, but it’s also true that we have to eat. However, did you know that the production of meat worldwide causes twice the pollution of production of plant-based foods?

Based on this, a very simple yet effective change that your household can make is to eat less meat. Many people do this by having meatless Monday, but you can certainly expand this to other days of the week. Rice, pasta, beans, potatoes, and frozen vegetables are much cheaper than meat, especially when you buy them in bulk and store them for a long time.

(Similarly, consuming less dairy is also a good idea for both your budget and the environment!)

5. Cut the faucet

Do you brush your teeth with the water running? It wastes precious resources and your money – and is really completely unnecessary. 

Instead, wet your toothbrush, turn off the faucet, apply toothpaste, and brush for two minutes twice a day before turning the water back on to rinse. It may not seem like much, but it can really add up over your lifetime. 

6. No more paper towels

While you may be used to reaching for paper towels for a spill or to accompany each meal, there’s really no need to use these disposable paper products anymore.

A good alternative is to ose ‘utility towels’ to clean up spills instead and to have cloth napkins on hand for meals. This makes cleaning messes around the house (or around your mouth) much cheaper and more eco-friendly.

7. Cut food waste

The National Resources Defense Council estimates that up to 40% of US food is thrown away. Safe to say, this isn’t just a huge waste of money but also of resources. 

At the same time, food is often one of the three biggest expenses in most household budgets, so food waste can be a huge financial drain for anyone trying to live on a budget. To avoid food waste in your own home, an easy strategy can be to make weekly menu plans. This lets you shop smarter at the grocery store, ensuring that you buy only what you need and resulting in far less food (and financial!) waste.

8. Recycle used items

Manufacturing new clothes, furniture, and other products consume a large part of many Americans’ disposable incomes – while over 11 million tons of textiles go to landfill every year. 

So instead of only buying new items, visit your local thrift store to find used items and save resources such as energy and raw materials. You can also look into using websites for both getting new and disposing of existing clothing. Seeing how to sell on Poshmark is one great example of that.

9. Unplug switches

Even when your devices and appliances are turned off, electricity continues to flow to them. That’s right! This is actually known as “vampire energy” and it’s estimated that it accounts for 10% of household energy use.

This is why unplugging appliances when they’re not in use saves energy, which helps reduce CO2 emissions, not to mention your energy expenses.

So, after breakfast, unplug the toaster, and unplug the TV while you’re at work or sleeping. A power strip can make this one-plug process more accessible, but it doesn’t get much more manageable when saving money and the environment.

Remember that the Wi-Fi router must remain plugged in in some cases, such as a home security system or programmable thermostat.

10. Use everyday objects to repurpose

Aside from thrifting, you can reuse and repurpose items already in your home. For example, you can reuse glass jars as storage containers to hold tea bags and other items.

You can even combine this with one of the other suggestions on this list. That is, if you have a store where you can buy dried goods in bulk near you, like beans and rice, use those glass jars as a way to store these items over the long term. Not only is it cheaper, but they can look great when lined up on a shelf in your kitchen.

11. Buy long-lasting items

It may be slightly more expensive initially but, where possible, it’s often better to spend some extra money to ensure you get a product that will last a long time. This may surprise anyone looking to embrace frugal living, but making this choice will save you money and prevent more trash from entering landfills.

For example, while fast fashion can be tempting due to its low cost and the fact that pieces tend to be very similar to many in-fashion items, there’s a huge environmental cost with this. If you can, try to spend a bit more on more classic, longer-lasting pieces, to avoid the fast fashion carousel.

12. Insulate your doors and windows

A costly ecological and financial error is allowing heat to escape in the winter and cool air to escape in the summer. Fortunately, this can be easily corrected. 

Weatherstripping doors and windows is one way to help the environment while saving money on utility bills. In particular, the US Department of Energy claims that sealing an older home can save you up to 20% on heating and cooling costs. Not a bad saving for very little effort!

13. Get that garden going

A large backyard tomato, pepper, and cucumber garden could save you hundreds of dollars annually. But even if you don’t have a yard with the space for a full vegetable patch, try starting with a window box herb garden for easy access to basil for salads and cilantro for guacamole.

Growing your own herbs is definitely good for the environment and your wallet – not to mention your meals, as fresh herbs can make such a difference!

14. Use LED bulbs

Another quick fix is to replace dim light bulbs with LEDs. While it’s true that LED bulbs cost more than incandescent bulbs upfront, they also last much longer and use up to 80% less electricity. 

Specifically, doing this could save you up to $20 per bulb. If you want to see the impact of this on your own household budget, use this energy savings calculator to calculate your personal return on investment of switching to LED light bulbs.

15. Quit smoking

Smoking is not only costly, but it also pollutes waterways, soil, and wildlife. There’s also the fact that discarded still-lit cigarettes can cause property damage. 

However, the actual financial cost of smoking can be calculated using simple economics. The lifetime financial cost of smoking is estimated to be between $1.6 and $3.1 million for each smoker, which includes product costs and high healthcare costs. I don’t know about you, but I have a few better ideas of how I could use $3 million than inhaling it.

16. Change your transportation methods

Carpooling, biking, walking or public transport are excellent ways to save money on gas. The more you avoid driving, the less expensive it will be to own a car. It also reduces your carbon footprint.

In the case of biking and walking, these can also be great for your health. Not only is living longer a pretty reasonable goal to have overall, this is also good for your wallet in that it will likely result in reduced health costs over your life.

Final thoughts

There’s no question that saving money and setting yourself up for a solid financial future is definitely something we should all be doing. But doing what we can for the environment is also more critical than ever.

So if you can do both at the same time, then it’s the very definition of a win-win! 

Which of these have you implemented in your own life? And do you have any other ideas of actions that help both your wallet and the environment?

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Financial Responsibility Is Self-Care. 6 Ways to Relieve Your Financial Stress.

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Before joining Wallet Squirrel, money was a major stress point in my life. The term, "Financial Responsibility" was something I was not familiar with. I didn't know how to properly manage my own finances. I did not know how to budget.Before joining Wallet Squirrel, money was a major stress point in my life. The term, “Financial Responsibility” was something I was not familiar with. I didn’t know how to properly manage my own finances. I did not know how to budget. I came from a well-off family where I saw my parents act as they wanted it, they bought it. I learned later in life this was not true, I just didn’t see them quietly saving money on the side for two so they could buy that Lexus.

Anyways, my lack of financial responsibility and knowledge was not a good situation to be in. We were burning through our savings and slowly amassed some credit card debt.

At this moment, I was stressed. I was nervous. I was anxious. These emotions didn’t allow me to be a good husband or friend. I didn’t know what to do from here.

Enter Wallet Squirrel and the financial freedom community.

Over the last six to seven years, I have learned that actually being disciplined with money is very freeing. I no longer have any of those negative emotions revolving around money. Though we are not where I want us to be yet, I am actually very happy where we are financially. We are heading in the right direction. It is a long game.

If you are feeling the same negative emotions I did, it is your turn to take on financial responsibility for self-care. While it is challenging, it is worth every penny!

1. Set Up Goals by Budgeting

The biggest self-care item to help your wallet is to set up a budget. Some people think budgets are constraining but I think they are a tool for freedom. They tell me exactly how much I can spend and this is a relief. As long as I know I spend within the budget amounts I have set for myself, I know I am spending within my means.

Since I am tracking my spending to be within a goal, I do not have to worry about my spending. This is very freeing.

There are many tools to help track your spending. I used to use a simple spreadsheet but that takes a lot of time to upkeep. Now I prefer to use the Mint App from Intuit which helps me track my spending automatically. There is still some manual work but it is so much easier now.

2. Treat Yourself While Earning Money Back

There are too many apps that help you earn rewards back to go into today. The idea here is we need to enjoy life so you need to make sure you are earning money back for things you love.

Some ideas on how to earn money back.

  • Credit Cards – My wife and I live in Colorado. We love the outdoors. Good outdoor gear is expensive! Because of this, we use the REI credit card for our everyday purchases. Every year we typically get a $400 gift card to REI which helps us purchase our gear for the upcoming year. We do plan on switching over to a travel card though.

    Let me know down in the comments section if you have a favorite travel credit card.

  • Rewards Programs – Join a rewards program to earn a free coffee or sandwich. While not that sexy, we enjoy the rewards program through Kroger for our groceries. It helps a lot with our gas bill.
  • Subscriptions – There are some household items we purchase on a monthly basis so we have subscribed to those through Amazon. Amazon rewards you with a slightly cheaper price.
  • Annual Sales – Wait to purchase until an annual sale happens. A lot of companies have them. We take advantage of REI’s every year with our rewards. Planning to travel? Make sure you plan ahead to purchase so you can wait until an airline is having a major sale.

How do you earn money back for things you love?

3. Find Items in Your Budget You Can Cut Back On

Over the past year, my wife and I have found about ten areas on our budget where we could save money on a monthly basis.

Some of those items included:

  • Refinancing – We refinanced in the middle of 2021. Our house had increased in value by over $100k so we decided to take advantage of this unique time. By refinancing, we were able to drop the private mortgage insurance and pay off my student loans. Here are some more details about the refinance process.
  • Internet Modem – Silly me, but I did not realize you had to pay the cable company $15 a month just to use their cable modem so you can access the product you are paying them to use. What a rip-off! I learned you can use your cable modem and return the cable company’s to drop that $15 a month charge. Good cable modems are cheap and easy to set up. Here is the one I bought.
  • Cutting Subscriptions – My wife and I talked about subscriptions we were not using very much. While they were nice to have, they were not worth it as we did not use them very often. The costs of subscriptions add up very quickly. Ask yourself, do I really use this subscription?
  • Phone Bill – We decided to move over to Google Fi from the very expensive Verizon. There are many cheap options for cell service now such as Google Fi or Ryan Reynold’s Mint Mobile. So far the move has been worth it, dropping our bill by almost $70 a month.

Overall, we are saving just under $700 a month with all of the cutbacks we made. This totals up to over $8,000 a year! That is enough to take our kids to Disney World next year! Who am I kidding, that trip is for my wife and me.

4. Save Up An Emergency Fund

Emergency funds are such an amazing thing! I did not know about them until Andrew wrote about them in his My Emergency Fund article.

My wife and I do own a house that comes with a lot of items that could break. Because of this, we keep a fund the size of our largest item. What is that item? There are too many of them but we currently focus on our heater and AC units. Both are about 20 years old so if one goes, the other will need to be replaced to be most efficient. I have gotten estimates that say this replacement would be $10k to $13k so we keep $15k in our emergency fund to give some more wiggle room.

Having this money stored away removes a weight off my chest. I know this expense is coming at some point in the near future. Instead of having to worry about how we will pay for it, we already know-how.

In the meantime, we are saving up for replacing the units on our own schedule without dipping into our emergency fund.

Emergency funds are so important for financial security just in case you are laid off. The $15k we have saved up will get us through six months, with some budgeting adjustments, if my wife or I were laid off from our job.

5. Invest in Your Future

The stock market can make a lot of people nervous. That is very understandable, especially with how volatile it has been over the last two years. Buying long-term investments are not for yourself today but rather your future self. If you invest wisely, your future self will thank you greatly!

There are many ways that you can reduce this risk.

  • ETF’s – These tend to perform the way the market does. I really enjoy any ETF provided by VanGuard.
  • Large Caps with Dividends – Andrew loves to buy large-cap stocks that provide dividends. Owning a diverse group of large caps tends to be a very conservative approach. Plus they pay out dividends that can be reinvested. Once you purchase enough, the snowball effect really starts to speed up.
  • Betterment – Betterment is kind of like a digital broker. You set up an account with them, tell them how aggressive/conservative you want to be, then invest some money with them. From there they take care of everything for you. I really enjoy their process.

6. Set Up Term Life Insurance for Your Family

This financial self-care item did not click until recently. In the last few years, I have had two kids so my financial responsibility increased dramatically. Sadly, I have also had too many people close to my heart pass away. Those that left us included two cousins that were younger than me as well as my mother and best friend’s father who were both under 60. Three out of the four of these deaths were very much unexpected. The other was from a very aggressive cancer that she was diagnosed with just twelve months prior.

The moral of that sad story is we never know when we might pass on. We have plans to be here until we are 100 but those plans are very fragile.

I did not want to leave my wife without a financial security blanket. With all of the extra financial responsibility that my wife and I choose to take on I needed to leave her with something. Because of this, I decided to buy extra life insurance on top of what my work provides.

There are many philosophies as to how much life insurance you should get. My wife and I have decided to provide the other with enough life insurance to get us through three years worth of expenses (use your budget from above to figure this amount out).

Only you know your situation so I cannot recommend how much life insurance you should buy. Using the tools above, you will need to find the amount that you think is best for you and your family.

Financial Responsibility is Self-Care

Let us be honest, financial responsibility is not the most fun and glamorous thing in the world. The fact is, unless we have millions of dollars in the bank, we need to take care of our finances. If we do not, the stresses of having poor financial health will take a toll on our actual health. I can tell you from personal experience, it is 100% worth it.

What financial responsibility have you taken on as self-care?

Not happy with your current income and looking to earn some extra money? Over the years, Andrew and I have put together a massive list of ways to make money. I highly recommend you check out this list to see if anything catches your eye!

 

 

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11 Ways to Fight Price Inflation That Will Help With Rising Costs

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Price Inflation is something that has been affecting the whole world during 2021 and most likely will continue well into 2022. We thought we would take a look at how we can fight price inflation during these times. Let's be honest, these ideas are a great way to save money every day even when price inflation is not rising costs on us. One of our goals at Wallet Squirrel is to save money every day to help us reach financial independence.Price Inflation is something that has been affecting the whole world during 2021 and most likely will continue well into 2022. We thought we would take a look at how we can fight price inflation during these times.

Let’s be honest, these ideas are a great way to save money every day even when price inflation is not rising costs on us.

One of our goals at Wallet Squirrel is to save money every day to help us reach financial independence.

1. Bulk Buy to Fight Price Inflation

If you tend to buy a lot of items that are non-perishable, buying in bulk can help you fight price inflation. For example, my wife and I tend to eat at least one pasta dish each week so we can buy our pasta in bulk to save money. The pasta will stay good for a couple of years which we will go through way before then. We also do this for toilet paper, dog food, and other household items that do not expire quickly.

Bonus: Buying in bulk will not only help you fight inflation but will also help you prepare for any emergency such as if you are trapped in your house for a few days after a major snowstorm.

2. Cut Back on Meat

Meat is expensive! Especially red meat. Cutting back on meat and relying on plant-based protein can help you save money each week. We tend to eat 2-3 meatless meals a week. Outside of this, we tend to do chicken or shrimp because they are much cheaper compared to red meat. I will watch out for deals on red meat before putting it on our menu.

3. Meal Prep

Prepping your meals ahead for the week has several benefits and one of them is to help you fight prince inflation. The theory behind prepping your meals is that you are more likely to stick to your weekly menu. While this might sound silly, it really does work! My wife and I spend a couple of hours each weekend prepping our lunches and breakfasts for the upcoming week. I then cook the dinners for the week on Monday and Tuesday evenings.

Meal prep also helps save time throughout the week. It opens up time for me to get other projects done throughout the week.

4. Embrace the Leftovers

I love leftovers so this is easy for me. Not everyone is a big fan of them and that is perfectly understandable. I ask that you learn to love them though because they can save you a lot of money but can save you a lot of time. What would you do with an extra hour in the day? That is what you could be doing instead of cooking dinner and eating leftovers.

Not only do leftovers save you money to combat price inflation but they also limit food waste which is a good thing for the environment.

5. Store Brands

We have a culture in the United States that you need to buy name brands because they are the best. Those brands’ marketing teams have done a great job. While this is true in some cases, most of the time, it is not. We try buying generic brands such as Kroger, Kirkland, Walgreens, and so on. This helps us save on food, dog food, and medicines.

I won’t buy the Kirkland laundry divergent though, it just isn’t as good as Tide.

6. DIY Things

Doing projects around the house can save you thousands of dollars. With Youtube and a little confidence, you can accomplish almost anything around the house. I have saved over $30,000 by completing projects myself. Some of these include:

  • General maintenance on our cars
  • Fixing issues on our cars
  • Sanding and restaining our deck
  • Redoing the landscaping of our yard
  • Small electrical jobs
  • Blowing out our sprinklers
  • Painting
  • And so much more

7. Save on Gas

We tend to only shop at one grocery store, King Soopers. This allows us to accumulate a lot of gas points to purchase gas at their Loaf & Jug locations. We tend to save 10 to 40 cents per gallon each time we fill up. This adds up over the year! If you don’t have any rewards then use apps such as Waze or GasBuddy to help find the cheapest gas in your area.

There are also other rewards programs that help you save on gas such as Pay With GasBuddy.

8. Get to Know Your Neighbors

Knowing your neighbors can be very helpful because you can help each other out. We do this in our neighborhood with items such as trading pet sitting favors. I also helped out our neighbors blow out their sprinklers which saved them $75 each! In return, they help me with other projects or lend me tools they have that I don’t have. It is a win/win situation for everyone!

9. Buy Nothing Group

Buy Nothing Group is such a cool concept! It is working to create a culture of ‘We’ not ‘I’ by developing a community of people who gift, receive, share, lend items with their fellow community members. The idea is to help others with gifts we have knowledge or an abundance of. It’s a very similar concept to getting to know your neighbors that I mentioned above.

10. Buy Second-Hand

Sometimes you can find amazing deals buying second-hand. My wife and I have been buying second-hand clothes for our two kids over the years. This is great because they will grow out of the clothes within six months or the season changes again. There are so many other items you can buy second-hand that will help you save money.

  • Tools
  • Bikes
  • Cars
  • Clothes

Buying second-hand is nothing new but the way we do has flourished in recent years. Craig’s List is a well-known online option but Facebook Marketplace, Nextdoor, and many other apps have jumped into the game. There are also the box stores such as Goodwill and Habitat for Humanity. There are plenty of options to buy second-hand gear to help fight price inflation.

11. Couponing

Couponing is something you should be doing already but if you are not, it is a great way to combat price inflation. I enjoy using the King Soopers mobile app to clip digital coupons. Ibotta is another great application I use to help save money on groceries. We also keep an eye out for manufacture coupons for items that we often buy such as toothpaste and toilet paper. While shopping online, I make sure that I use the Honey App to help me find discount codes.

Make More Money to Fight Price Inflation

These are just ways to combat price inflation by saving money throughout your monthly expenses. Other people are looking towards side hustles to make extra money each month as well. If this seems like something for you, check out our Ways To Make Extra Money page to get some ideas.

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The Financial Toll of Child Care And How You Can Save

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In the United States, the cost of child care is a major financial burden for most families that need to send their kids to daycare at an early age. With two young kids myself, I personally know the financial burden child care can have on a family's budget.In the United States, the cost of child care is a major financial burden for most families that need to send their kids to daycare at an early age. With two young kids myself, I personally know the financial burden child care can have on a family’s budget. We are very fortunate this cost only takes up about 25% of our monthly income. Many families are not as lucky with it costing up to 40-50% of their monthly budget.

Today let us explore the burden of child care costs on families across the United States and how you can save money on child care.

The Costs of Child Care

I have been paying child care bills for almost five years now and I am still in shock at how much it costs. Currently, we pay a modest $2,400 a month for two kids which is the same amount as our mortgage! This is actually fairly reasonable in the Denver area (More about how location affects child care costs coming up).

But why does child care cost so much? Recently I listened to a podcast episode from The Daily about the costs related to child care. Daycares are responsible for paying for their facilities, qualified teachers, maintenance, food, administration, and the list goes on. With limitations on kids to teacher ratios (understandably), daycares are limited to how many

The Financial Toll of Child Care

I already mentioned what my wife and I spend on child care each month. For us, this has hurt our retirement contributions. Over the years we have not been able to contribute as much as we would like to which has set us back in the long run. With one kid about to head to kindergarten next year, we should be able to start recovering from this setback (Colorado has free all-day kindergarten).

There are so many families out there who are not as fortunate as my wife and I have been. According to a survey conducted by The Penny Hoarder, 84% of parents feel overwhelmed by the cost of child care.

How to Save On Child Care

There are so many ways to save money on child care each month and year. My wife and I take advantage of a few of these to help us out as well.

  1. Flexible Spending Accounts (FSA): If you are able to sign up for a flexible spending account through your work benefits, this can be a good place to save money. Why? Because your FSA contribution money comes out of your paycheck tax-free. My wife and I max our dependent care contributions out at $5,000 a year. This will save us about $1,300 a year.
  2. Location, Location, Location: The location of your daycare within the town/city you live in can make a difference. For us, in Denver, it makes a huge difference. My wife and I are still taking our kids to a daycare in a part of town we no longer live in. This part of town is a very low-income part of town so the costs of daycare are a lot lower compared to where we now currently live. The difference is not a little amount either, we are saving over $1,000 a month! Wild! You might be saying, what about the quality? That is a valid question. Sure, the facilities are not as nice but we feel like everything else is better at the cheaper daycare. It has an amazing food program, great staff, and teachers, a state-certified pre-school, and is dual language. You really cannot beat the value. Moral of the story. Do not be afraid to look for cheaper options in child care. They might be just as good or even better than the more expensive options.
  3. Child and Dependent Care Tax Credit: While not as valuable as an FSA but the child and dependent care tax credit is something you need to take advantage of, especially if you cannot contribute to a dependent care account.
  4. Family or Friends: If you have family or friends in the area that are looking to earn some extra money, this might be an opportunity for them to do so. Some stay-at-home parents are looking for the opportunity while they are watching their own kids. This idea could be especially helpful if you do not have a traditional five-day-a-week work schedule.
  5. Nanny Share: I have seen many parents on the Nextdoor app looking for other families to share a nanny throughout the week. Sharing a nanny can really cut back on the costs of child care. Just like above, this idea could be especially helpful if you do not have a traditional five-day-a-week work schedule.
  6. At-Home or Church Daycares: At-home or church daycares can be cheaper than traditional child care providers. Be sure you do your research about these providers, especially for at-home ones. Some people are more comfortable with this option compared to others. You need to decide what you are most comfortable with for yourself and your kid. Growing up, at-home child care providers were the only options we had in my small town of 2,500 people. They were awesome! You can also find many providers through Care.com and SitterCity.com.
  7. Kid Spacing: While a personal choice, my wife and I did take into consideration how close or apart we wanted to have our kids. Having kids closer together helps get you through the daycare system quicker. The quicker you get through this stage of life, the cheaper it will be. On the flip side, having kids really far apart (4-5 years) is another option because you will only have one kid in daycare at a time.
  8. Are you a Teacher?: My wife is a high school teacher so we have worked with our child care provider to take them out in the summers. This means we do not have to pay that bill for 10-weeks of the year which saves us almost $6,000 over the summer. Wow!

As you can see, saving some money on child care takes a lot of creativity but can be really worth it to lessen the financial toll child care can have on your finances.

Last Thoughts

The last thing you need to consider is it worth sending your kids to a daycare or not? My wife and I had several conversations before our second kid came along. We talked about the financial aspect. Was it worth having one of us stay home with the kids so we did not have the daycare cost? Ultimately we decided the difference between the cost of child care and income was great enough to keep sending the kids.

Not all decisions are financial either. We thought talked about the social aspect the kids are getting. Both my wife and I enjoy our careers so we didn’t want to sacrifice those either. As mentioned before, my wife is a teacher so she gets to still have her career and spend summers with our kids. What an awesome arrangement!

What are you doing to save money on child care expenses?

Looking to earn more money? Check out our Ways to Make Extra Money page. Here you will find over 70 ways to earn more money.

Top 10 Tips For Renting Out a Room in Your House

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I have rented out rooms in my house for over five years now. Since I began over five years ago I have taken in over $80,000 in rental income and tenants have paid me 100% of the time. I have also saved over $100,000 at 27 years old.  In this post, I am going to show you 10 tips for renting out a room in your house.I have rented out rooms in my house for over five years now.

Since I began over five years ago I have taken in over $80,000 in rental income and tenants have paid me 100% of the time. I have also saved over $100,000 at 27 years old. 

In this post, I am going to show you 10 tips for renting out a room in your house.

Tip 1: Confirm You Are Ready for a Roommate

Taking in a roommate is something you need to carefully consider. A few questions to ask yourself are:

1. Am I willing to give up some personal space?

Having a roommate means you won’t be able to walk around in your underwear all day (#workfromhomelife?). 

Joking aside, renting a room in your house means you will have to make some alterations to your life. I’ve made several changes in my life. Cooking at a different time, washing my dishes immediately after use, and not playing loud music are a few I have made. 

To me, these are small sacrifices made to have the financial benefit of the monthly rent.

2. Does my lifestyle allow for a roommate?

  • Do you jam out on your guitar at midnight? 
  • Do you have a rocking surround sound system for your TV? 
  • Do you despise being around others, especially people you don’t know well?

If you answered yes to any of these questions you may want to pass on renting a room.

I’ve seen time and time again new landlords who think they can rent a room and keep their same living habits with a roommate. This simply is not the case. Once you convert your home into a renting space, changes have to be made.

To be successful in renting out a room, you’ll have to make sacrifices. 

If you believe yourself to be a relatively quiet person, easy to get along with, and are good at communicating, renting rooms may be an option for you.

Tip 2: Make Sure Your House is Roommate Ready

There are several things you want to make sure are in place before renting a room. You’ll want to read up on your state’s landlord-tenant laws and the fair housing act to understand what is acceptable and what is not. There also may be local zoning ordinances that you want to make sure you are aware of.

Here are a few things that you should do when you rent a room regardless of the state you reside in.

  • Smoke and carbon monoxide detectors in their correct place.
  • Have a keyed lock on your master bedroom and their bedroom door to respect your tenant’s privacy.
  • The bedroom is freshly painted and any holes filled in.
  • Living space in the entire home free from clutter and personal items.

Once you have the house ready you can consider renting a room. I strongly recommend you do not rent a room until you and the house are 100% ready to take someone in. 

I have made the mistake of having someone move in too quickly because I was desperate to rent a room because I thought I “needed” the money.

Bad idea, big mistake. Don’t do that. 

Tip 3: Write a Clear & Specific Room Advertisement

After a few bad roommate situations, I was stuck and didn’t understand why it kept happening to me. 

After some reflection, I realized that the problem was not my roommates, it was me. 

This sobering fact made me realize the only way I was going to find my ideal roommate was by being specific and clear on what I wanted and what I did not want. 

My original advertisement was vague, only had my email address, and did not talk about the important aspects of the house, living situation, or my expectations.

There are 8 elements I added to the room ad that helped me find dozens of ideal roommates. The best one was with me for over 3 years, was quiet and paid rent like clockwork. These elements will help you charge higher rent and find exactly what you are looking for.

1. Date available

Something so obvious that most miss. Put the exact date you are ready for them to move in. Don’t put “in a couple of weeks.” Instead, write “ready for move-in on December 1st.” 

2. Proximity to local attractions

Is your house close to the university, grocery store, lake, or highway? Make sure to include any of these and the drive time. I even hopped in my car and timed how long it took to drive to the local college. 

This is good to put there because it saves your future roommate time and if you are too far away from their desired location it will save you a phone call. 

Be creative too. I list how close the bike trails and lake are to my house. Figure out why people would want to rent a room in your home’s location and list those nearby attractions. 

3. Room description

List the square footage of the room and the dimensions. This is common in the real estate world. It helps the roommate see if renting out a room in your house can fit all their belongings. 

List what else the room has. 

A private bathroom, ceiling fan, dual pane window, walk-in closet, and hardwood flooring are all examples. Again, better to be as specific as possible. 

4. Amenities

List exactly what they will have access to while renting from you. Washer and dryer, fridge space, high-speed internet, cooking access, covered parking, and others. Make sure they are clear that they are renting a single room and not the entire house or master bedroom. I also add the square footage of the house so they have an idea of how much space the entire property is.

5. Lease terms

I do my best to avoid short-term rentals when looking at potential tenants. The reason is that I spend a lot of time making sure the room is ready and screening tenants takes a lot of time also. If you are going to do a month-to-month or 6-month lease make sure they understand that will be part of the room rental agreement. I prefer the room rental to be month-to-month. We’ll touch more on that later. 

6. In search of

This is where you begin to be very, very specific on who you want to rent out a room in your house. 

Here are a few traits that I list in the ad: clean and tidy, responsible, peaceful, and open to communication.

You want to find a roommate who is serious about life. I’ve dealt with many people who think life is a joke. I have found that people who are working full time and are more serious about life are going to keep the spare room in good shape and pay rent on time. I love it when the rental income hits my account on the first of every month! This makes renting out a room all worthwhile when that transfer comes in.

7. Not looking for

Again, be very specific. If you are vague your roommate will not respect you or your house rules. 

I talk about how I go to bed at 9 pm and party animals are not conducive to this environment. Party guys usually don’t pay rent on time either. Lose-lose. If you have some specific interests like personal finance or the guitar or a certain TV show, make sure to list that too. You may find a kindred spirit. Whenever I’ve found someone who has similar interests as me, things have gone smoothly.

8. About the roommates

A brief introduction to me. I talk about my job and how I am the best landlord you’ll ever have. Humor here is good too. Real estate can be dry sometimes. Simply because you have your own house and are a landlord doesn’t mean you have to be stuck up. 

9. Phone number and call to action

Don’t list your email address. You’ll have foreign “royalty” who will offer to send you $400,000 via wire transfer, all they need is your bank account number and the address of your real estate. These scams are prevalent on every real estate website. 

Put your name and phone number and say “if you have not read this whole ad don’t call. Serious inquiries only.” That line alone has saved me countless hours of talking to unqualified people. 

Tip 4: Choose the Right Person By Asking the Right Questions

Ask dumb questions, get dumb answers. 

Elevating your questions will help you fend off potential tenants who are not your ideal roommates. 

You want all the questions to give you insight into if this potential tenant is going to be a good fit renting a room in your house. 

Here are the three most important questions you want to ask anyone interested in renting a room from you.

1. Do you have the first month’s rent and security deposit amount ready today?

If they have any excuse why they don’t have the money ready today, politely ask them to call back when they do. Some may see this as being too harsh yet it’s not. 

Having high standards attracts the right person who will rent a room from you. It doesn’t matter if they are waiting on their next paycheck for some extra cash from a bonus or any other $2 excuse. 

If they answer with a resounding “yes, I have the money ready now” then you can move on to the next question.

2. How long have you worked at your current job?

I only rent to people who have been at their job for at least 6 months. I’ve seen that if someone is unreliable at a job they cannot keep one. This means they may not pay on time no matter how much rent they are required to pay. 

Ideally, you want to find someone who has had the same job for at least one year.

3. What’s your normal daily schedule?

When someone is renting a room in your house you want to make sure you have similar sleep schedules. If you work a normal 9-5 do your best to only have a room rental with someone who shares your schedule. 

I once had a roommate who worked the night shift and would come in early in the morning and wake me up. Not fun at all. 

Tip 5: Call Their References

Trust is to be earned, not given freely. Simply because they give you a phone number to a manager for their job, make sure to call them and see if it’s one of their family members posing as the “manager.” Make sure to do a quick internet search and call their employer from the number listed online.

When it comes to room rentals, you’ll have a college student who thinks they can pull one over on you. 

Not today, Jack! 

But seriously, verify everything. When you have their pay stubs, call the company and verify their employment start date. This is when you have to put on your property manager hat and do some investigating. Renting out a room does take some work and this is it. 

You don’t want your desire to make extra income to cause you to take shortcuts because you’re desperate.

Tip 6: Never Negotiate The Price

I laugh out loud when someone wants to barter with me on the rent price. Whenever I listen to someone saying this over the phone I want to ask them “the rent price is not like a used car, it’s not changing.” 

Nonetheless, you may have someone who thinks they can get a “deal” on the room. I don’t lower my price, ever. The person who wants you to lower the price is most likely the same person who is going to want another concession. “Can I pay rent on the third instead of the first, it’s more convenient for me.” 

No, no no! 

Avoid having to go through the eviction process with a tenant like this. Don’t rent to them in the first place. Eviction laws are no joke!

Tip 7: Have a Written Rental Agreement

Landlords who have written rental agreements win. When renting a room you want to make sure you put everything in writing. This is also called a lease agreement. 

Even though you’re only renting your spare bedroom you still want to make sure you have a clear room rental agreement. Treat this as a rental property that you happen to live in.

I have never had to go to small claims court yet I’ve seen how if/when you have to go to court when you treat this renting out a room in your house “business” as a real estate investor you will be ready for that day.

In your rental agreement, you want to include several things. The security deposit, how/when to pay rent, any disclosures for the fair housing laws and what happens if they default (don’t pay) on their rent payments. 

You want to check any city zoning laws if you live in an urban area also. In some places, you must follow certain rules to rent a room in your house. 

Best to do plenty of research on zoning laws to make sure you comply. 

Also, if you have a homeowners association it’s best to read your bylaws and make sure you are allowed to have a tenant living in your home.

Tip 8: Sign A Roommate Agreement (House Rules)

The roommate is different from the lease agreement. In this agreement, you’ll go over the “house rules” and how to handle normal tenant issues. 

  • Do you want the house to have quiet hours from 10 pm to 6 am?
  • Are you allergic to pet hair and don’t want any pets in the house? 
  • Do you want to allow your roommates to bring overnight guests?
  • Do you want the laundry room and any living space only to be used during the day?

This is very personal and you’ll have to find out which rules you want in your own home. This is your primary residence, remember! 

Tip 9: Buy the Right Insurance

You’ll want to check with your insurance policy and even call your insurance provider to ensure you have coverage for a roommate. Don’t let this one slip through the cracks. 

Some policies allow renting a room to one person and some don’t allow renting out a room at all. 

Don’t assume because you have a security deposit that will cover anything they might do to the rental space. 

The last thing you want is something bad to happen and you have no coverage from your insurance policy. 

If your current policy doesn’t cover roommates, consider searching for an independent insurance agent in your city who can give you a quote from multiple insurance companies. 

You want to make sure as you generate extra income you will be covered in case of a loss. This is one of those rental expenses that you don’t want to skip.

Tip 10: Check-in Regularly

Simply because they rent a room in your house doesn’t mean you can’t be friendly. I always have this policy: be friendly, not friends. You want to make sure you’re cordial yet always keep healthy respect and distance. You don’t want to become best buds only to have them not pay rent on time because “we’re best friends. Let me off easy.” 

Final Thoughts

When considering renting out a room in your house you want to make sure you’re proactively prepared. I’ve seen many new landlords renting out a room for the first time become reactive because they were not prepared with a lease agreement or didn’t read up on their state’s landlord-tenant laws. 

Not knowing what regulations govern your area can land you in legal trouble. Remember to do plenty of research before you decide to rent a room in your house.

If you are unprepared, it makes for an uncomfortable environment for everyone involved. 

Whether you decide on renting out a room or multiple rooms in your house these tips will help you get on the right path. 

Happy Landlording!

Max at Max My Money

 

why-refinance

Why Refinance? A story on why we decided to refinance our mortgage.

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At the beginning of our homeownership journey, my wife and I had trouble answering the question, "Why refinance our mortgage?" We had a very low 3.125% interest rate so, to me, it just didn't make sense why we would want to spend thousands of dollars to save $20 a month. And really, that doesn't make sense.

At the beginning of our homeownership journey, my wife and I had trouble answering the question, “Why refinance our mortgage?” We had a very low 3.125% interest rate, so, to me, it just didn’t make sense why we would want to spend thousands of dollars to save $20 a month. And really, that doesn’t make sense.

I seriously started looking into why we should refinance when several of our neighbors began to in the Spring of 2021. At that point, it still didn’t make sense for my wife and me because the cost-benefit ratio was not there.

Still, I was bothered by it, so I kept brainstorming about how we could benefit from refinancing our mortgage. Then one day, a brilliant idea hit me.

Before we get into my wife’s and my story, let us talk about what and why you should refinance your mortgage.

What is Refinancing?

Simply put, refinancing “refers to the process of revising and replacing the terms of an existing credit agreement, usually as it relates to a loan or mortgage.” (Investopedia). Borrowers usually seek to refinance to improve their current contract conditions. Refinancing can be done by businesses or individuals who are looking to save money somewhere.

Today we are focusing our conversation on residential home mortgages that the typical homeowner holds. Most often, these mortgages are refinanced because of lower interest rates. Another common reason for a refinance is because of a significant home value increase. The homeowner will perform a cash-out refinance to make improvements to the home or purchase more materialistic items.

Personally, in most cases, I’m not too fond of the cash-out refinance because you are taking on more debt. Our goal for financial freedom is to get out of debt, not take more on.

Of course, there are always exceptions to that statement.

Why Refinance?

There are so many reasons why people decide to refinance their mortgages. As mentioned before, the most common cause is to lower their interest rate. Locking at a lower rate can sometimes save people a couple of hundred dollars a month. Reducing your interest rate does not always make sense. For example, in 2021, we saw historic low rates that hovered around 3.00%. Spending so much money to refinance your mortgage for a 2.825% interest rate does not make sense. Depending on your situation, it might make more sense if they dropped to somewhere between 2.50% and 2.75%.

There are so many other reasons we would want to refinance, such as the cash-out option, improving your payment schedule, or changing the terms outlined in the contract. Next, we will talk about the couple of reasons why my wife and I decided to refinance.

Our Story

Now that we have a little more context of what and why to refinance, let us get back to my wife’s and my story on why we decided to refinance our mortgage.

Context

We live in the Denver Metro area in Colorado. Like a lot of the country in 2021, the housing market is going crazy! My wife and I bought this house at the beginning of the COVID-19 pandemic for $500,000, which sounds like a lot, but we were able to get the house for under asking price, a rarity in the Denver area. Just after 12 months, the value of our home had increased to $615,000! That is not a bad return in just one year, but we had no way to tap into this equity.

Our Problem

For us, it didn’t make sense to refinance to try to get a lower rate when it was going to cost us just over $6,000. We qualified for a 3.000% loan, but that would only save us $30 a month. At that rate, it would take us over 16 years to pay off the refinancing cost.

For a while, I was bummed trying to think of how we could tap into that $115,000. Sure, we could use it to accomplish some projects around the house, such as refinishing the kitchen and the bathrooms. We did not want to take on any extra debt with about $90,000 in student debt (between my wife and me). Thinking about our student loans eventually led me to my grand idea!

Grand Idea Goals: 

  1. Get rid of private mortgage insurance (PMI)
  2. Restructure my student loans into our mortgage.

When we bought the house, we were able to put 10% down. After the 2008 housing crash, a new law was introduced that requires homeowners to carry mortgage insurance until they have 20% paid off on the house loan. For us, this insurance costs us $67 every month. Our goal was to use some of that $115,000 to get us up to that 20% to drop the PMI payment.

Next was my student loans. Typically when you refinance to take some cash out, you should expect to pay a slightly higher interest rate. Lenders see these cash-out refinances as higher risk (The Mortgage Reports). For example, if I wanted to cash out the remainder of the $115,000 to finish our kitchen, my loan rate might be 3.125% or 3.250% instead of 3.000%.

If you intend to “payoff” your student loans with the extra home equity, this is not the case because of a Fannie Mae and Freddie Mac program. After some research, we decided to restructure my student loans into our mortgage. Let’s take a look at the pros and cons.

  • Pros
  • – We are not taking on anymore debt.

    – We are lowering the interest rate from 6% to 3%

    – We are getting rid of a $550 a month payment

  • Cons
  • – Not truly paying off the loans.

Our Story Conclusion

Overall, we decided to refinance to remove our $67 PMI payment and eliminate my $550 student loan payment. All of this without taking on any more debt! Our mortgage payment would go up by $90 a month, but that was okay because we still save $527 a month. We can now put this extra money into our retirement fund, which will hopefully earn four to six percent more than the three percent my student loans are costing us.

Do What Is Best For You

Every situation is different for people. My wife and I had a unique opportunity that we wanted to take advantage of. We do not plan on leaving this house for another 20-30 years, so it made sense to take advantage of the current housing climate. If the housing market crashes and we go underwater on the house for a few years, that is okay because this is our long-term primary home. It would have been different if this was a secondary home that we rent out.

The moral of today’s story is to be creative and think outside of the box. Do not over-extend yourself and your finances. Be smart.

car-extended-warranty

What Does an Extended Warranty Cover on a Car?

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It’s great to have the security of a warranty so that you know expensive repairs will be covered. But what happens when that warranty times out? That’s a particular key question when it comes to your car, something you likely use every day, or close to it. Is it a good idea to get the prolonged protection of an extended warranty? Will it cover everything that your original car warranty covered? Maybe, maybe not.It’s great to have the security of a warranty so that you know expensive repairs will be covered. But what happens when that warranty times out?

That’s a particular key question when it comes to your car, something you likely use every day, or close to it. Is it a good idea to get the prolonged protection of an extended warranty? Will it cover everything that your original car warranty covered? Maybe, maybe not.

Here’s information to help you decide what makes the most sense for you.

What Is an Extended Warranty?

Typically, when you buy a new car, you get a manufacturer’s warranty, which covers you for certain repairs. But that warranty doesn’t last indefinitely, and you might still want protection once it has expired.

An extended warranty is essentially an insurance policy on your vehicle, protecting you against expensive unforeseen repairs. It typically kicks in after your manufacturer’s warranty expires to cover repairs for a specified period of time or number of miles, whichever comes first.

Extended auto warranties are also called vehicle service contracts or aftermarket warranties. They cost extra and are sold separately from the car. And they are technically not warranties, so they are not subject to the same federal consumer protections.

How Does a Car Warranty Work?

When you buy a car, it typically comes with a warranty. This is best described as an agreement with the car’s manufacturer that it will cover the cost of certain repairs or issues that may crop up —particularly issues that result from vehicle defects or poor workmanship. While car warranties vary, you can generally expect that things like problems with the engine, transmission, and steering system, for example, will be covered.

Types of Extended Warranties

There are two primary types of extended warranties. There are those that you get from the carmaker (or, in-car jargon, the original equipment manufacturer). And then there are those offered by third-party vendors, like an insurance or warranty company that is independent of the car manufacturer.

Car Manufacturer Extended Warranty

When you buy a new car, it generally comes with the manufacturer’s warranty. But also, when you are buying your car and/or when your original warranty ends, you might be offered an extended warranty by the manufacturer, too. If you choose to purchase this coverage, you will be charged for it. And while some manufacturers may replicate the terms of your original warranty, others may not, so you’ll want to check the terms very closely if you move forward with one of these policies. You’ll also want to check when the extended warranty begins, because there’s no point in paying for duplicative coverage.

Third-Party Warranties

Similarly, there are also auto service contracts that may be offered by dealerships or by third parties. Costs and what’s covered can vary widely, so if this is something that interests you, be sure to spend time comparing prices, coverage limits, deductibles, and terms before making a decision. It’s also a good idea to check the payment process for repairs. You might have to pay upfront and then file a claim for reimbursement.

Some third-party warranties may have exclusions, rules, and requirements that manufacturers’ warranties typically don’t. These downsides can include strict limitations on where you can have your vehicle fixed and hefty deductibles. There may be no guarantee that parts from the original manufacturer will be used.

What is Usually Covered Under an Extended Warranty on a Car?

Make no assumptions. Warranties differ, so if you opt for an extended warranty, be sure you know what’s covered and what’s not.

You might be able to get comprehensive bumper-to-bumper coverage. You may be able to find coverage for air conditioning and heating systems, electrical components, airbags, engines, transmission, and more. Or you might sign up for more targeted protection for the powertrain only or for other specific components.

Plans can also vary in duration, with most providing three to five years of coverage.

Your contract should also clearly spell out where and from what providers you can get assistance.

What’s Not Covered in a Car Warranty?

If you’re looking at extended warranties, this is a list you want to pay special attention to. It can be nerve-wracking as well as potentially quite costly when something you thought was covered is in fact not covered. Policies vary, but most often you won’t get coverage for routine maintenance like oil changes and tire rotations or the normal wear and tear on headlights, brakes, or holes in the seats or broken plastic, or scratches in the paint caused by your dog or children, among other things.

Are Tires Covered Under Warranties?

It’s a rarity for tires to be included in the manufacturer’s warranty.

Most often, the tire manufacturer provides the warranty on their tires and the typical duration is about four to six years. That coverage can include free repair if the tires develop problems during that window and/or replacement of tires if the original tires have manufacturing defects. Know however that if you need to make a claim, you will likely be asked to show proof that you’ve been taking good care of your tires regularly.

How to Qualify for an Auto Warranty

The newest car on the block is likely to get more love when it comes to auto warranties. If your vehicle is newish (definitely less than 10 years old), it’s likely to qualify for the most favorable coverage. If your car is brand-new, it’s probably under its manufacturer’s warranty still and chances are that most extended warranty policies that run concurrently would involve duplicating coverage. That’s why it’s a good idea to make sure you know when exactly your extended warranty begins.

And the lower your mileage is, the better the odds that you’ll be eligible for a full coverage extended warranty. Some extended warranty companies cap mileage for eligibility at 100,000 miles. This isn’t surprising, since when you have a lot of miles on your car, repairs are likely not too far down the road. Low mileage also helps lower the price of your coverage.

Cost of an Extended Warranty

How much is this extended protection going to cost you? Naturally, that depends. Factors include the age of your vehicle, how often you drive, the number of miles on your car, your car’s brand and model, condition of the car, coverage type, and your deductible (if you have one your premium will be lower), among others. For a ballpark figure, the average cost of an extended car warranty is about $2,800.

Pros and Cons of Extended Car Warranties

This chart sums up some of the top pros and cons when you’re deciding about getting an extended car warranty.

Cons Pros
You may not end up using the warranty, even though you’ve paid for it or the cost of repairs may be less than you paid for the warranty. You have help covering the cost of repairs that are included in the plan.
These warranties may involve multiple exclusions, restrictions on where you can access service, and deductibles. It may give you peace of mind to know that you have a plan to help deal with unexpected repair costs.
You may not have full protection even for parts that are covered. If the warranty is transferable and you’re planning to sell your vehicle, it can increase the car’s value.

Is an Extended Warranty Worth it?

If you’re buying a vehicle with a reliable track record, you may not need extra protection, especially at the price you’ll have to pay for it. The smarter play may be to “self-insure.” For this, you’d sock away some cash in an emergency account to take care of any repairs that might come up. Then, if you don’t need to use the funds for your car, you still have them available for other purposes.

But in the end, you know yourself best. If you’ll sleep better with an extended warranty, just in case, do what brings you peace. Just be sure to do your homework first so that you get what you need.

The Takeaway

There’s no way to know in advance whether an extended warranty could pay off or not. One alternative is to save the money you would have spent on one in a separate emergency account. If you do decide to buy an extended warranty, do your research and shop around to find the best product for you.

If you’re also thinking about refinancing your car loan, Lantern by SoFi can help. Fill out one simple form and receive auto refinancing offers from multiple lenders in our network.

 

The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.SOLC0621106