Saving for a Down Payment? Why You Need 20% Down

Why should I put down 20% when I can put down 5% and save more per month?  When my wife and I had our real estate business, this was a question my wife and I heard a lot while discussing how our clients were saving for a down payment. Our reply typically was, “Why should you pay PMI, or Private Mortgage Insurance?

saving for a down paymentOK, time for a quick teaching lesson. When you go to buy a house, the banks determined that a safe buyer is a person saving for a down payment that is 20% of the home’s value.  Therefore, if you put down less than 20%, you will be charged a monthly fee often referred to as PMI.

Be aware that this insurance isn’t for you. Rather, it is for the bank.  They are insuring themselves against the possibility that you will default on the payments and the bank will be required to seize the house.

If that doesn’t put things into perspective for you, let’s do a quick history lesson now and talk about the housing crisis.

The 2009 housing crisis.

As you will recall, the housing market came to a screeching halt because people bought more house than they could afford.

What happened again? Well, they used the easy lending requirements at the time to qualify for more money.  They put down less, bought nice furniture, and took lavish vacations.  Then, they lost their job or had a few rough months — and boom — they couldn’t make the mortgage payments anymore and the bank took the house.

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Apps that Save Money and Make Money: 4 Mobile Apps You Must Have

These days we’re all looking to save money.  And since most of us are attached to our phones, it only makes sense that we have apps that save money at our fingertips.

apps that save moneyIt’s hard saving money in today’s America.  It seems like every time we turn around, there is something grabbing at our wallet.  We live in a culture where spending and buying is thrown in our faces constantly.  Everywhere we turn there is an ad for this product or that service.  It can be pretty overwhelming at times if you ask me.  We’re under constant stimulation and it can be tough to not give in to the temptation.

Well look, I’m here to help. Below are apps that save money for you — and even make you some money.  No, you’re not going to get rich.  But, these apps can help you stick to your budget and even help come in below budget!  What a novel idea, wouldn’t you say?

I included my referral link for each app, but you’re under no obligation to show me some love.  Although, yes, I do appreciate it.  Regardless, sign up for them, check them out, keep the ones you like, ditch the ones you hate, and start getting on a path to saving money.

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Debt Payoff Story: How Jodi Paid Off $67,000

One of the great things about blogging is the chance to meet wonderful people and connect with them on a personal level. We have that today with Jodi.  She commented on my article about how I paid off $20,000 in student loan debt and I loved her debt payoff story.  She was kind enough to share her story in depth with me and she’s allowing me to share it with all of you.

debt payoffI truly believe her experience to be inspirational and a testament to owning your own financial situation. Jodi took charge of her finances, did the hard, but necessary work of paying them off, and she’s staring at $67,000 debt payoff that is down to its last payment as I share this.  A true inspiration.  Please read Jodi’s story below.

First, some background about Jodi.​

I am 36 years old and live in New York City, where I have lived since college graduation in 2002.

In 2008, I earned a second degree to become a certified court reporter, which has been my full-time profession since.

How did you get into debt?

​I borrowed a total of $50,000 in student loans for both degrees. While finishing up my court reporting degree, I was working part time and going to school only at night.

At a certain point, after one of my very long and exhausting days, I reasoned out that I would finish school a lot faster (and therefore, be able to get a job in my intended field much quicker) if I began going to school full time instead. So, I decided to leave my job and focus solely on expediting my degree.

Looking back, I think this was one of the best decisions for me. It enabled me to get a job just ahead of the economy crash of 2008.

But, it also meant I had to live off of my credit cards for a few months while finishing up school without an income. Scary!  And it sure did add up on the plastic.

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True Cost of Owning a House

Have you ever considered the true cost of owning a house?

I will be honest. When my wife and I bought our first house, we didn’t know.  We had no idea.

true cost of owning a houseSure, we knew all about taxes, mortgage, and insurance. And we heard about emergency funds and having a little extra set aside each month.

But, we didn’t know about everything else. You know what I mean.  The other little expenses that don’t show up on the mortgage documents at the closing table.
What am I referring to? Well, the basic costs of interior maintenance a home like paint, molding, and flooring.  Or the cost to keep it nice like mops, vacuums, or trash collection.

Then, there’s exterior maintenance with lawn mowers, trimmers, hoses, shovels, rakes, mulch, flowers, snow blowers, and pest control. And you can’t forget replacing things like the roof or garage door opener.

So, what are new, inexperienced home buyers supposed to do? Well, I have some tips for you to consider as you make your first home purchase.  Don’t do what we did.  Go in with more knowledge and preparation.

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Need Extra Money for the Family? These 5 Online Survey Sites Actually Pay!

You may recall that my wife became a stay-at-home for our son in 2016.  We were both on board with the idea, but it meant going down to one income.  She was a top real estate agent in our area at the time, so it was real shock to the budget.  It was one of the reasons we decided to ditch the expensive home in the expensive area.

online survey sites actually payWhile we could afford everything on my salary, we still wanted to have a little extra in the event of emergencies and to pad our savings.  To do this, we decided to start answering online surveys.  Now, I know what you’re thinking.  Dave, come on, those things are not legitimate.  And you would have a point.  Some online survey companies are not legitimate.  Don’t go paying somebody to take their surveys or expect to earn a full-time income filling out a couple surveys a week over your morning coffee.

No, this isn’t get rich quick.  But, it is a way for a stay-at-home mother or father looking to supplement the family’s income with a little extra income for a time.  It’s a go-to option when you’re in need of some money in a pinch.

Let’s be honest, though.  Couldn’t we all use an extra $100 or $200 a month?  Just an extra $100 that can be used for gifts for loved ones, a visit to the veterinarian, paying off debt, or padding the savings.  Well, that’s what you get with doing some surveys.  Extra money without a ton of effort that can help with life’s surprises and incidentals.  Hey, at least it offsets some costs!

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Frugal Fun: Taking the Entire Family to a Baseball Game for Cheap

Who doesn’t love going to a baseball game? A warm summer day.  A cold beer.  A hot dog.  Your favorite team.  Your friends and family.  Honestly, what could be better?

baseball game for cheapIt’s all great … until you see your empty wallet or your credit card bill. Major League Baseball games, along with the other major sports, are expensive and a real hit to a family’s budget.

You want to have a great (and carefree) time with the family on a Saturday afternoon. You want to give the kids some fun ballpark food – hot dog, soda, popcorn, pretzels, ice cream, and water ice.  And you want to get them a baseball, hat, shirt, and that giant foam finger that’s become a cliché.  Sure, it’s all part of the ballpark experience.

But, it comes at quite a hit to the wallet. That’s why I’ve compiled a few ideas here to help your family have that ballpark experience at a much more budget-friendly cost.

Attend a minor league baseball game instead of an MLB game.

I know it might be tough for you as an adult to sit through a minor league game. If you’re like me, you want to watch your favorite MLB team (Phillies for me) and that’s it.  However, I do appreciate baseball the game itself.  I can have any baseball game on TV and be completely happy.

For the family, go to a minor league game or an independent league game. Everything is much cheaper – from the tickets to the food and merchandise.

The caliber of play may not be the same as the MLB, but the caliber of fun will be. In the end, that is all that matters.  Plus, your budget will be happy too!

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House Poor: What it is and How to Avoid it

Have you ever felt like a complete and utter failure?  I am talking about a total breakdown, tail between your legs, wondering how life will go on from here … flat out FAILURE.  That’s how I felt on that fateful day in the stairwell at my auditing job while speaking with my wife. I had finally come to grips with the fact that we had to move because we were house poor.

That meant selling the house where we started our married life together in 2011.  Here we were, less than 5 years later, having to sell it.  We wouldn’t see the fifth year anniversary of our wedding or closing date in our home.

house poorIt was the realization of our EPIC FAILURE.

It was the house our first child (Davey Joe) came home from the hospital to. The home where my wife become a rock star real estate agent in the area and we spent countless nights scheming for her to continue her rise.  The neighborhood where we spent at least two summers planting countless miniature U.S. flags for July 4th.  The house and a community that we called home was now quickly going to become a place to visit.

The holidays around the dining room table that we got for free. We hauled the damn thing in a rented pickup truck for a half hour or so hoping that it wouldn’t tip over into traffic.

The blood, sweat and many tears that went into painting walls, laying floors, and hanging crown molding. My wife and in-laws did the majority of the work while I went to my job.

It was the home where we learned our pug had lymphoma. But, the little girl beat the odds and was cured.

We experienced ups and downs while we lived there for sure. That said, we loved that house.  We loved that neighborhood.  And we loved that town.

Unfortunately, we were the very cause of our own downfall. We created the circumstances that lead us to have to sell our first home and relocate.

Let me explain where we went wrong and how we bounced back.

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How I Paid Off $20,000 in Student Loan Debt

Remember when you just graduated college?  The very last thing you ever thought about was student loan debt.

After all, you were so excited to take on the world.  You thought you had a plan for your life and, if you were lucky, you had a job lined up before graduation.

paid off student loan debtNo, you didn’t worry about budgets.  You probably didn’t even know what debt was.  Wasn’t a bill something your parents paid?

Then, you get your first paycheck and it’s not as big as you would hoped.  Taxes and all other fun stuff rob you of that juicy gross income.  Further, you get smacked with a student loan bill that you may have not even realized existed.

When Anna and I were just starting out, we neglected to keep a budget.  We paid for the big television package that had all the interesting business channels that we enjoyed watching.  Yes, we are news and financial nerds.

One Saturday night, in particular, we sat down to watch some TV before bed and on came Dave Ramsey on the Fox Business Network.  His opening line was (which is all too familiar to us now) was about living like no one else, so that someday you can live like no one else.

That line really stuck with us.  And it lead to a big mindset shift for us.

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Have a Frugal Easter Holiday

With Easter right around the corner, do you find yourself waiting for just ONE MONTH without a holiday?

frugal easter holidayJust one month so you can play catch up and ACTUALLY SAVE your goal savings amount. I understand you and a lot of other people out there are with you.

As parents, we are constantly pulled in two directions. Do we save money?  Or do we buy our little one that extra gift or two?  You tell yourself it’s what your parents did for you.  You rationalize it by thinking it’s a holiday!

Again, I’m with you and I get it. My wife and I are navigating these waters as well with our young son.  It’s not an easy thing.  You see the little face and you just want to give them the world.

However, we all need to be role models for our children. To do that, we sometimes need to make the difficult, but necessary decisions.  Can you say adulting?   (Side note: I hate that term and my spell check doesn’t even recognize it).

That’s why I found some top blog posts from the last few years that I wanted to share as we prepare for Easter. I know Easter isn’t as expensive as Christmas or the child’s birthday, but candy, baskets, and presents can begin to break any well-intentioned parent’s budget very quickly.

Fear not. I found some great tips from other amazing bloggers that can keep you on budget this Easter holiday.

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Become Financially Independent in Your 30s

I have always wanted to become financially independent in my 30s.  It has always been a goal of mine.  It all started for me around 2007 and it coincided with meeting my wife in 2006.  She introduced me to Rich Dad, Poor Dad by Robert Kiyosaki.  Kiyosaki talked about his Rich Dad, who understood how money worked and built businesses.  He was his friend’s father.  His Poor Dad (his own father) was a schoolteacher and was a slave to money.

become financially independent in your 30sKiyosaki spoke about how he learned that having a business is a bridge to building wealth and introduced us all to the E/S/B/I triangle.  E for Employee, S for Self-Employed, B for Business, and I for Investing.  The goal was to move away from being an employee or self-employed (which Kiyosaki called owning a job) and move into the B/I side.  Your goal was to build a business that you could use to invest  From there, you could build true, sustainable wealth.

And I was hooked.  I wanted financial freedom really bad.  These days it’s called “Financially Independent, Retire Early,” or FIRE.  Yes, it’s still a strong desire of mine and one that I’m committed to achieving in the coming years.

What about you?  Are you new to the concept of financial independence?  Have you ever considered it?  Consider some of the points below as a way to jump start your FIRE goals!

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