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Archive for the ‘Extra Money’ Category

Now comes the hard part: living according to your budget. Having a budget is meaningless if you and your family aren’t going to stick to it. Sticking to your budget won’t be easy, but keep your eye on the prizes: less financial stress, fewer debts, less damage to your credit history, and (eventually) more money to spend the way you want.

As you go through each month, be mindful of every dollar you spend, every check you write, and every time you use your debit card or go to an ATM machine.

Cut up your credit cards, or use them only in emergencies. Refer to your  udget regularly to make sure you’re staying on track. If you find that you  have overspent in one area, try to compensate by reducing in another area.

If your kids ask for things that you haven’t budgeted for, remind them why your family is trying to spend less. If they’re older, maybe they can earn the money they need for what they want.

Carry a small notebook or some other small record-keeping device with you for writing down everything you purchase with cash, a debit card, or a credit card each day. Keep all your receipts as well. You’ll need this information at the end of each month when it’s time to evaluate how well you’re doing.

Keep in mind the risk of house poverty — when your house and the related expenses (mortgage payments, taxes, insurance, home and yard maintenance, and so on) swallow all your expendable income. You may have a nice house but not much of anything else to show for your hard-earned money.

If you make the big decision to buy a house, be sure to buy within your means. You want balance in your life, not just a bigger house. An occasional vacation, money for education, a fun evening out with your spouse or friends, furniture, a retirement account — these considerations can end up by the wayside if you buy more house than you can reasonably afford. Be careful when you’re house hunting. Real-estate agents and lenders often try to convince you to buy as much house as possible, but they obviously have a vested interest in seeing you spend more of your money. The more money
you spend on a house, the more money ends up in their pockets.

Don’t assume that just because you don’t have much money set aside for a down payment, you aren’t eligible to buy a home. Ask a real estate agent about home-buying programs available in your area that allow a smaller down payment.

These programs are more common for first-time home buyers. Several options also exist for low-income buyers, so don’t let a lower income scare you away from looking into buying options. Ask conventional lenders whether they offer mortgages with low down payments combined with programs like Fannie Mae or Freddie Mac, or other governmental or nonprofit agencies.

A new, traditionally built home is sometimes out of reach for the frugal person who wants to become a homeowner. But if you’re willing to investigate options like older fixer-upper houses or alternative homes (such as mobiles and prefabricated homes), you may find that home ownership is a real possibility after all.

Renting has several advantages over owning a home:

• Renting give you the freedom to move, if needed.
• Renting doesn’t saddle you with unexpected repair bills and general upkeep expenses.
• Rent in many apartment complexes also includes free use of an on-site gym, pool, and sauna, saving the cost of a membership at the local gym.
• Renting doesn’t require yearly property taxes.
• Rent of an apartment or condominium often includes the cost of some utilities, so you don’t have additional cable, water, or garbage bills to pay. The included utilities are also set at a flat rate.
• Renting an apartment usually doesn’t involve any yard or grounds maintenance costs (unless you’re renting a house).
• Renting may entitle you to a discount if you don’t receive something you’ve paid for. For example, if your air conditioner doesn’t work for a week, or you have to eat out a couple of days while a defective stove is replaced, the property manager may reimburse you for some of the rent you’ve paid that month.
• Renting requires a small upfront investment, compared to a house down payment. If you don’t have enough money put together for the first and last month’s rent and the usual damage deposit, check around. Some apartment complexes offer the first month free for new renters or don’t require a deposit if you move in by a certain date.

One way to save money on rent, and maybe even qualify for free rent, is to become a property manager for an apartment complex. A property manager shows vacant apartments to prospective renters and oversees the general maintenance of the property. Many times managers take care of the on-site office work, as well. Look in the classified ads for apartment manager listings.