Is It Time To Buy Your Own House or Continue Renting?

rent or buyAre you considering the pros and cons of renting vs. buying a house and how it will affect your finances in the long run? Well, hundreds and thousands of people in the world have the same dilemma, so how do you decide?

This could be the second, third or hundredth article you’ve read to satiate your question, but what really are factors you should consider why trying to decide? Will we ever answer this question since the dawn of residential industry – should I buy my own home or just continue renting???

In this market, you have to consider a number of factors when deciding whether to rent or buy a home. Some people say that rent money is dead money. It’s a myth made popular by those in the real estate industry.

Like all financial decisions, there are benefits and costs associated with both renting and buying. Here’s what you need to know… [Read more…]

5 Things to Know When Shopping at Outlet Malls

shopping at outlet mallsI’m not a huge fan of clothes shopping, but at the same time, I don’t despise it either. I usually will wait until I need some items, stock up and be done with it. My trips usually start out at my local shopping mall where I will buy items depending on how great of a discount I get. From there, I’ll go shopping at outlet mall near my parents and pick up a few more items.

Over the years, I’ve noticed that shopping at outlet malls isn’t what it’s cracked up to be. Everywhere you read, people are raving about the prices and deals. Yes there are deals, but many times, they are not as good as you might think. Below is a list a handful of things to keep in mind when shopping at outlet malls.

Shopping At Outlet Malls – Things To Know Before You Buy

Prices Aren’t Dirt Cheap

If you are going shopping at outlet malls hoping to get a $500 pair of jeans for $10, you are out of luck – you aren’t going to find that great of a deal. But for the most part, the price of items will be cheaper than in the regular store.

Case in point: I shop at Banana Republic. When I walk into their regular store, a dress shirt ranges from $50 to $80. At the outlet mall, the store has shirts for $40 plus a discount. I can usually get my dress shirts for around $25.

Not All Coupons and Gift Cards Work

If you can’t sleep at night, you might try reading the fine print on the back of your gift cards. Some gift cards and coupons state that they are not valid at the outlet store. So before you think you are going to get an excellent deal, make sure you read the fine print. In many cases, the store has separate coupons specifically for their outlet stores. Nothing is worse than loading up on clothes and then at the register finding out the coupon isn’t valid.

Different Merchandise

If you go the mall and see a great shirt and think you’ll just go to the outlet store and get it cheaper, think again. Rarely does the outlet store have the same items.

When I shop at Banana Republic, I almost never see the same items in both stores. Many times it is merchandise made specifically for the outlet store. Other times it is last season’s leftovers.

Just recently I was looking for new winter jacket. I found one I loved made by The North Face. Instead of buying it, I took a trip over to the outlet mall where there is a North Face store. When I walked in I was greeted with completely different merchandise. When I asked the clerk about the model of jacket I was looking for, he said they didn’t have it.

Quality Varies

As mentioned above, some stores make merchandise specifically for the outlet stores. To offer the lower price, the manufacturer will use a lower qualify material. Don’t let this worry you too much. I have not had any issues with the clothing I buy at the outlet stores. If it is a store you have never heard of before, you may want to be a bit hesitant. But a store like Calvin Klein is not going to let their brand be destroyed by using material that is not close to what they use in their main stores.

But with that said, it is important to take note of the clothes in the regular store before heading to the outlets. When I was shopping for a polo shirt, I found the outlet mall version to be very thin and light compared with the store at the regular mall. Same thing for a t-shirt.

I was looking for some low price shirts for working out and doing things around the house in. At the mall, the shirts were $20 and up. At the outlets, the price was $7 but they were so thin they might as well have been an undershirt. It wouldn’t have lasted a year before completely falling apart.

Additionally, sometimes the items in the outlet store are there because they are damaged goods. Usually it is a very slight imperfection, but big enough to warrant it unsellable at the main store. Be sure to look over the item in question to see any possible defects before buying.

Know The Return Policy

Unlike stores in the shopping mall where as long as the tag is still attached you can return the item, outlet malls are a little different. Many still honor the new with tag return, but others only offer a 90-day or 120-day return. Some don’t allow any returns whatsoever. This is especially true on final markdown or clearance items. Make sure before you purchase something that you are aware of that stores return policy.

Final Thoughts

Overall, shopping at outlet malls can yield some great savings. You just have to know what you can expect going in and don’t go in thinking that you can’t find a better deal someplace else. With all of the coupon sites online along with free shipping, many times, shopping online will get you as good of a deal or even better than when shopping at outlet malls. At that point, the key then is to actually sock away the money you saved as opposed to spending it elsewhere.

Readers, what deals do you find when shopping at outlet malls?

What Is A 203K Loan, And Why Every Homeowner Needs To Know About It

how to turn your house into a rentalIf you own a home or are looking for options on how to buy one with little or no money down, you need to know about the government backed program that can be very helpful and even lucrative. AFHA home improvement loan under section 203k, also referred to as an FHA 203k loan, is what you’re looking for.

This loan makes it possible to finance home improvements with a low rate insured by the U.S. Government. It can be used by current homeowners needing a major upgrade or by prospective homeowners purchasing a home that needs repairs, upgrades or renovations.

What Is A 203K Loan?

According to the U.S. Department of Housing and Urban Development (HUD) website, they summarize a 203k loan as follows:

“Section 203(K) insurance enables homebuyers and homeowners to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of their existing home.”

Simply put, it fills a need that has grown significantly since many homes can use s little remodeling or renovations, especially if you are buying a previously foreclosed home. These government insured 203K FHA home improvement loans are a great way to buy and remodel all in one loan! [Read more…]

5 Tips To Stop Living Paycheck To Paycheck

borken piggy bankHappy Wednesday!! Please welcome Tahnya, who will be sharing stories with us every other Wednesday. She got herself into debt trouble and dug herself out – all while being a financial planner. Learn from her debt experience so that you don’t repeat the same mistakes she did. Be sure also to check out her site, Tahyna Kristina.

Do you find yourself with enough money to live but no money left the day before pay day? If so you may be living paycheck to paycheck. It’s the reality of many Americans and it’s OK. Living paycheck to paycheck is not ideal, but it’s better than living in debt.

You may be asking yourself “If I have enough money to pay rent, buy food and avoid debt why is living paycheck to paycheck so bad?” The answer is it’s not. It’s only a problem if you want to plan your life beyond the next two weeks.

If you have bigger and better plans and want to save money for the future then living paycheck to paycheck just won’t do. You may wonder “How do I stop?” I know I did. I didn’t see how I could make changes to my spending until I actually sat down and asked myself “Why?” Once I determined why I wanted to stop living paycheck to paycheck I stopped doing so.

5 Tips to Stop Living Paycheck To Paycheck

Think About The Future

What better way to adopt a new habit then to already picture yourself doing it. If you can think of all the reasons why living paycheck to paycheck isn’t for you anymore you will convince yourself to change. [Read more…]

8 Ways to Save Money Eating Out

save money eating outI enjoy eating out just like most other people. Sometimes it is because I am lazy and don’t feel like cooking. Other times it is to try different foods that I haven’t had yet. And still other times it is to get together with friends and socialize.

While I try to keep the eating out due to laziness as infrequent as possible, it still does happen. And regardless of the reason for eating out, there are tricks you can use to save money when dining out. This post is going to walk you through 8 of my favorite ways to save money eating out, with most of them requiring little effort on your end to see success in saving money.

 

Ways to Save Money Eating Out

1. Share plates
2. Watch your portion sizes
3. Don’t order drinks
4. Eat at happy hour
5. Sign up for loyalty programs
6. Buy restaurant gift cards online
7. Buy restaurant gift cards at the grocery store
8. Eat for free

Share Plates

Portion sizes at restaurants are huge! An easy way to save money eating out is to only order 1 meal. There is plenty of food on one plate for two people. For example, at TGI Fridays, a plate of chicken fingers is 1,000 calories and costs $10. That is 40% of your daily calories in just one meal. Simply split the order between two people, save $10 and your waistline too! [Read more…]

Refinance My Car. Wait, What?

money down the drainA few years ago, I was in the market for a new car. At the time I was driving a 2001 Volkswagen Golf and to say it was nearing its end of life was an understatement. The car only had about 150,000 miles on it, but there were numerous ongoing issues:

  • There was a small oil leak from somewhere (I couldn’t figure out where)
  • There was another small oil leak from the turbo
  • The transmission was starting to slip
  • The check engine light would come on because of an issue with the exhaust
  • There were electrical gremlins – the radio and interior lights would randomly work/not work

While I could have gotten these issues fixed, in total they would have cost me more than the car was worth. So, I decided to part ways and look for something new.

I was open to a lot of different vehicles, but settled on newer cars simply because of the technology features they have as well as the advanced safety features. Since I planned on keeping the car for a long time (meaning around 10 years or so) and was going to start a family during this time, safety was a big concern.

After going back and forth on a handful of cars, I settled on a 2013 Volkswagen GTI. Yes, I was committing a major personal finance sin by buying a brand new car. But as I talked about on Monday’s post, personal finance is personal so you have to do what makes the most sense for you and your situation. [Read more…]

Pay Off Debt or Invest?

pay off debt or investOn any given day, you can visit a random personal finance blog and I bet you will find this very question: should I pay off debt or invest in the market? The standard answer that you will find 99% of the time is if your debt is costing you more than you can earn in the market, then yes you should pay off debt.

For example, let’s say you have a credit card that has an 18% interest rate. Given that 8% is a very conservative long-term return assumption for the stock market, you can see that paying off debt makes sense here. After all, why invest to earn $0.08 per dollar when you are paying $0.18 per dollar on your debt? You would be losing $0.10 per dollar if you followed this logic!

But when we move our attention to lower interest rate debt as well as debt that can be deducted on your taxes, the story becomes a bit more confusing. [Read more…]

Who Can Help With Your Debt

help with your debtHappy Wednesday!! Please welcome Tahnya, who will be sharing stories with us every other Wednesday. She got herself into debt trouble and dug herself out – all while being a financial planner. Learn from her debt experience so that you don’t repeat the same mistakes she did. Be sure also to check out her site, Tahyna Kristina.

If you’ve ever sat at your computer screen looking at your bank account balances thinking “How did I let it get so out of control” or if you’ve ever gone to the bank and had to decide whether to pay your electric or cable bill while waiting in line then the odds are you need help with your debt.

Those situations may sound sad. I’ve actually been in both and I can confirm that they’re not pretty, but then again financial struggles never are. I knew I needed help with my debt, but the problem was I didn’t know where to start. I knew I needed to make changes, but I didn’t know what changes needed to be made.

The truth is there are several people out there who can help with your debt, you just need to know where to look. Below are a handful of resources for help with your debt. [Read more…]

Cutting Monthly Expenses: Save A Ton Of Money Each Month

cutting monthly expenses finalIf you are like many Americans, you are struggling to get a handle on your monthly expenses. Many of you might even be living paycheck to paycheck. I’ve talked before about if you want to become wealthy, you need to focus on both sides of the wealth equation. Today, I am going to focus on the savings side of this equation. More specifically, I am going to talk about how to cut monthly expenses from your budget so that you can save a ton of money each month.

In order to cut our monthly expenses the most, we are going to take a top down approach to cutting our monthly expenses. In other words, we are going to start with the big and work our way down to the smaller things that cost us money each month. So grab a pen and paper and get ready to take some notes.

Cutting Monthly Expenses: The Big Expenses

Most of us have just a few large expenses in our monthly budget. These include our mortgage/rent, insurance, and taxes. We focus on these things first since taking the time to save money here will pay off in a much larger way. After all, there is a lot more money to save on your insurance premium or your monthly mortgage payment than there is on your coffee habit, unless of course you drink 20 cups a day.

Mortgage/Rent

Cutting monthly expenses when it comes to your mortgage isn’t too difficult of a task. One common step is to refinance for a lower rate than you are currently paying. But, there are traps with refinancing. You could pay an absurd amount in fees, negating the interest savings or you could even get tricked into extending the length of the loan, causing you to spend more money in the long run. [Read more…]

End of June 2015 Update

beach chairsWell it is officially summer and July 4th has come and gone. Most people now are looking forward to summer vacations (if you haven’t taken one yet) and eventually Labor Day. But for now, let’s just focus on enjoying the nice weather!

A lot has happened since I posted my last update the end of April. So much so that I going to get right into things and not keep you waiting!

Personal Updates

Money

My wife and I are in the home stretch with combining all of our accounts. There were some stragglers out there that needed to be taken care of and most of this is done. I then took some time and reviewed all of our investments, making sure our allocation was still on track and then made some trades to balance things out. [Read more…]