Bits & Pieces

What’s happening, personal finance buddies? It’s been a good while since my last Bits & Pieces post, so I’m sharing a new one today!

cool piggy banks for adultsPinterest – I’m in love with Pinterest! It’s so much fun to see fresh content and share posts. I love seeing what pins get repinned – like this pin for cool adult piggy banks! So fun. Follow me on Pinterest here.

Spending – Remember how I planned to keep my spending to $1,750 a month in 2015? Keeping my life frugal but fun? Well, March has not gone according to plan. Spending has been out of control this month. To the point I’m almost scared to do my monthly recap of spending.  Hoping it’s just a one month thing!

Temp jobs – I’ve worked a couple part time temp jobs over the last month to make ends meet. Turns out starting a business can be slow. Revenue isn’t exactly flowing in but bills don’t stop. Enter: temp jobs! Some have been good, some less so. Either way, I’m keeping my head afloat with blog income, freelance clients, temp part time jobs, and business income. But overall? I’m getting pulled too thin in too many directions. Hoping to focus on just a few things soon!

Blog Reading – Here are a few posts I read and enjoyed this week:

  • Becoming a millionaire by Mr Every Day Dollar. Really interesting perspective and tips on becoming a millionaire.
  • 19 Reasons Why We Still Drive a 19 Year Old Car by Cash Cow Couple. Great post and it really made me miss my beater car. I love my new car which is great because I’ll be driving it for about 10-15 more years!
  • We rent this life by Frugaling. Great post and excellent reminder. Ownership is a big concept in our society but the reality is that life is fragile and short and has no guarantees. You don’t take any of your stuff with you at the end.
  • What if I spent money like 90% of Americans? by Life and My Finances. Interesting post. I totally agree though… I’d have a lot nicer stuff if I wasn’t dedicated to saving money!

Hope you all have a great weekend! I’m off to read some blogs and leave comments. Leave me a link below if there is a post I should read this weekend!

How Much Money Should I Save Up For A House?

how much should i save up for a house?I’ve been thinking a lot about the home buying process lately since I’m gearing up to buy a house in the next year or two. It’s something my boyfriend and I eagerly anticipate doing together and talk about often. After my first house buying experience I’ve learned a lot and am much more prepared t0 jump into home ownership.

Since buying a home is one of the largest purchases a person will even make it’s one that should be carefully planned for and free of mistakes. A mistake when buying a house can be one of your most costly mistakes ever made. That’s why I’m learning and sharing as much as possible about the process so I don’t make a mistake and hopefully others in the same stage of life don’t either.

Below are the things you might want to consider when deciding how much to save up for a house.

What will you have to pay for when buying a home? 

There are a lot of expenses that come with buying a house, including a lot of unexpected expenses. All of the expenses associated with buying a home should be considered and budgeting for when decided what amount of house you can afford. Being prepared for all these expenses will make the process a lot easier.

For example, you’ll have to pay for all of these items:

  • House price – The price of the home you purchase is the largest expense and the first one you should consider. Make sure you think about the interest rate on your mortgage in this number too because it’s not just the initial price that you will be paying.
  • Property taxes – Depending on where you live your property taxes could be rather high. Before offering to buy a house check on the property taxes for that specific house. You might pay $2,400 a year more for a house located in a city while a house 5 minutes down the road costs less in property taxes each year just where it is located. This is definitely a budget item to consider.
  • Home insurance – You will have to properly insure your home against the unthinkable. Make sure your home is covered for any additional needed insurance above the basics to cover things like earthquakes and flooding.
  • Utility bills – This can be hard to gauge before buying a home but it’s a good idea to get a general sense of how much it will cost you each month for utilities in a home. You can call your local utility provider and ask for the average bill over the last 12 months for the address. I do this every time I move because it helps to know what I’ll have to spend to get basic services.
  • And more – This list could go on and on! when closing there are inspection and closing fees. When moving in there are moving expenses and new furniture purchases. Then there are home repairs and yard maintenance and so on. There are a lot of things to consider so sitting down and writing everything out will help you consider what you will have to spend.

Make sure you remember all the extra things when buying a house.

How much money should I spend on a house?

It’s a hard question to answer for someone else. It depends on a lot of personal factors like the area you live in and your income levels.

Generally people are told to take out a home loan that is around 25% to 30% of their after-tax take home income. Spending a third of your income on housing is an acceptable amount that is widely encouraged by financial advisors.

In my city there are lots of adorable homes in the range of $90,000 – $110,000. Based on two incomes I will probably end up purchasing a home somewhere in that range. Since it’s a ways off there is still a lot of time before deciding on the exact number to spend on a house. I will definitely have a more exact and very strict budget before actually buying a house. It helps to have a budget for home spending before even looking at houses.

I’d also suggest spending way less than you are approved for when buying a house. The last house I planned to buy was roughly half the price I was approved for and I thought that was a very reasonable and cute house. You don’t have to max out your budget and spending capability when buying a home! Do what feels right and give yourself some spending breathing room.

how much should i save up for a house?

How much money should I save up for a house down payment?

Currently I’m working on saving up for a house down payment. It’s a small fund currently and grows just a tiny bit each month. This is going to be my number one goal for 2015 and I plan to stash away as much as possible in this account. This money will be combined with my partner when we decide to buy a house together. Hurray for the power of two people saving!

Depending on the lender, and the state of the economy, you can put down as little as 2.5% on a home, or you can be asked to put down 20% to 30% of the purchase price. How much money you put down on a house will depend on what you lender requires and how much you can afford.

The standard minimum is usually 20% and this will prevent you from paying PMI, private mortgage insurance. Adding that expenses can make a home unaffordable so it’s often best to avoid it.

Let’s say I plan to purchase a home for a likely price of $100,000. This mean the down payment I will want to put down is $20,000. That’s a pretty big chunk of money in my world so we will see if I can get that amount saved up or something close to it. At the very least I plan to put down 10% on the house. I’m working on saving money for a home over the next few months so I’ll post in the future about the specific ways I’m making that happen.

How much money did you save up for a home? What percentage down payment did you make?

Financial Essentials For College Students

My youngest brother started another college semester this past week. He has been lucky enough to benefit from the experience and knowledge of his older siblings who have already gone through the college experience and is graduating better off than many of us did.

Financial Essentials for college students -

Unlike my brother, I did not have the advantage of sage advice when I went to school. I didn’t know what I was doing or any tricks to help save money during and after school. I tried my best but most of my financial education came after college when I was scrambling to find work and pay down my student loans.

Financial Essentials For College Students

Here are a few of the things that I think are essential for college students to have or gain during their time in school. It’s an important period of growth and getting these financial essentials in place will help you move through college and enter the working world with ease!

A working knowledge of personal finance.

best books to read when getting out of debt

The biggest thing college students can do to help themselves is learn about money and how it works. Ignorance will lead you down a lot of bad paths so take the time in college to learn about personal finance. Sign up for free educational sites, read personal finance blogs, or take a class about personal finance at your school. Read books about getting out of debt and read books about your career. No matter how you do it, start getting educated about your money. It will really help you thrive when you start your first major job out of college.

A scholarship search.

financial essential for college students - scholarship search

If you are just starting college or planning to go to grad school, you need to do a scholarship search. Then apply. Then apply again! Every scholarship you win and apply to your tuition is money in your pocket, so doing a thorough scholarship is worth the time and effort. There are lots of site that offer scholarship database searches to try hitting several to find the scholarships that might apply to you as a college student.

An Amazon Student Prime membership.

amazon prime for students - financial essentials for college students

Amazon Prime is amazing and they offer a special Prime account for students. I recommend college students take advantage of it for the free 2 day shipping, ability to buy or rent cheaper textbooks, and savings on other life essentials. You can buy almost anything on Amazon and it’s almost always cheaper. You can even get a free 6 month trial buy clicking here.

A swag bucks account.

things college students need - swagbucks is a completely free to use website that allows you to earn points that can be redeemed for cash or gift cards or products. It’s a college student’s dream because you get things for doing stuff online you already do like searching, playing games, and shopping. You can use a Swagbucks account daily to earn points that can be redeemed as cash or gift cards. I always use my swag bucks to get free Amazon gift cards. This pairs perfectly with an Amazon prime account giving you even more savings which is really useful as a college student buying textbooks and essentials online.

A Credit Sesame account.

get your free credit score at credit sesame

You might not know it when you first get to college, but this is a time when you’ll start developing a credit score that will affect your life later. Your credit score is important to getting a job, renting an apartment, buying a car, or buying a house. For all the major goals you’ll want to achieve after college you’ll need a good credit score. Sign up for a Credit Sesame account to check and monitor your credit during college so you’ll know where you stand and what you need to do to improve.

A plan to pay off debt.

readyforzero review

I started using ReadyForZero years after college but it’s the perfect tool for students to use early on even before graduating. You can sign up for a free account and get a plan in place to pay off debt once you graduate. Creating a plan to pay off debt before you graduate will get you off to a great start in life. I promise you don’t want to bury your head in the sand regarding your student loans. Use ReadyForZero and their resources to strategize a plan for paying off your loans.

A job.

college essentials - a job

Whether it’s an internship, part time job, full time job, I think every college student should work while going to school. Working while you are in college gives you both experience to bring to the real world and money in your pocket for living expenses and fun activities. There are so many benefits to working while in college that a job is definitely an essential for anyone in school.

Those are just a few of the financial essentials I think college students should have these days. Like my little brother, college students today have the benefit of learning from others and taking advantage of lots of great tools and services. It’s easier than ever to learn about personal finances online and get a jumpstart on your working life while you’re still in school. Take the time to get prepared and position yourself for a successful college run and launch into the world!

Chronic Underearning

Recently I’ve been thinking about the lack of progress financially in my career. Being laid off a couple times I’ve not found better paying jobs but somehow convinced myself to work for less while starting a business. Despite having more experience and more skills than ever before, I’m not earning as much money as most of my peers. Though I hope it changes, I’m currently a chronic underearner.

This hasn’t been a problem I’ve thought about until lately when I’ve watched all of my friends and family pass me by in income. While I’m incredibly proud of them, I’m also left wondering…. what about me?

Chronic Underearning

are you am underearner? - underearners anonymousJ Money recently posted about underearning and introduced me to the concept of both underearning and a 12 step recovery program for underearners called Underearners Anonymous.

Underearners Anonymous describes underearning as such:

Underearning is many things, not all of which are about money. While the most visible consequence is the inability to provide for one’s needs, including future needs, underearning is also about the inability to fully acknowledge and express our capabilities and competencies. It is about underachieving, or under-being, no matter how much money we make.

This sadly describes me! Or at least how I’ve been feeling lately. I’m a chronic underearner and there is even a program that seems to describe me in this regard! Yikes!

Here are all the symptoms of underearning UA lays out (paraphrased by J Money):

  1. Time Indifference – putting important stuff off and not using time effectively to further your own vision and goals
  2. Idea Deflection – compulsively rejecting ideas that could expand your lives or careers and increase profitability
  3. Compulsive Need to Prove – even though you’ve demonstrated competence at your job/biz
  4. Clinging to Useless Possessions – holding onto possessions that no longer serve your needs
  5. Exertion/Exhaustion – habitually overworking, becoming exhausted, then under-working or ceasing to work completely
  6. Giving Away Our Time – compulsively volunteering for various causes or giving away your services free of charge without any clear benefit
  7. Undervaluing and Under-pricing – undervaluing your abilities and services and fearing to ask for increased compensation or for what the market will bear
  8. Isolation – choosing to work alone when it might serve you better to have co-workers, associates, or employees.
  9. Physical Ailments – sometimes out of fear of being larger or exposed
  10. Misplaced Guilt or Shame – feeling unease when asking for (or given,) what you need or owed
  11. Not Following Up – not following up on opportunities, leads, or jobs that could prove profitable. You begin many projects and tasks but often do not complete them.
  12. Stability Boredom – creating unnecessary conflict with co-workers, supervisors and clients, which generate problems that result in financial distress

Here’s where I am with all of these and why I think I can be classified as an underearner:

  1. Time indifference – I do this all the time. I am currently pushing off creating a product that would prove an idea and bring me income. I’m putting it off and not using my time to work on what I know is most important and would move me toward my goals. I didn’t realize how actively I was doing it until now!
  2. Idea deflection – Also do this all the time. I reject a ton of ideas, opportunities, etc that could help me and my career. Why? I don’t even know half the time.
  3. Compulsive need to prove – I do this as well, it comes from not feeling good enough or smart enough despite competently completing tasks.
  4. Clinging to useless possessions – I actually am getting better at this and go through and force myself to get rid of things not servings needs every couples months.
  5. Exertion/Exhaustion – I do habitually overwork. I work every day then get burned out and take multiple days off. Bad cycle.
  6. Giving away our time – This is probably my worst offense. Because I have skills that can help small businesses I’m always giving them free advice and services when really I should be charging way more.
  7. Undervaluing and under-pricing – Definitely something I’ve strugggled with in my business. I don’t charge nearly as much as I made when doing the same job for someone else.
  8. Isolation – Struggled with this recently because it is better for me to have co-workers or employees and while I wasn’t ready to hire, working alone 24/7 was detrimental to me.
  9. Not following up – Did this as well with a couple job intereviews and let some cool opportunities slide because of it.
  10. Stability boredom – Hello my middle name! I’ve had problems with this because of how I get bored with stable situations. Because of the way I grew up, I’m more used to instability than stability. When everything is going well I tend to do something ridiculous to shake it up, not always to my benefit.

Are you a chronic underearner-

How to improve chronic underearning

This is obviously something I still really need to work on as I work to build a business and more skills. Knowing you have room for improvement gives your the best chance to succeed.

Underearners Anonymous lists a bunch of tools to help you get better and earn what your worth. These are just some of the things they recommend to improve chronic underearning:

  1. Time Recording – We must be conscious of how we spend our time. We keep a written record to increase awareness and support our focus on goals and the actions required to achieve them.
  2. Meetings – We attend UA meetings regularly to share our experience, strength, and hope in order to help ourselves and others recover from underearning.
  3. Sponsorship – We actively seek sponsorship with someone who has worked the Twelve Steps in UA and is willing to guide us in our recovery.
  4. Possession Consciousness – We routinely discard what no longer serves us in order to foster a belief that life is plentiful and that we will be able to provide ourselves with what we need.
  5. Service – Giving service is vital to our recovery. It is through service to others, and to the Fellowship, that we keep what has been so generously given to us.
  6. Goals Pages – We set goals for all aspects of our lives, write them down, measure our progress and reward achievement.
  7. Action Meetings – We organize action meetings with other UA members to discuss our earning concerns and to generate actions that will bring more prosperity into our lives.
  8. Action Partner – We connect regularly with action partners regarding earning concerns in order to provide each other with accountability, continuity, and support.
  9. Solvency – We do not debt one day at a time. Debting leads to underearning.
  10. Communication – We contact other UA members to seek support, to diminish isolation, and to reinforce our commitments to action.
  11. Literature – We read Twelve-Step literature to strengthen our understanding of compulsive disease and the process of recovery.
  12. Savings – Saving money demonstrates faith in the future and acceptance of the fact that money is a tool vital to our prosperous vision. We create and follow a savings plan on whatever scale we are able.

I love this! These are all great ideas and some of the things I’ve worked on while blogging about personal finance. Things like no debt and savings and  One thing I want to work on is time recording and setting goals. I think both of these things will help a lot as I try to build a businesswork a part time job, write a blog and still have social media and blogging clients. I’m getting really busy but want to see financial results based off of being busy and I think that’s where time recording will help. Hopefully in the next few months I can work on a lot of these things and see my income rise. I’d really like to earn what I’m worth!

If you’ve struggled with underearning and charging what you’re worth, check out the Underearners Anonymous website. It’s got a lot of useful downloads and tips for things you can try doing to value yourself and time!