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Monthly Archives: October 2019
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9 ways to prevent childcare costs from busting your budget
If you’ve already joined the working parents club, then you completely understand the pain of having childcare costs eating away your budget each month. The hefty price tag of childcare pushes many to delay having children until they feel they can easily afford such responsibility. Before you begin your search for childcare, or if you’re just looking to reduce childcare costs, be sure you know just how much of your budget you can actually afford to allocate to childcare.
Money isn’t the only way to pay for goods and services. Do you have a skill or provide a service that your daycare could use? Simply talk to the director of the daycare to see if you could offer your skills to reduce the costs, or even better, remove the costs altogether. Daycares often hire services for marketing, cleaning, cooking, janitorial, and more. Bartering is still a thing these days, and it relieves the financial burden for both parties involved.
2. Research and compare
First and foremost, research daycares near your home and compare pricing. Think about what’s most important to you, and create a list of questions that can be your guide. Do you want a daycare that’s close to home or one that stays open later than most daycares? While it’s nice to have a low rate, you don’t want to risk your child’s safety or place them in childcare where the teachers are overwhelmed with more children than they can handle.
3. In-home childcare
Businesses exist to generate income, and you can believe that daycares aren’t any different. To take advantage of lower rates, consider an in-home daycare. In-home daycares typically don’t face the same overhead expenses as regular daycare centers that have to hire staff, pay rent, buy food, pay utilities, and buy supplies. If you want to check on the license of an in-home daycare or find valuable childcare resources and tips, visit childcare.gov.
4. Adjust your work schedule
Many employers will work with employees if they need to adjust their work schedules. If your daycare offers part-time or drop-in options, work half the week from home and utilize the daycare the other days. Or, if you want to work nights and weekends, while your partner stays home in the daytime with the children, see if that is available to you. Don’t be afraid to ask for what you want. Many companies aren’t as strict as they were many years ago, appealing to hard-working, young, and thriving parents who are a valuable asset to the company.
5. Work remotely
Telecommuting is a great way to eliminate or reduce childcare costs. Many employers are flexible and understand the need for employees to work remotely occasionally or full-time. Working from home is also beneficial in that it allows you to attend school events, reduce evening stress, save on gas and car repairs, and most off all, allows you to save more money for other day-to-day financial needs. Stay on top of your work responsibilities to ensure your boss doesn’t regret it and suspend your work from home privileges.
6. Government assistance
Yes, childcare is so expensive that the government has stepped in to help parents who struggle to pay the high cost of care each month. While there are certain qualifications that must be met to receive help from the government, it’s a great financial resource worth researching. And don’t assume you exceed the income limits. When you factor in children and the expenses of running a household, many people will be surprised to find out they actually do qualify.
7. Boys & Girls Club or YMCA
Many Boys & Girls Clubs have been around for decades and, just like the YMCA, provide great afterschool hours and very affordable rates. These youth activity centers help students with their homework, engage them with physical and mental activities, provide food, and offer a safe environment for them to work and play.
8. Ask family
Is grandma sitting at home all day watching her favorite court-television shows? Why not ask granny to look after your little one while you work? After all, she’s experienced. Typically, grandmothers love spending time with their grandchildren, or any small children. It may not be the same type of care you’d find at a daycare center, but it’s usually convenient, safe, and affordable. Maybe you have another relative nearby whose schedule isn’t hectic. Family is often supportive of their working family members who have little ones and need to save money. Reach out to your family members and explain the ever-rising costs of daycare and how difficult it is to pay. If they are reluctant, maybe you can pay them something to soften the blow, while helping you to avoid the hefty expense at regular daycares.
9. Try church
Many churches have joined the childcare business, but the best part is their competitive pricing. Most church daycares operate at a 20 percent or greater discount than most private daycare centers. Call around to churches in your neighborhood and inquire about their rates. Once you find one that matches your budget, stop in for a visit. You’ll often find there are fewer children and a very friendly staff. However, more likely than not, there will be some teachings about religion as a part of the church ministry. If you don’t want your child learning about the religion of that church, find one that has similar religious views.
6 ways to save on holiday travel
We try to fit a lot into our holiday budgets, and travel can account for a pretty big slice of the pie. But even if you’re just beginning to think about the costs of visiting loved ones this holiday season, it’s not too late to save.
About half (49%) of American adults plan to spend money on flights and/or hotels this holiday season — that’s 123.5 million travelers, according to a new NerdWallet study.
And though 36% of these travelers say they’d skip buying gifts for friends and family if they were spending a lot to visit them this year, that level of sacrifice may not be entirely necessary.
If you’re scrambling for last-minute ways to save on holiday travel, here are some ideas to get you started:
1. Start watching rates, like, yesterday
Those who travel over the holidays book their flights 7.7 weeks before their departure date, on average, the NerdWallet survey found. You may be able to beat other travelers to the punch by buying before that peak booking time.
Also, set up alerts through popular booking sites like Kayak or Google Flights to keep an eye on rates. If they start creeping up as your travel dates near, you’re better off buying earlier than holding out for a last-minute deal and getting caught with astronomical fares.
2. Get serious about freeing up more money
More than 7 in 10 (71%) people who travel for the holidays start saving in advance, the NerdWallet study found. But even if your budget is tight and your travel dates are coming up soon, you can still look for easy ways to free up money.
Limit all optional expenses, such as meals out and entertainment, for several weeks. After all, holiday travel is one big optional expense; sacrificing drinks after work with friends for a few weeks could cover the price of your checked bag and a rideshare or two.
3. Make your credit card work for you
Three-fourths (75%) of holiday travelers will put some or all of their travel expenses on a credit card, according to the survey. Depending on their card and how long it takes to pay off those expenses, they could be earning as they spend — be it cash on a cash-back card or points toward future travel on a travel rewards card. Also, they could be using already-earned points and rewards to help pay for this year’s travel.
Use the card that stands to benefit you the most — one with decent rewards rates or other travel benefits like trip protection or no foreign transaction fees.
4. Don’t pay interest
Credit card interest can quickly negate any benefits from using a rewards card and can make your travel even more expensive. Still, 5% of people who put last year’s holiday travel on a credit card are still paying for it today, according to the survey.
If you know it’s going to take a few months to pay off your holiday travel, make a plan to minimize the impact of your credit card transactions. Opening a card with an interest-free introductory term is one option. But if time or your credit doesn’t allow for a new card, budget for higher-than-mandatory-minimum payments until you can pay it off.
5. Keep shopping after you book
After you’ve booked your flight, your deal-hunting doesn’t have to end. Most airlines will issue a full refund within 24 hours of purchase, even on nonrefundable tickets. The specifics vary by airline — so read up on your airline’s 24-hour cancellation policies — but you may be able to cancel and rebook if you find a lower rate within that first day.
A similar strategy can be used on hotels: If you make a cancellable reservation, keep checking rates. If they go down, you can cancel and rebook at the same hotel (or a different one, if the opportunity arises). Again, know the specifics of your reservation — if you try to cancel too close to arrival you could lose money.
6. Let your presence be their present
If travel is your top priority and you’ve done what you can but are still coming up short, don’t be afraid to skip traditional gift-giving. You wouldn’t be alone — 36% of travelers said they’d consider doing the same thing if they were spending a lot to visit friends and family. You’ve worked hard to get there; maybe they can come to you next holiday season.
6 mistakes to avoid when refinancing your home
Mortgage rates are at an all-time low, which is an ideal time to swap your current home loan for one with a better rate or term. Most homeowners choose refinancing to reduce their monthly payment, and why not? Your mortgage just went on sale!
Others want to use some of the equity they’ve accumulated to fund a remodel, a large purchase, or an investment.
Refinancing is a terrific option, but it’s not as simple as signing a few docs, and you’re out the door. In some instances, refinancing can actually increase your interest rate rather than lowering it. It can be costly, so be sure you do some legwork before you seal the deal.
Here are six of the most common mistakes that homeowners make when refinancing their mortgage:
1. Thinking refinancing all about the rate
When you refinance your mortgage, you’re in the market to save some money. For most borrowers, that means a lower interest rate. There are, however, a lot of other factors that affect mortgage pricing, like closing costs, origination fees, and points, for example.
All of these costs can vary from one lender to another. A super-attractive low rate can be used to disguise a loan with unusually high fees, or it can be based on paying discount points up front. Make sure you’re comparing apples to apples. Ask about the additional costs that are factored into the price and be wary of major changes made after the fact. You want a mortgage lender who invites you into the process and helps you choose the pricing options that best meet your needs, not theirs.
2. Not objecting to junk fees
Expect some fees when you refinance, but be on the lookout for junk fees. Closing costs like loan origination, title, and application fees are legitimate and unavoidable, but some lenders might add on additional costs. Document preparation or delivery, or an excessive charge for pulling your credit report are some common examples of bogus fees. As a general rule, if you can hire someone to do it for less or can do it yourself for free, question it.
Although not necessarily a junk fee, you should also object to a prepayment penalty fee. Might you pay off your loan early? Probably not in the way you think, but remember, paying off your loan early also includes refinancing it again in the future, which is always a possibility.
Prepayment penalties are common in a “no-cost” refinance where the lender recoups those costs by charging a slightly higher rate. They usually expire in a few years, but it ensures that the lender still gets paid if you sell or refinance before they can recover the refinancing costs. If you must agree to a prepayment penalty in order to get your loan approved, make sure it does not apply after more than 3-5 years.
3. Not getting enough bang for your buck
There are costs to refinancing your loan, so make sure you’re a winner in the end. If you refinance and only reduce your rate by a small fraction, maybe half a percentage point, you need to calculate your break-even point—the time it’ll take you to recoup the cost of refinancing your loan. If you save $100 a month, it’ll take you just over four years to recoup your $5000, but if you only save $50, it’ll take you twice as long. Do you plan to stay in your home for more than eight years? For some, that’s an absolute yes, for others, a definite no.
Generally, experts agree that you need to save at least three-quarters of a percent to make it a smart transaction, but each borrower’s plans and circumstances are different. Just make sure it’s not only advantageous for the here and now monthly payment, but also your long-term financial future.
4. Taking out too much equity
Many people refinance as an opportunity to borrow against the equity they’ve accumulated in their home. It’s an attractive way to borrow money because the rates are low compared to other types of loans, and the interest is usually tax-deductible.
Borrowers should be careful, however, that they don’t take out too much equity and leave themselves at risk if housing prices take a deep dive—again. No one ever wants to owe more than their house is worth. You also don’t want to boost your mortgage payment so high that there’s no wiggle room should a financial emergency arise. Leave enough cushion, so you’re not living on the edge.
5. Stretching the term of your loan
Most borrowers begin homeownership with a 30-year mortgage. They pay it down for a few years and then refinance. Now they’re into another 30-year mortgage. Sure, it reduces your monthly payment because you’re spreading your remaining principle over more time, but chances are, even with a lower interest rate, you’ll pay more over the lifetime of the loan.
Unless you’re financially stressed and need to reduce your monthly payment, you might consider refinancing into a new, shorter-term loan that’s closer to the time you have left on your current loan. Shorter-term mortgages traditionally have lower rates. You can save money and a few years on your mortgage without a significant increase, if any, in your current monthly payment.
6. Skipping the Good Faith Estimate review
The Good Faith Estimate is a detailed breakdown of your mortgage loan, including the interest rate and all fees. Be sure to review it carefully and make sure it matches your expectations, without any exceptions. Also compare your final documents at closing to the Good Faith Estimate, especially when it comes to fees. Don’t hesitate to questions any discrepancies and don’t be afraid to walk away if there are significant differences. Chances are that the Good Faith Estimate and the documents will be in good order, but some unscrupulous lenders may try to tack on some fees at the last minute to generate extra income on the loan.
Refinancing your mortgage has advantages and disadvantages, too. So, do your homework, find a reputable lender, and work together to find a mortgage solution that meets your objectives. As a smart shopper, you already know what to look for and which questions to ask, so you’re already ahead of the game.
New Venmo Scam Targets Payment App Users
“A new Venmo scam is making the rounds nationally, one that can lead to massive financial losses in your Venmo account.
Payment apps are a fairly new invention, especially peer-to-peer apps that are connected to your bank account or a credit card. Unfortunately, what is not new is phishing scams.”
Continuing reading this article at idtheftcenter.org.