I’ve Paid For This Twice Already…

Frugal living and debt reduction tips for a better financial future. This is one family’s story.

Archive for the ‘budget’ Category

Cost Effective Housing Options For Veterans

Tuesday, January 21st, 2014

Living frugally is dependent on the way consumers are able to extract benefits from economic situations. Veterans are dependent on federal incentives to manage their fiscal routines. However, specific finance options are also available for veterans and they can be used for financial security.

Two financial authorities are particularly relevant to veterans: Veterans Administration (VA) and Federal Housing Administration (FHA). A recent reform paper on Housing Finance System analyzes the market since the recession and also looks at how legislative reforms have affected investors. The report highlights the role of financing through the Department of Veteran Affairs and mortgage backed securities from the FHA.

A congressional report on Veterans and Homelessness indicates that property acquisition within the community is a tough task and there is a need for better usage of incentives to manage financial affairs.

Veterans should therefore keep tabs on schemes and grants such as the 2014 FHA grant program, which was recently announced. Through this program, veterans can apply for government based incentives with regard to property ownership.

Two important incentives within the program are the Returning Veterans Grant Program and the Veterans Purchase Grant Program. Both grants are in excess of $7,000 and can serve as a viable financing option. The grant program is applicable to both serving and qualified veterans. The only thing to be checked is the income guideline, which is used as a yardstick to determine the amount of the grant.

With multiple options available for home buying and home loan options for veterans, there is a need for streamlining the incentives. The comparison should be made with respect to individual financial conditions and the kind of incentive that would be most rewarding.

Comparison of VA and FHA

Advocates of sustainable living is utilizing the best finance options. While both the VA and FHA facilitate property ownership, there is a need to make a cost benefit analysis.

The first thing to understand is that interest rates have been at historic lows in the last couple of years. This means that the market is conducive for buying, and both FHA and VA are able to provide mortgages/loans for veterans at lesser rate than general institutions. However, VA has a higher benefit rate, a fact highlighted by Lowvarates.com.

Another point is that VA loans need no down payment as opposed to FHA, where it is mandatory. Furthermore, the loan approval procedure is far less taxing owing to its specific nature.

Another factor is that VA loans are distributed through private entities, making the process competitive and cost friendly. Private entities would offer even further low rates. With low interest rates, benefits of VA are compounded greatly.

This is owing to the fact that VA is reserved for veterans and there are options to offer lesser rates than even FHA. The FHA, while being extensive, has to cater to other communities within the U.S. as well.

It is still true that home ownership is a tough ask within today’s economy. However, using appropriate routes such as VA programs, the process can be made easier and the fiscal situation of veterans can improve over the years.

This is a guest post by Katherine! Kat is an avid finance reader and aspiring blogger. Katherine’s usual writing topics are on her own personal finances and you can read more of her post on Veterans at Military Bases Blog!

How to Avoid Hazard Debt

Friday, July 12th, 2013

The last few years have seen an increase in natural disasters, such as hurricanes, tornadoes, thunderstorms, wild fires, and earthquakes. These types of disasters haven’t been relative to one area or another, but they do have one thing in common – they’ve managed to destroy homes, lands, and the lives of people who have affected.

The worst part about all of this activity is the people who manage to live through it with their lives, but not much else. Certainly, the fact that they managed to live through a flood or earthquake with their lives is great–heaven sent–and we should all be thankful that we can at least say we’re living to see another day. However, once you get over the fact that you’re alive to live another day, you’ll realize that you’re living without the comforts of the home you once shared and the things within.

When it comes to rebuilding your life, it’s not unheard of for people to fall into debt faster and further than they were before. Think about it – you have nothing left and unless you’ve managed to squirrel away enough money to replace everything that you’ve lost, chances are, you’re going to start from the very bottom rung all over again, especially if you are victim to a disaster not covered by insurance. That in itself can be devastating and may leave you unprepared for what you need to do next.

So how do you avoid losing your home and everything in it?

Well, as with everything in life, you can’t always be prepared against every matter that comes along. However, when it comes to making sure that your home is truly safe, you need to get a hazard disclosure report to know the full extent of the damage that your house is susceptible to.

What is a hazard disclosure report? In terms of real estate, it’s the disclosure that an area is within a natural hazard area; realtors are legally required to disclose this information.

In the state of California, realtors are required to tell their home buyers about areas that are flood, earthquake, fire, and seismic hazards. This is true for any area that might be prone to different types of natural disasters, including hurricanes. Knowing about the area that your house sits in will help to minimize the damage that you can expect. For instance, let’s say that while house hunting you find a home that sits right in the middle of a flood hazard area; you can ask what the likelihood of a flood hitting your house could be.

This can help you decide if you want to actively purchase the home or if you want to go about flood proofing it. Just remember that if you decide to purchase a home in a hazard area, that you’ll most likely spend more safeguarding it, assuming that a previous homeowner hasn’t done so already. Just because your home is a ways from say, a wildfire hazard area, doesn’t mean it is completely out of danger.

Make sure that you are aware of just how far – or close – you might be to a hazard area. As California, Arizona, and Colorado residents are aware, summer time is worst for wildfires, with fires sometimes blazing further than anyone anticipated. Even earthquakes can have after shocks miles further from the epicenter, make sure you’re prepared for all contingencies.

Staying Afloat Financially in Times of Crisis

Thursday, June 6th, 2013

While it is easy to keep a budget and save when things go according to plan, injury and illness quickly wreak havoc on even the most well-maintained finances. Medical bills balloon out of control easily. And, if injury or illness is severe enough, time off work may be necessary. If you cannot work to maintain a paycheck as you recover, medical bills and day to day living expenses may grow to an unmanageable amount rapidly.

Emergency Fund

Though it is never easy, maintaining sound financial footing in times of crisis is possible. You will need to create an adequate savings throughout your life to safeguard against unexpected expenses. While it hurts to draw funds from your retirement savings on unanticipated expenses, having an emergency account to pull from in times of crisis helps avoid incurring heavy debts.

Social Security

You pay into social security with the intention of getting paid upon retirement. However, if you become injured or mentally ill, you may be able to claim your social security benefits early. Approval for SSDI and SSI claims vary on a case by case basis, but generally you need to prove the existence of an impairment, either physical or mental, that prevents you from working.

Life Insurance

Like Social Security, some life insurance policies will pay out in the case of traumatic injury. Check and update your life insurance policy to ensure that you are covered in case the unthinkable occurs.

Workers Compensation

If you experience injury on the job, you might be entitled to Worker’s Compensation. Worker’s comp insurance provides wage replacement in the event that an on the job injury prevents you from continuing to work.

Secondary & Supplemental Insurance

Primary healthcare insurance will cover a large portion of your medical bills, however secondary insurance companies like Aflac also provide insurance money to pay for cost of living expenses like food, rent, and utilities in the event that you are temporarily out of work due to injury. If you participate in high risk hobbies like skiing or motorcycle riding, carrying supplemental insurance can keep you afloat should you incur a severe break or knee injury.

Negotiate Bills

While medical bills easily grow out of control, most hospitals have payment programs and grants to help those who cannot pay out of pocket beyond their insurance coverage. Before condemning yourself to a lifetime of medical debt, call the hospital bursar to see if arrangements may be made to pay over time or if costs may be reduced.

Do negotiate your bill ahead of surgery if possible, or at least promptly once an invoice arrives. Late fees can easily double and triple your medical cost if bills are not resolved in a timely fashion.

Once your invoice arrives, be sure to check it for accuracy. You may be able to reduce your out of pocket costs by making certain your are not overcharged for procedures and that your medical coverages has been appropriately applied.

If the unthinkable happens and you become unexpectedly injured or ill, take care to exercise all of your financial options. Quick response and research of your financial options give you the opportunity to keep your financial situation up right even during trying times. The sooner you address your financial challenges the less likely you are to incur penalties or find yourself under water.

Take proactive steps to insure that you keep your finances in check. If you find yourself struggling to understand terms or procedures, enlist the help of a professional to help you stay on course.

4 Smart Ways to Spend Extra Cash

Friday, April 19th, 2013

So you finally went ahead with the decision of putting yourself on the budget and you see that extra cash trickling in each month. Now depending on what type of financial goals you have in your budget, there are many, many options. Each of these options could be good or bad to you in their own way. So what do you do? How do you avoid the confusion? Let’s look into a few constructive ways to use that extra money effectively…

#1: Pay Down Your Credit Card Principle

You know how it’s super-annoying to keep paying on a monthly basis and still not see your credit card debt disappear? So instead of just sticking to that, use your extra cash go above and beyond your minimum monthly payments. Every little step that you take towards your debt-free goal will help you achieve it sooner. Remember, the extra money you have should be used constructively so that you’re able to live a life with peace of mind.

#2: Start Your Own Rainy Day Fund

There are times and situations when things happen unexpectedly. It could be you losing your job, facing any life emergencies or having your car break down. By having savings saved with you, you actually make things easier for yourself. Your rainy day fund typically should be able to pay your living expenses for at least 6 months. It’s okay if you already don’t have that much saved at the moment because it obviously takes time/effort. However, considering that fact that more than 25% American works don’t even save anything, you’re already ahead by saving whatever little you are right now.

#3: Do Some Minor Home Repairs

Upping the value of your house should be one of your topmost priorities. Regardless of what your goal is in the long run, you should do things to improve the house’s value in the long run. And carrying out some small home repairs and fixing around your home will definitely help in increasing its value. But besides this obvious benefit, there could be other reasons too. For example, when you fix your leaky window casements, it can help you save cash on your utility bills. This is a good way to put your money to effective use, without having to worry that it’s getting wasted.

#4: Carry Out Smart Investing

A lot of people tend to ignore the power of investing. It’s a smarter way of saving. Just the way car insurance helps you get peace of mind, the extra money you have can be put to good use and help you get returns if you use it properly. Right from sending your extra cash to your 401(k) to opening a Roth IRA, you can do some intelligent investing and improve your chances of having a financially secure future. Even investing in a mutual fund works great. All of this helps in contributing each month. And as always, consistent saving over time will definitely pay off big time.

There you go! Simple and easy ways to not only spend extra cash that you might have and get the best returns on your investment. So what are you waiting for? Go ahead and start spending the smart way!

Moving Due to a New Job – Financial Pitfalls

Thursday, March 14th, 2013

This is a guest post written by My Moving Reviews, they can help you find a mover that you can trust if you do have to move!

As a whole, moving is considered as the third most stressful experience right after events like death in the family and divorce. People move for various reasons, but mostly due to a new job. When you are offered a new career opportunity far from your home, inevitably comes the question: “Should I accept and move?” In order to make a sensible choice whether you should move, you should take into consideration all of the aspects involved in such endeavor, not just a couple of the factors. Like in every other decision in our life, pros should outnumber cons, otherwise instead of beginning a fresh story with enthusiasm and confidence, we might find ourselves in a woeful story feeling so frustrated.

Salary And Living Standard

Moving for a job doesn’t necessarily mean that you will make more money and have a better standard of living. You are offered a bigger salary, and you accept the job offer without considering the cost of living in the area you will live – do not take that risk. Another mistake you should avoid is not supplying enough financials for a couple of months ahead. People who have lined up a good job before the move tend to be too confident. When the fine line between confidence and cockiness is crossed, bad things happen, figuratively speaking. When you have secured a steady income, that doesn’t mean you should ignore the “saving-money step” of the relocation process.

Switching Properties

Other moving related tasks that have to be taken care of concern the properties – the one you will leave and the new one you are moving in. There is not much to be discussed if you are renting the old place, but the fact that you have to notify your landlord in a timely manner and deal with the paperwork. On the other hand, if you are selling the property, keep in mind that you will have to pay brokers’ and lawyers’ fees. Also, an extensive research on the real estate market in the new area should be done. A common mistake that people who move due to a job make is rushing to buy a new property instead of renting at first. Sometimes, making a great deal means you have to wait a bit. Furthermore, getting familiar with the new environment will help you decide which neighborhood to choose to settle in.

Finding Reputable Movers

Moving is not a one-day job, but many people seem to approach it as a one-day engagement. If you don’t research movers, you can end up dealing with an unscrupulous and rogue moving company. This causes not only a lot of distress, but financial blunders too. Damages caused by movers might estimate in thousands of dollars. A moving company have to be registered with the Department of Transportation in order to operate legally. In some states like New York, Texas, California and Massachusetts additional certification is required by the local authority. When selecting a mover,  look up their online reputation, read reviews and check the BBB record. Reading carefully the moving company’s paperwork before the moving day can ensure a safe ride for your belongings as well as make you aware of the possible problems that may occur between you and the mover. A very important and often forgotten precaution is purchasing insurance for the valuables. People usually confuse liability with insurance. By federal law, basically movers assume liability for no more than 60 cents per pound per item. In order to move a home cost-effective, you should get acquainted with all the potential moving related costs. Movers usually give price estimates for the moving service, but exclude fees for stairs, shuttle, long carry, packing labor, packing materials, hoisting, fuel surcharge and other small additional expenses in the initial quote. Many consumers find out about these fees no sooner than the moving day. If you want to manage the financials of the move successfully, full tariff should be required with all the company rates.

Cost Of The Move

The major cost-forming factors for interstate moves are the total weight of the household belongings and the packing services. To find out more about the average price, make sure you get an estimate, especially when moving a long distance. When moving locally (within the same state), moving companies usually charge per hour. In that case, factors as the number of stairs and the traffic between the both locations could greatly influence the price. And if the move is an overseas one, moving costs depend on the cubic feet. Plus, Customs’ fees apply and amplify the final cost of the moving.

The average cost for a long distance move such as move from New York to California for a 2 bedroom home is about $5000 – $6800 and this does not include the packing. The total cost for a full service move could easily go to about $7600. The major cost-forming factors for interstate moves are the total weight of the household belongings and the packing services. When moving locally (within the same state) moving companies usually charge per hour. In this case, factors as the number of stairs and the traffic between the locations could greatly influence the price. Moving a 2 bedroom home 20 miles away could cost about $900 to $1500 if packing service and packing materials are included. And if the move is an overseas one, moving costs depend on the cubic feet. Plus, customs’ fees may apply and amplify the final cost of the moving.

__________________________________________________________________________________________