We may have a tricky year ahead of us, so what’s the best and easiest strategy for consistent success in 2018?
Start the year with or without New Year’s Resolutions, but commit to success this year by paying attention:
#1. To how well informed you and information sources you rely on are
#2. To what’s really going on around you — real and fake, and
#3. To how you react to what’s going on around you — online and off.
Whether you are a real estate owner or a wanna-be… whether you intend to buy or sell in 2018, so much is shifting in real estate, in the economy, and everywhere else that nothing should be taken for granted or assumed in 2018. Concentrate on getting the facts not just someone else’s bias view of where advantages lie for you.
#1. A lot changed in 2017 and the full implications of those changes will continue to emerge in 2018.
Pay attention to ramifications and compromises, subtle and otherwise, attached to changes in everything from tax law and net neutrality to technology’s continued re-write and disruption of much we’ve take for granted:
#2. Whoever or whatever you blamed for distractions in 2017 will be with you in 2018 and might even be worse.
There are only so many hours in the day and only so many dollars in your pay check. Distractions that erode concentration on your needs and goals, and distractions that feed impulse spending will be expensive in many ways. Pay attention to what takes you off point, off track, and off goal to ensure you stay in control. You may blame others for distracting you, but it’s your powers of concentration that should be continually honed and improved to keep you ahead of the pack.
#3. Significant amounts of what you believed you knew in 2017 about real estate, finance, insurance, home security, mortgages, work, and the internet will be out of date in 2018.
Pay attention to which laws, regulations, services, and real estate expenses have actually changed not just been endlessly, sensationally rehashed in the media and online. Accurate information and clever strategies are gold.
Let’s meet the challenges and opportunities of 2018 head on!
Paying off debt in the new year is a common resolution. But resolving to do something and actually doing it are two different things.
Taking a smart approach to building good habits, however, can help you master your debt in the coming year.
Jon Bailey, professor emeritus in the psychology department at Florida State University, suggests applying some principles of behavioral psychology to help you create sustainable habits.
“Our general approach is really from the angle of self-management,” Bailey says. “You have to know yourself and your environment so you can put some things in place … (to) make the behavior, in this case paying off debt, more likely to occur.”
With this in mind, here are tactics to help you follow through on your debt resolution:
Create an inventory of your debts, including their totals and interest rates. Add them up to see exactly how much you have to pay down.
Defining your goal can help you focus your payoff journey and see what being debt-free would look like, says Weslia Echols, an accredited financial counselor in Michigan. “Seeing that picture clearly and knowing the value of not having that debt can motivate you to stay the course.”
Focus on the day-to-day steps needed to achieve your goal.
►Figure out how much you can put toward your debt each month.
►Choose how you’ll approach paying off debt. Consider using the debt snowball method, in which you pay off smaller debts first to secure early victories that will keep you motivated.
►Trim expenses to find more money for debt paydown.
When making budget cuts, Bailey sees moderation as key to success. “If you go out to eat four nights a week, see what you’d save by only going out three nights a week. The extreme — cutting out going out entirely — isn’t going to last.”
Track your progress and create a backstop to help you stay focused, such as updating a friend about your progress each month. Think about using an app to help you cement your new habits.
Consider imposing a penalty if you don’t stay on track. For example, make a deal with your accountability partner that if you skip a payment, you’ll have to clean their apartment.
Build in rewards as you make progress. Each $100 you pay off, for example, give yourself some small treat to celebrate. This can keep you encouraged and on track toward paying off your debt in the new year.
Sean Pyles is a personal finance writer at NerdWallet. Email: email@example.com
Follow this three-step process to help you determine how much you should spend on a home.
In order to determine the mortgage payment you can afford, you need to first prepare a budget. It is critical to include the proper short-term savings and long-term investing in your budget before you establish the amount to allocate toward a mortgage payment. While owning a home can help build your net worth, it is an extremely illiquid asset that is not easily converted to cash. You should make certain that you have enough in short-term savings to pay your mortgage for at least six months in the event of an unforeseen financial setback. Also, make certain not to reduce your long-term savings goals for things such as retirement or your children’s future college education expenses.
The good news is many of your budgeted items will not change with the purchase of a new home. For example, dining, food, clothing, and travel expenses will likely remain as they were before the move. However, some items like homeowners insurance, lawn care, pool maintenance, HOA dues, and utilities may increase when you purchase a residence. Property taxes will also likely increase, so just plugging in the amount the current owner pays may result in errors. If your purchase price is higher than the value listed on the tax rolls (as is commonly the case), you should recalculate the property tax based on the purchase price you will pay. It may take up to a year for the taxing authority to update the tax rolls, but eventually the purchase price will be used to determine your property tax due.
Economists say to expect more people to be looking to buy homes in 2017 despite higher mortgage rates. Sean Dowling (@seandowlingtv) has more. Buzz60
Once you have prepared a new budget, it will become apparent how much of a mortgage payment you can afford. If the amount you can afford is less than the amount you want to borrow, it may be necessary to adjust other budget items. Focus on reducing discretionary (non-essential) expenses. For example, you might consider reducing the amount you spend on vacations, entertainment, dining out, hobbies, and even your monthly television subscription so you can allocate more toward your new home. It is also a good idea to shop around for your auto insurance policy at the same time you are getting new homeowner insurance. Bundling these two policies with the same insurance company can often reduce your monthly premium by as much as 20%. All of these little changes to your budget can add up to a tidy sum that can help you purchase the home of your dreams.
Buying a home is no small feat, and there are many financial ins and outs to navigate as you prepare for this step in your life. As parting tips, don’t forget that you’ll need cash for your down payment (which will also influence the amount of your loan), and it’s helpful for you to check your credit report before speaking to a lender so you understand whether your lender will view you as a high-risk or low-risk borrower. Planning is key, and the more thought and energy you put into the process ahead of time, the more smoothly the home-buying process will go.
Clark Randall, Credit.com
Wire fraud is a growing issue for consumers and financial institutions involved in real estate transactions. It’s an area that Congress should focus on as it affects consumers in every state in America.
On Wednesday, the Financial Institutions and Consumer Credit Subcommittee of the House Financial Services Committee held a hearing to examine compliance with the anti-money laundering (AML) provisions of the Bank Secrecy Act (BSA). How is wire fraud related to the BSA/AML and the hearing? According to ACAMS Today, the leading publication for career-minded professionals in the financial crime detection and prevention field, criminal activity related to fraud generates money that needs to be concealed and legitimized. Where there is fraud, there is money laundering.
The FBI says the number of wire fraud scams reported by title companies to the Internet Crime Complaint Center (IC3) spiked 480 percent in 2016. According to the FBI, perpetrators monitor real estate transactions and time their fraudulent requests for changes in payment type (frequently from check to wire transfer) or changes in payment destination to a different account under their control.
There are two common wire fraud scams. The first is known as Business Email Compromise (BEC). This scam targets businesses working with suppliers and/or businesses that regularly perform wire transfer payments. The second is called Email Account Compromise (EAC). This version of a BEC targets individuals who perform wire transfer payments. The FBI said that these scams have been reported in all 50 states and in 131 countries. Victim complaints filed with the IC3 and financial sources indicate fraudulent transfers have been sent to 103 countries. Criminals sought to steal roughly $5.3 billion through this fraud.
ALTA is working with lending and real estate industry groups to increase awareness about wire fraud, identify and promote industry best practices to deter wire fraud and advocate for steps the government can take to protect people from hackers. ALTA also has several suggestions for various players in the industry that could help cut prevent these devastating crimes.
Real estate and mortgage professionals should alert homebuyers at the outset of the transaction to never open unsolicited links or attachments, to avoid sending any sensitive financial information by email and to use an independently-verified phone number to confirm wiring instructions for their earnest money deposit or down payment.
Businesses should follow these best practices and contact law enforcement immediately if fraud is suspected, especially by reporting wire fraud.
In addition, Congress should consider increasing criminal penalties for wire fraud to be as tough as criminal penalties and sentencing guidelines for identity theft and bank robbery.
Finally, a simple change in practices can be the single biggest deterrent to wire fraud: When sending a wire, financial institutions should match the payee’s name with the account number.
Consumers and businesses with an increased awareness and understanding of the BEC/EAC scam are more likely to recognize when they have been targeted by fraudsters, and are therefore more likely to avoid falling victim and sending fraudulent payments.
BY DANIEL MENNENOH, OPINION CONTRIBUTOR
Long-term U.S. mortgage rates barely moved this week after rising last week for the first time in five weeks. The benchmark 30-year rate remained above the key threshold of 4 percent.
Mortgage buyer Freddie Mac said Thursday the average rate on 30-year fixed-rate home loans ticked down to 4.02 percent from 4.03 percent last week. The rate stood at 3.66 percent a year ago and averaged 3.65 percent in 2016, the lowest level in records dating to 1971.
The rate on 15-year mortgages was unchanged from last week at 3.27 percent.
The steady mortgage rates came amid a cautious market. With the economy on solid footing and unemployment at a near-decade low, the Federal Reserve remains in the midst of a campaign to gradually raise interest rates from ultra-lows. But this week, the Fed took a pause, keeping its key short-term rate unchanged after having raised it in March for the second time in three months.
Despite the low borrowing rates that could lure prospective homebuyers, the housing market has remained hampered by limited supply, rising home prices and tight mortgage credit. The bad news for buyers is that the number of houses for sale has dropped to its lowest level in nearly 20 years.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for a 30-year mortgage was unchanged this week at 0.5 point. The fee on 15-year loans rose to 0.5 point from 0.4 point.
Rates on adjustable five-year loans edged up to 3.13 percent from 3.12 percent last week. The fee increased to 0.5 point from 0.4 point.
By THE ASSOCIATED PRESS WASHINGTON — May 4, 2017
We get it: Money resolutions can feel like a lost cause, especially if you’re already drowning in debt or saddled with uber-bad credit. But if the fear of falling short is stopping you from even attempting to reach any financial goals, well, it may be time to think smaller. There are lots of little steps you can take over the course of 2017 that, in tandem, can lead to ultimate financial balance.
Here are 50 ways to give your finances a fresh start this year.
1. Do your taxes ASAP
You’ll want to avoid taxpayer identity theft, which can delay a much-needed refund. Plus, an early refund can bolster your financial situation.
Jumpstart your emergency fund by setting up an automatic deposit or transfer into a savings account each month.
3. Give cash a try
If you’re prone to overspending on credit or debit, spend a week or two keeping only cash in your wallet. You can’t overspend cash — once it’s gone, it’s gone.
4. Ask for a raise
If you have a performance review coming up, or the opportunity to ask for a raise, now’s the time to take stock of your professional value and put together a pitch for better compensation.
5. Check your credit scores
You can’t know what to improve if you don’t know where you stand. You can get two free credit scores, updated every 14 days, on Credit.com.
6. Spring-clean your credit report
Do a major audit by pulling your free annual credit reports via AnnualCreditReport.com and dispute any errors you find with the credit bureau(s) in question. (You can go here to learn how.)
7. Re-evaluate your savings strategy
See if you can maximize your savings by opening an account with a higher annual percentage yield (APY) than your current one or consider a savings vehicle, like a money market fund or a Certificate of Deposit (CD).
While it can cost a lot at first, moving can be a long-term money-saving strategy. A good rule of thumb is to keep your housing expenses below 30% (or, ideally, less than 25%) of your income. Do the math and a little research to see if you can do better than your current rent payment. Make sure you factor any the expense of any increase in commute times to make sure it really would be a financially beneficial move.
9. Ask for a lower credit card APR
If you’re paying high interest on your credit card, see if you can’t talk it down. By negotiating down your annual percentage rate (APR), you could save serious money.
10. Get a balance transfer credit card
Look into moving high-interest credit card debt onto a new card touting a low-to-no introductory APR for the rest of the year (or longer). Note: Most issuers charge a balance-transfer fee.
11. Prioritize payments
Our favorite way to pay down multiple credit cards? Put as much money as you can toward the balance with the highest APR, while paying the minimum on your other plastic. That way, you’ll save on interest charges.
12. Consider a credit-builder loan …
If your credit is shot, which would increase your APRs, one way you can start to rebuild your payment history is with a credit-builder loan. You can look into credit-builder loans at your local bank or credit union.
13. … or a secured credit card
Secured credit cards, which require an upfront deposit that serves as your credit limit, are designed specifically for people who need to build or fix their credit. You can find our picks for the best secured credit cards here.
14. Figure out where the ‘right’ ATMs are
Every time you use an out-of-network ATM, you’re paying money to use your own money. Cutting back on those fees can really help you save in the long run.
15. Simply review your budget
How often do you look over your budget? If it’s been a while, start the year off fresh with a budget more customized to where you (and your finances) are today.
16. Scour your credit card statements
You could spot areas where you’re overspending. Plus, you’ll want to be on the lookout for fraud or billing errors.
17. Try a budgeting app
There are a lot of free ones out there that can track your spending, point out what expenses are really draining your bank account and alert you when you’re about to go overboard.
18. Eat at home
Dining out too often can put a serious strain on your wallet. Try cooking at home just a few times a week, and you’re sure to free up some money you can use to pay down debts or put into a savings account.
19. Plan your meals
Better yet, try planning out your meals several days or a week in advance, and set aside time to shop for and prepare them. This minimizes the chance you’ll dine out, which is generally more expensive than home-cooked food.
20. Cancel memberships
If you’re not using your streaming account, or don’t use it that often, go ahead and cancel it. You can always renew later if you decide you miss it, and you’ll free up money each month.
21. Review your transportation situation
Can you begin biking to work or ride with a friend to cut gas expenses? Perhaps walking to work a few times a week could help you save on bus fare.
If you haven’t already started putting money aside for retirement, this may be the year to start doing so. Added bonus: If your company matches any investments you make, it’s like getting free money for those golden years.
23. Look into a rewards credit card
If you charge a lot and pay those balances off in full, but only have a standard credit card, you may be losing out on rewards for your spending. Check your credit scores and see what types of cards you’d qualify for. You may even be able to get a rewards card that doesn’t have an annual fee.
24. Evaluate your rewards credit card
Already have a rewards credit card? Now may be the time to look at it and see what perks it’s offering you. Does your credit card reward you most for money you spend at the gas station? That’s great if you drive a lot, but if you’re taking public transportation or walking, there may be a better rewards credit card out there for you.
25. Negotiate with your creditors
If you’ve got outstanding debts, see if the creditor or collector will agree to a payment plan. (You can find tips for negotiating with creditors here.)
26. Clip coupons
Yes, it’s old-fashioned, but those weekly circulars from your local grocery store, and coupons from newspapers, mailers and sites like Coupon.com can really add up, especially if you hit double- or triple-coupon days.
27. Pay off a loan
If you’re nearing the end of your loan term, whether it’s for a car, student loan or something else, consider paying it off if you have the cash. You’ll cut out the interest you would’ve paid and, chances are, you’re paying more in interest for the loans than you’re making on the money if you leave it in your savings account until the bill comes due.
28. Review your insurance policies
It’s a good idea to review your insurance policies — whether it’s your home insurance, car insurance or any other type — to see if you’re still getting the coverage you need. Then, take that information and shop around to make sure you’re getting the best price available.
29. Ask more questions
Personal finance can be really confusing, so don’t be embarrassed if you don’t understand some of the concepts — even the seemingly basic ones. Commit to learning more about things like how credit works, your options for retirement planning or smart ways to use your credit card.
30. Set calendar reminders
Putting bill due dates in a digital calendar and setting up notifications will help you remember to pay things on time and save you the hassle of late-payment fees or damaged credit.
31. Set a savings goal
Think back on what you wanted to do last year but couldn’t afford. Was it a vacation? Buying holiday gifts? Build an emergency savings? Figure out how much you want to save, when you want to save it by and how much you have to set aside each month to reach that goal. Then do it.
32. Give up your vices or guilty pleasures
Do you put too many dollars toward dining out? Perhaps you spent too much on alcohol or cigarettes? Consider giving up these things (or at least cutting back on them) and using the excess cash to pay down debts, build up an emergency fund or save for a big ticket item.
33. Sell stuff you don’t need
Take a look around the house and see if there’s anything you’re not using. By selling your unwanted items, you can free up money to put toward your savings or paying down credit card debt.
34. Change your passwords
Protect financial accounts by changing up those access digits, especially if you’re using any of the worst passwords from 2015.
35. Comparison shop
Want to score a great deal? Search online and shop around to find the best deals on products. You don’t have to settle for the first deal you see.
36. Consult a professional
If your money situation is complex, a visit with a certified financial planner, credit counselor or certified public accountant may be worthwhile.
37. Turn your hobby into cash
Websites like Etsy have made it possible for thousands of people to sell their wares with little or no investment beyond the craft itself. So, if you make your own candles, scented soaps or other artisinal wares, consider setting up a shop.
38. Fill a piggy bank
At the end of every day, drop your loose change into a jar or other vessel — it doesn’t have to be a piggy bank per se — and do it every day. One of our editors tried this last year and had $285 in change by the end of it. That’s a nice dinner out, and then some.
39. Cut water costs
If you don’t already have low-flow shower heads and toilets, consider getting them. New toilets can be expensive, but you can cheat by filling a liter bottle with water and then dropping it in the tank so you don’t use as much water each time you flush.
40. Buy generic brands
Why pay full price for name brands when generics work just as well? Get in the habit of buying these, at least some of the time, and your wallet is sure to get fatter.
41. Make shopping lists
An easy way to save money is by making a shopping list before you hit the stores. Stick to it, especially if you’re shopping when you’re hungry, and you’ll avoid buying items you just don’t need.
If your credit has improved, see if you can qualify for a lower-rate on a mortgage, auto loan or private student loan, for instance. Just be sure to account for any fees associated with refinancing before you go ahead and do so.
43. Make your home energy efficient
It may cost more upfront, but little upgrades like installing a programmable thermostat can help you cut down your energy costs. You can find more ideas for making your home energy-efficient on EnergyStar.gov.
44. Use the library
If you buy a lot of books or music, try borrowing it from the library instead. As long as you avoid late return fees, you’ll end up saving a considerable amount of money.
45. Consolidate your credit card debt
Look into getting a personal loan, or debt consolidation loan, to consolidate debts you’re carrying on multiple credit cards. Depending on your credit, you may be able to secure a lower rate.
46. Live below your means
Spending less than you earn on a regular basis is one way to ensure you always have an emergency fund on hand. Borrowing less than you need — or at least not over-borrowing — will save you big on interest.
47. Reevaluate your tax withholding
Sure, a big tax refund is nice, but it indicates you were paying the government too much all year. Consider changing your withholding specification on your W-4 to get more money back on each paycheck.
48. Wait a day before buying
If you’re prone to impulse-shopping, institute a one-day waiting period before buying. That’ll give you time to evaluate if the purchase is a want or a need.
49. Pay your credit card more than once a month
Link your debit card account to your credit card account and then make a habit of paying down your balances once a week — or at least twice a month. That’ll help you avoid spending more than what’s in your bank account.
50. Skip the trip
Sure, an expensive vacation seems like a necessity, but, if finances are tight this year, opt for a staycation or an affordable road trip instead.