Your Money in the News ? Nov 20th

This week: spend less, skip stress and travel this holiday, money and kids, 7 questions to ask before your cash out refi.

5 Ways to Spend Less and Skip Stress this Holiday Season ??Forbes

The season of giving gifts is approaching, which means it?s time to rethink the ways we spend without breaking the bank this year. On average, Americans who added holiday debt added an average of $986. ?The overspending hangover is a painful reminder that budgets need to be in place before heading out to the mall. Here are 5 ways to rethink how you spend this season:

Set a holiday budget and stick with it.

Be mindful of your holiday spending habits and set a reasonable budget. In the end, it?s better to make the hard spending decisions before you start shopping, rather than waiting until you reach the checkout line. Set a price range for gift ideas and stick with it.

Find alternatives to common gifts you give friends and family.

Rather than spending money on material things, consider giving the gift of your time. Planning special events to go to like dinner and a movie are fun ways to celebrate without spending a lot of money. Pro-tip: ?Homemade gifts are a way to bring value into other people?s lives without breaking the bank. Consider making stress-melting lavender bar soap to keep friends and family calm and happy.

Amp up your side gigs this holiday season.

Making side money is an excellent way to stay on top of finances and save yourself from debt. Whether you work extra hours at your day job or get an online job using skills you already have, an additional stream of income will help to pay for holiday gifts, parties, and other expenses without dipping into your savings account.

Take inventory of items you don?t need.

There are some things in our lives that we simply don?t use anymore. Why not sell these items and get extra cash in return? Those baby clothes, that old desk, or the unused pool table are great examples of items that can be let go of. Whether you choose eBay to sell your items or have a yard sale, eliminate the items you no longer use and make room for more meaningful things in your life.

Make the payment, pronto.

In the event that you decide to make holiday purchases with your credit card, do not let the balance sit and accrue interest. Make a payment in the amount you budgeted for holiday gifts. If you come under budget and you have outstanding credit card debt, pay the full budgeted amount anyway. In the end, you will save money and pay down your overall debt faster.

3 Ways to Travel and Save this Holiday Season ? The Motley Fool

As the whirlwind of holiday visits approaches, is it possible to visit our families without breaking our budgets? The season of spending and celebrating with loved ones should not come at that kind of cost. Let?s explore 3 valuable ways we can travel this November and December without incurring any debt.

Let go of last-minute buys.

Waiting until last minute to arrange your holiday travel is a no-go. It could put you at risk of having to pay much more, or even worse ? not getting a flight. In fact, the prices for flights during Christmas tend to peak 10 days before the start of the holidays. Pro-tip: October is usually the best time to book your flights for Thanksgiving and December holidays (keep that in mind for 2018).

Be Flexible with flight days.

If you are willing to stay open to traveling outside of popular dates, (people usually want to fly in the day before Thanksgiving and leave the Sunday after) you can easily save $50 off the cost of your trip by simply departing the Thursday morning of Thanksgiving rather than the day before. Better yet, you can save over a $100 just by returning a few days after the weekend. What to do for Christmas time? Depart some time during the week leading up to the holiday, instead of leaving on Friday, December 22nd. Pro-tip: Avoid traveling on New Year?s Day. If you return a few days later, you could spend about $100 less.

Vying for a drive? Just carpool.

Is driving really less expensive than flying during the holidays? It can actually be just as pricey if you factor in the cost of gas, tolls, and pitstops. If you have people to share a ride with, however, you can seriously cut the cost. In fact, there are carpooling apps available to help you seek out travel buddies, split the cost, and save a bundle. Pro-tip: Plan ahead and save up in advance for big travel dates. Make sure to estimate your upcoming travel costs and even find a side gig to help save extra cash for these big expenses without breaking the bank.

6 Tips to Teaching Kids the ABC?s of Money ? The Economic Times

“Sometimes parents wait until their kids are in their teens before they start talking about managing money when they could be starting when their kids are in preschool.”
? Warren Buffett

The ?money talk? is something that does not seem to happen until the later years in life, but could budgeting skills be learned at a much earlier age? Because many schools do not include a personal finance curriculum, parents can use this an opportunity to provide valuable insight for their children and teach them how to save (ahead of time!) ?Here are 6 ways to slowly introduce your kids the world of finances:

Re-evaluate your relationship with money.

Children are like sponges and the actions we take are often emulated by the young. Our spending habits are no exception and when children see needless swipes of the credit card or hear endless arguments over money, it impacts their perception of finances and the world around them. Consider your money habits as a family and demonstrate what financial fitness looks like.

Make budgeting a team effort.

Including your kids in budgeting, conversations give them a better insight into what spending looks like and the consequences it can bear. Laying out a foundation for budgeting skills is a great way to prepare children for finances. Pro-tip: Encouraging the possibility of a part-time job or earning an allowance gives children an opportunity to apply these skills to their own lives.

Bring on the banking lessons.

Teaching kids the basics of banking is a must and bonus points if they can understand the rules of saving, using a debit card, online transactions, and the harmful effects of overspending. Encouraging them to open their own bank account at an early age will gear them up for real-world spending and what it feels like to take on more responsibility.

Let technology lend a helping hand.

There are many fun apps out there designed to teach kids valuable money skills. Piggybot, for instance, is a digitized piggy bank that allows children to virtually keep track of their finances and see how much they have in their savings account.

Set a date for their allowances.

Setting up a ?payday? for a child?s allowance is a way to demonstrate dependability and showcase what it looks like to be held accountable for actions. Kids that see their parents pay their bills on time and send money on time are more likely to mirror those actions later in life.

Investments, FYI.

Remember, if you have any investments where your children are the first or second holders, they will not be accessible to you after they turn 18. Without their consent and signature, you will not be able to close any of these accounts. Pro-tip: Make sure you have converted the minor accounts into major accounts as their signatures have to be attested by the bank and submitted to the concerned financial institutions.

7 Questions to Ask Before Doing a Cash-Out-Refinance ? Bankrate

Doing a cash-out refinance is a popular move for homeowners. In fact, more than half of homeowners who refinanced during the first quarter of 2017 cashed out on equity. What is a cash-out refinance in the first place? Simply put, it allows you to shake some money out of your home?s equity by borrowing more than you owe.

There are benefits to making these decisions but what about the risks? Consider these 7 FAQ?s before committing to a cash-out refi.

How does a cash-out refinance really work?

It comes down to how much your home is worth, your current mortgage balance, and how much you want to borrow. Pro-tip: Opt for the maximum loan amount and ?cash out? the difference between your new mortgage and the balance on the old one.

Why do homeowners tap equity?

The most common reasons why homeowners tap their equity are because they either want to pay for remodeling projects and home improvements or reduce or consolidate higher-interest credit card debt. Other uses include funding vacations, businesses, or education. Ultimately, you can use the money from the cash-out refinance any way you like. Choose wisely.

What are the benefits?

There are several: you can obtain a larger sum of money at once, interest is in the mortgage-rate (rather than the credit card range), and the interest you do pay is deductible.

How much cash can you get?

Lenders can go as high as 85% with FHA cash-out refinance loans (ones that are insured by the Federal Housing Administration) and VA-backed cash-out refinance loans are available for up to 100%. Pro-tip: Your credit rating is also a factor and the higher the loan-to-value, the better the credit score needs to be.

How do I know what the house is actually worth?

Step 1: get a home appraisal. It does come at a cost though?anywhere from $400 to $650. For high-dollar homes, it could even cost as much as $1,300. Due to the appraisal costs, there is often an upfront deposit for a cash-out refinance loan and despite the outcome of the appraisal, the fee is usually non-refundable.

What are the rates and fees?

According to this 2017 Bankrate study, they typically run from 0.8 to 1.3% ?Some lenders will quote a base interest rate, then give you the option of buying that rate down by paying points. These points are fees that are equal to 1% of your loan balance, so before you get too excited about these very-low rates, simply ask if it includes any points (and what the rate would be without them.)

What are the risks?

Cashing out home equity to repair or upgrade your living conditions is one thing, but using it to off the credit card or other debt is not advised. With a credit card, for instance, there is no collateral for creditors to take if you default. Remember, with a cash-out refinance loan, the collateral is your home. If you trade credit card debt for a mortgage, you could lose your home.

7 Money Saving Takeaways for 30 Somethings ? Business Insider

Starting a business, buying a home, getting married, or starting a family ? a whirlwind of change can occur when you reach your thirties. Every season of life offers a new set of lessons to learn in the financial arena, but it doesn?t have to be a grueling process. Here are 7 ways to ride the waves of change and stay afloat financially:


Live below your means.


Growing real wealth means a lot of discipline along the way. Living below your means is a good place to start. The bigger you can make the gap between what you earn and what you spend, the faster you can reach your financial goals.


Focus on the percentage of income saved, not the dollar amount.


Earning money and saving money should be congruent with one another. Over the long term, it?s less about the dollar amount you save, and more about the percentage of your income that is dedicated to saving and investing. It?s simple? if you earn more, save more.


Spend time tracking and reviewing your money.


When it comes to finances (or anything in life), swap becoming reactive for becoming more proactive when difficulties arise. Be intentional about money and take the time to review your process and evaluate it. Pro-tip: ?Add a financial review session to your calendar once a month. Set a date and stick to it. Taking the time to look at your overall spending, accounts, and net worth will help upgrade your money mindfulness.


Diversify where you invest.


Funding your 401(k), IRA, or other employer-sponsored retirement plans are great opportunities to save and invest for your future, but they are not the only ways. Look for places to invest outside of your retirement accounts like taxable brokerage accounts, real estate (investment properties), or creating additional streams of income.


Spend better (not more.)


Line up your values with what you spend your money on. Realigning spending habits with your core values is a major way to elevate your financial outlook. Pause and think about what you are really investing in when you purchase something and vote with your dollars.


Know when you need a financial planner.


Finding the right financial planner is like finding the right personal trainer. Not everyone needs a financial planner (or personal trainer.) It?s about understanding where you stand in your finances. Are you willing to put in the work on your own terms or would it suit you better to pay for the guidance from others? Understanding what you want out of life, and what your financial goals are will help guide you to the right decision.


Financial success doesn?t have to be complicated.


Keep the process as simple as possible: focus on your habits, be intentional with your spending (and saving), avoid ?get rich? schemes (building wealth takes time), and get advice from experts who are financially successful.


Photo by Roman Kraft



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