Author - Raine Financial Solutions

Check Your Credit Score

Once you’ve decided you want to buy a home the very first thing you should do is check your credit score with the big three credit reporting companies. This should be done even if you think you know what your score is as something on there might surprise you. Your credit score should be at least 660 before you consider buying a house. So if you aren’t there yet, take some time to improve your credit score before you move on to the next step.

Calculate Your Budget

The next step is calculating how much house you can afford. You do this by working out what 25-28% of your gross monthly income is. This is how much financial experts say should go towards your mortgage payments each month. All of your debts, including your mortgage should amount to no more than 40% of your monthly income.

Decide on the Details

Once you know how much house you can afford it’s time for you to work out the details of where you would like to live. Do you have a certain town or neighborhood in mind? Do you want future kids to go to a specific school? Is this a starter home or a forever home? How many bedrooms do you want? This is the time to work out all those little details so you know what you are looking for in a home.

Work Out the Finances

Start interviewing loan officers from a variety of different financial institutions to find the one that works best with you then get pre-approved for a loan. This is also the time when you work out how much of a deposit you will be able to put down on your house. 20% is considered the minimum.

Find an Agent

Some people might decide not to work with a Real Estate Agent in the beginning but you will want an agent just in case something goes wrong. Remember, they are the experts when it comes to buying and selling a home.

View Homes

It’s finally time to start viewing homes. The recommendations always say that you should never look above your price range so you don’t feel disappointed by what is in your price range and that is pretty good advice. Be sure to check listings on a daily basis, arrange viewings for homes that you like the look of, and attend open house events.

Submit an Offer

When you’ve found a home that you love work with your agent to submit an offer. If your offer is rejected then start the process again. If you keep getting rejected talk with your agent about why that might be and how to fix it.

Apply for a Mortgage

If your offer is accepting this is the time for you to apply for a mortgage. If you’ve already got a pre-approval and nothing has changed in the time since then this should be a painless process.

Get an Inspection

Have the home inspected to find any issues there might be with the home that weren’t immediately obvious to someone with an untrained eye. This inspection might show some issues that will need to be dealt with and could impact your mortgage.

Close the Sale

Finally, if all has gone well to this point the time will come to close the sale and make it final. The previous owner will sign over the home, the buyer meets with their agent and hands over the deposit and to sign the paperwork. Once this is done the home is officially yours!

Move In

The only thing left to do now is move in and start enjoying your home!

A Modern Example

Consider if you will the tourism industry. In 2019 tourism around the world was riding an all-time high and as a result, investing in an airline or even a hotel chain might have seen like a sure investment. It could have been tempting to jump into the deep end of the pool and make all your investments in the tourism sector. But, towards the end of 2019 the unimaginable happened, a virus spread across the world grinding tourism to a halt. No one could have predicted it and if you had put all your money into tourism you would have taken a big hit in your investments.
If you had instead diversified your income and had some investments in the tourism industry but you also had some in Zoom and in medical supply companies your portfolio would actually be doing very well. Yes, you would have taken a small hit on those airline investments, but it’s a much smaller amount than it would have been if all your investments were there. Plus, with Zoom and medical supply companies, you would have been seeing a significant increase. That’s the power of diversification.

How do You Decide Where to Invest?

When you begin investing I think it’s important for you to invest in a company you believe in and enjoy. If you love hiking then maybe look at REI or another outdoorsy brand. But then consider other things you love. Is there an airline you love flying with? Do you have a favorite brand of ice cream? Of course, you shouldn’t go into these things blindly, look up their stock performance, and see if it is a wise investment. But, starting out with investments that call to your heart is a great way to get your toes wet as well as make sure that you have diversified your portfolio from the very start. It can also be helpful to ask teenagers what things they’re interested in and invest in them. You never know when you’ll catch the next rising tech industry.

Conclusion

No matter how much money you have for investments you should be diversifying your portfolio by investing in a variety of different companies and industries. Doing so will not only help you weather unexpected downturns in a given area but they will also allow you to take advantage of sudden upswells too.

Babysitting

For a long time now babysitting has been one of those jobs that is reserved for teenagers, but why can’t adults get in on the babysitting action too? They can! If you have kids start out by getting in touch with their parents and letting them know that if they ever want to go out on a date night that you’ve started babysitting in the evenings for a small fee. Let people in your local Facebook groups know. You could even offer kid carpooling to school, to soccer practice, or whatever else you can think of.

Dog Walking

Just like with babysitting you can let your friends and neighbors know that you’re offering dog walking services. There are apps that help you arrange that, but those apps usually charge a fee so try to get clients on your own before you turn to the apps.

Fiverr

Fiverr is a website that started out with people offering to do small tasks like record a voicemail message for just five dollars. These days the jobs are worth more than just the fiver they started out with. Some examples are teaching lessons on how to do a particular craft, being an online personal trainer, or even being a personal stylist.

Freelance Your Day Job

What do you do for your day job? Is it something you could do freelance online? If you aren’t sure then do a Google search for “ [Your Job] Freelance Online” and see what results you get. Chances are, you’ll find someone online already doing it, so why can’t you?

Sell Mobile Photos

These days you don’t have to have fancy equipment or be a professional photographer to sell photos. A ton of apps have popped up in recent years that allow you to sell your mobile phone photos as stock photography.

Managing Social Media Accounts

If you love social media, and these days most people love at least one platform, then you should be getting paid to manage a social media account! Getting started couldn’t be easier. Look at your favorite local businesses and see who doesn’t do a very good job of maintaining their social media presence. Then either email them or stop by their business and offer your services for below the industry standard. You might get a lot of no’s but all it takes is one yes and you’re in the door.

Uber and UberEats

If you’ve got a car in good condition then why not get into driving? You can either drive around people with Uber or drive around food with UberEats. Some of the fantastic perks are that you can pick when you do it and how long you do it for. So in effect, you decide how much money you make doing it.

Start a Youtube Channel

Not every Youtube channel has to be a vlog documenting your entire life. You would be surprised what kinds of things people love to watch Youtube videos of. I’ve seen channels that just play the old music ringtones from old cell phones and others that just squish fruit. The internet is a strange and wonderful place, you never know what will make you money.

A shocking 80% of all Americans are living with debt hanging over their heads and feeling trapped because of it. But, people are starting to wake up and realize that there is another way of living. One that doesn’t include debt collectors and anxiety. A way of living debt-free. Getting there isn’t easy though and there are a lot of different methods for getting out of debt. There is one that has risen above the rest in the last couple of decades, the debt snowball.

What is the Debt Snowball?

The debt snowball is a method for paying off debt that has gained popularity in recent years thanks to celebrities like Dave Ramsey promoting it. The debt snowball looks at debt in a more emotional sense rather than just pure math. This is what millions of people who have done the debt snowball method claim as the reason for their success when other methods of debt repayment have failed.

How does the Debt Snowball Work?

In other methods of debt repayment, you are taught to start by paying off the debt with the highest interest rate. But, this could mean that you are repaying one debt for years without really making any progress. Which leads to feeling worse about your debt, and sometimes just giving up completely. The debt snowball takes a different approach by having you start with your smallest debt first.

Begin by first making your minimum payments for all of your debts. The last thing you want is to get into trouble for not making those payments. After you’ve made your minimum payments any other money you have leftover goes towards paying off your smallest debt and you continue doing this until that smallest debt is paid off. Once you’ve paid it off then it’s time for a small celebration before you start on the next debt.

Once you move on to paying off your next debt you will still make the minimum payments for everything, and pay off what is now your new smallest debt. As you repeat this process you’ll start to see your snowball building up. When you knock out that smallest debt, the amount you’ll be able to contribute towards the next debt will be higher because you won’t have that minimum payment anymore. This will also allow the rate you repay your debts to increase as you go, making your snowball get bigger.

How Do I Get Started?

Getting started with the debt snowball couldn’t be easier. Make a list of all your debts and how much you owe for them. Ignore interest rates, who owns the debt…ignore everything except how much money is involved. Write this list in order of smallest to largest. This doesn’t include your mortgage, though once you’ve paid off all of your debt and you’ve got at least a 6-month emergency fund you can start paying off your mortgage faster than you would have before.

Once you have your list make yourself a budget. Most people budget 1 month at a time, but if you find that budgeting from paycheck to paycheck works better for you then that’s ok too. The important thing to do is to give all of your money a job. This is how you know how much money you will have for paying off debts. Part of that calculation will include the minimum payments for your debts. Whatever money you have left after paying bills, buying food, and making minimum debt payments is what you put towards that smallest debt.

It’s practically impossible to do anything these days without a good credit score. But, 15% of your credit score comes from just having credit history, which means that young people are starting out at a disadvantage. Thankfully, there are some things you can do to help your child develop their credit score before they’ve moved out of the house.

Open a Savings Account

It’s never too early to start teaching your child about money. One way to do this is with a child’s account in a bank or credit union. Encourage them to save their allowance, money they get on birthdays, and any other money they end up with. While this won’t impact their credit score now, it will set them up for a lifetime of good money habits. What age you can start this depends on which bank you go to so shop around your local banks and credit unions.

Add Your Child to Your Credit Card

When your child heads into their teen years it is possible to add them to your credit card as an authorized user and this will help them start to develop a credit score. Of course, it’s important that this credit card be used wisely and gets paid off in a timely fashion or else it will start negatively impacting your credit score and theirs.

Co-Sign on a Loan

This is perhaps the riskiest suggestion for your own credit score. Co-signing on your child’s loan will help them be able to secure a loan that if they pay back as they are supposed to will help them with build credit. However, if they stop making payments on that loan then you will be responsible for paying it off.

Encourage them to get a Student Credit Card

If your child is going into college encourage them to get a Student Credit Card. These cards are designed specifically for college students in mind. This means they don’t have very high credit requirements to get approved for it.

Help them Save for a Secured Credit Card

If your child isn’t going to college, or they can’t get a Student Credit Card for some reason then a secured credit card might be the right option for them. A secured credit card requires you to save up a certain amount of money to get the credit card. The card is then available to them, typically in the amount that they saved up. So, if you saved $500 to get a secured credit card, you would have $500 in credit on that card.

Open New Forms of Credit (Cell Phone, Utility Bills)

Another way to build credit when you’re young is by getting a cell phone you pay for monthly and having utility bills in your name. Being able to show that you can faithfully pay all of your bills every month is a great way to develop your credit score. Of course, this isn’t very easy to do if you’re still living at home with your parents and it means that you can’t be on the family cell phone plan anymore. But in the long run, it will be worth it.