Decorators Share the Best Ways to Refresh Your Home for Free

Spring brings change outside so it’s only natural to want to redecorate inside. Whether you’re just freshening up or looking for a whole new look, it doesn’t have to cost a lot. In fact, seasoned decorators say there are plenty of ways to redecorate that don’t cost a dime.

‘Shop’ What You Already Have

“I always tell people to ‘shop’ in your home,” said decorator Stephanie Everhart, owner of So Be It Interiors in St. Petersburg, Florida. “Redesign your rooms using the items you already have.”

Joseph Marini, an interior decorator and owner of At Home With Joseph, is also a proponent of keeping original pieces when redecorating. Rearranging a room with the same furniture can make a big difference.

“Say you have a sofa and two easy chairs that are kitty corner to the sofa,” Marini said. “Try taking them and facing them across from the sofa, or putting them beside each other at a right angle to the sofa. Just changing the angles of furniture can give a room a whole new look.”

Re-Evaluate Your Current Layout

As people spend more time in their homes, they’re also realizing what makes them happy and what doesn’t, Everhart said.

That dining room that’s only used five times a year could become a second sitting area or a home office. Take the leaves out of the table, or fold down the sides and put it against a wall. Add a wing chair or bench from other rooms, pull a lamp out of the attic and a desk or end table that’s sitting in the garage. Now you have a new reading room.

Everhart realized her china cabinet took up a whole wall. She no longer wanted to display dinner plates and crystal, so she got rid of it. Now she has a whole new wall space on which to hang the religious art she collects.

10 More Free Ways to Refresh Your Home

Here are some more suggestions from Marini and Everhart:

1. Create an inviting outdoor area.

Whether it’s in your own yard or on a shared back stoop, fresh air is good. Take potted plants from inside to a space outdoors to enhance a sitting area. If you don’t have outdoor furniture, move a kitchen chair and end table outside for a couple days if rain isn’t in the forecast.

2. Try a different way of making your bed.

Fold the duvet or bedspread down to the bottom third of the mattress and drape a blanket over the upper portion. (Think hotel style.) If you usually layer pillows against the headboard, place them flat on the bed stacked on top of each other.

3. Break out the paint and brushes.

“If I get bored with furniture, I never mind painting it,” Marini said. “Take some paint you have lying around. Most furniture can be painted really nicely with two coats. If it’s really, really glossy, you can sand it.”

4. Tend to window treatments.

“One thing I always find that refreshes a home is labor-intensive washing,” Marini said. “Take curtains down and wash them, dry them and iron them. It gives you a sense of accomplishment.”

5. Bring the outside in.

You don’t have to have an elaborate rose garden to make a centerpiece and fill a vase on the bedside table. “Just go out and pick some greenery from your bushes or your trees if you don’t have flowers,” Marini said. “This always freshens a room and adds a personal touch.”

6. Redo your bookshelves.

Everhart shared some ideas, including:

  • Use a spare quart of paint sitting under the laundry room sink to paint the back of the shelves.
  • Arrange books by color. “I love taking those slick jackets off of books so you can see the real color and texture of the books,” she said. “It’s really nice to see their spine. Especially older books.”
  • Place some books vertically, but stack some on their sides. Now you have a little space for a picture frame or favorite memento. “Your bookcases need to have items that tell the story of your life,” Everhart said.

7. Highlight collections by gathering pieces in one place.

If you have two candle sticks on the dining room table and several stuck in a drawer, arrange them together on the fireplace mantle. Take your father’s cufflinks out of the felt bag in your top drawer and place them in a small glass bowl. Line those perfume bottles on a shelf instead of cramming them in bathroom drawers.

8. Reorganize a room by switching out a piece of furniture.

Everhart pulled out all the small appliances, like a crockpot and a long-forgotten George Foreman Grill, that were crowding her kitchen cabinets. “This made putting dishes and bowls away much easier, but I didn’t want the toaster and the blender and everything up on the counter,” she said.

“I went to the garage and found this wooden cabinet painted this God-awful olive green color. I painted it white and put it in my kitchen, where I used to have this little marble table on four legs that wasn’t serving a purpose.”

9. Rework frames and photos.

Replace some older photos with a few newer ones. Put a smaller photo in a frame and use fabric as the background. If frames are crowding a shelf or desk, try hanging a few on the wall.

10. Re-cover a chair to give it a new look

You can do this if you have a staple gun and a couple of yards of fabric, or a cloth shower curtain or vintage tablecloth. If you find that you want to learn more about reupholstering furniture, think about a side gig and make $20 an hour or more updating old furniture.

For more home decor tips, follow Everhart (SoBeItInteriors) on Instagram and Facebook and Marini (AtHomeWithJoseph) on Instagram and Facebook.

Contributor Katherine Snow Smith covers ways to make money, save money and other topics. Her work has appeared in the Tampa Bay Times, Charlotte (N.C.) Business Journal and Greenville (S.C.) News. She is the author of “Rules for the Southern Rulebreaker: Missteps & Lessons Learned.”

Source: thepennyhoarder.com

Are We Near the Peak of the Current Housing Cycle?

They say real estate is cyclical, much like the stock market and the wider economy.

It ebbs and flows, goes up and down, experiences booms and busts, can make us feel rich one day and poor the next.

It doesn’t follow a straight line up or down over time – instead, it can be rather erratic, thanks to, well, us.

We speculate, we get emotional, we create all sorts of creative financing to keep the party going, even if it doesn’t fundamentally “make sense.”

And it seems now the state of the housing market is being seriously questioned. So, are we finally peaking?

Housing Bubble Chatter Seems Positively Correlated with Higher Mortgage Rates

While I continue to argue that home prices and mortgage rates can be negatively correlated, it seems housing bubble fears and higher interest rates share a positive correlation.

In other words, with mortgage rates surging, housing bubble anxiety is also beginning to surface just about everywhere.

It’s not just a quiet side conversation anymore. Instead, you’re seeing it in the headlines daily, and even the Dallas Fed is weighing in.

The researchers and economists at the Federal Reserve Bank of Dallas released a new blog post titled, “Real-Time Market Monitoring Finds Signs of Brewing U.S. Housing Bubble.”

In it, they argue that housing “is in the primary expansionary phase of a bubble when price rises are out of step with market fundamentals.”

But they stop short of calling it a “bubble,” noting that there are valid reasons why home prices have surged since bottoming in 2012 and accelerated even more since 2020.

Some of those drivers include changes in disposable income, low mortgage rates, supply chain disruptions, and the rising cost of labor and raw construction materials.

The worry is that a “widespread belief that today’s robust price increases will continue,” driven by FOMO, will create explosively higher prices and an eventual bust.

That’s all pretty straightforward, but the question remains; when will this happen? Or is it already happening?

Keep an Eye Out for Exuberance

housing exuberance

The Dallas Fed bloggers refer to exuberance as “expectations-driven explosive appreciation,” which deviates from market fundamentals.

Put another way, home prices no longer rise for real reasons, but instead are climbing simply because we expect them to.

Throw in accommodative financing to foster this unhealthy environment and you’ve got a real problem on your hands, as we did back in 2006.

At that time, banks and mortgage lenders threw out all underwriting standards because they assumed property values would keep increasing.

So even if you gave someone a no money down mortgage, they’d accrue equity in short order via home price appreciation.

This made the underlying loans seemingly less risky, because the homeowner was expected to quickly gain skin in the game.

Of course, once home prices turned, these borrowers rapidly fell into underwater positions at startling rates.

And then we experienced the worst housing crisis in modern history.

Speaking of 2006, the chart above compares that time to now in terms of “real house price exuberance.”

“A test outcome above a 95 percent threshold signifies 95 percent confidence of abnormal explosive behavior, or housing market fever.”

So based on that chart, we are experiencing housing market fever! The good news is we only caught the fever recently!

If you look at the early 2000s, we had the fever for quite some time before things went badly.

It started just after the turn of the century, and lasted until around 2006-2007 before prices began to dive.

How Much Time Does the Hot Housing Market Have Left?

price to income ratio

The Dallas Fed’s exuberance meter has been flashing red for more than five consecutive quarters through the third quarter 2021.

And I think we all know it’s continued to do so thus far in 2022.

The one bright spot in their research was the price-to-income ratio, which is the ratio of house prices to disposable income.

If you look at affordability back in 2005-2006, price-to-incomes were off the charts. As of the third quarter of 2021, it was still below the 95 percent confidence upper bound.

Of course, that was then, and this is now. The average 30-year fixed mortgage rate has risen from around 3% to nearly 5%.

Clearly that will take a bite out of affordability, and would likely move that indicator into exuberant territory as well.

However, they do note that household balance sheets appear to be in a lot better shape than those in the early 2000s.

Simply put, Americans aren’t holding adjustable-rate mortgages en masse or taking out loans at 100% LTV. There also isn’t a supply glut of housing inventory as there was then.

And they add that “excessive borrowing doesn’t appear to be fueling the housing market boom.”

For me, that’s the biggie – if and when that does occur, that’s when I’d run, not walk.

But whether that happens remains to be seen, which tells me we are still pondering a bubble, not yet in one.

Read more: What will cause the next housing crash?

Source: thetruthaboutmortgage.com

When to Change Tax Withholdings — and How to Do It

With tax season upon us, you might be wondering whether or not you’ll owe the government money. How much you owe or how much you’ll receive in a refund depends a lot on your tax withholdings from your paychecks during the year.

You’ve probably been dealing with withholdings since you were first employed, but many people still don’t know what that means. It’s vital to make sure you’re getting the right amount taken out so you’re not surprised by a bill at the end of year. And although your employer does the work of collecting the funds, it’s your job to ensure the amounts are right.

Here’s what you need to know about tax withholdings, including when and how to adjust them.

What Are Tax Withholdings?

Tax withholdings are the wages your employer sets aside for the purpose of paying federal and state income taxes. In short, it’s money you earn that you never see because it’s funneled directly into Uncle Sam’s hands.

Tax withholdings are determined by IRS Form W-4, which you fill out when you start a new job or when you want to adjust your withholdings — which we’ll get to in just a moment. You can see the exact dollar amount of your tax withholdings on your pay stub each pay period, and you can adjust your withholdings by submitting a new W-4 as often as you wish.

How Are Tax Withholdings Calculated? 

Your employer calculates your tax withholdings based on your responses to the W-4 Form. The W-4 form was redesigned in 2020 to help people more accurately calculate their federal income tax withholdings. The IRS mandates this new form for new employees, but if it’s been a couple years since you’ve submitted a W-4, your withholding might still be calculated based on the old form.

If you haven’t updated your W-4 recently, check out the box below for how the W-4 has changed.

New W-4 Forms 2020

The W-4 (Employee’s Withholding Allowance Certificate) was redesigned in 2020 to make it easier to use and to complement the new 2018 tax laws.

The new W-4 Form removes withholding allowances — so there’s no more calculating 0s and 1s to understand your tax withholding. The new design is divided into five parts, designed for accuracy and ease of use. Here is what you need to provide:

  • Personal information
  • Multiple Jobs or Spouse Works
  • Claim Dependents
  • Other Adjustments
  • Your signature

Sections 1 and 5 are required, but you fill out 2 through 4 only if they apply to your specific situation. For the most part, this form makes things straight-forward and you just fill out as you go along, but things can get a little complicated if you have multiple incomes or want to file your own individualized deduction. There are forms and worksheets for each calculation, but we particularly love the simplicity of using the IRS’s tax withholding calculator tool to help figure out any difficult steps.

Use IRS Withholding Calculator Tool

The simplest way to figure out how much should be exiting your paycheck each month is the IRS’s tax withholding calculator tool. But if you’re interested in the nitty gritty of how your employer should approach it, here are the basics of how your employer calculates your withholding.

Using the information from your W-4, your employer calculates your taxable income and then references the appropriate tax table. From there, employers can calculate withholdings through the percentage method or the wage bracket method.

The wage bracket method is considered the simplest method because the IRS chart shows you the exact amount to withhold based on the employee’s taxable income, marital status, deductions, etc. The downside is that the bracket method is manual and only covers incomes less than $100,000.

Because of that, the percentage method is the most common withholding method because it coincides with companies’ automatic payroll systems and works for any wage.

The percentage method is based on the tax rates as shown in the table below.

Wage Brackets at a Glance for 2021 Tax Season

Tax Rate Single Head of Household Married Filing Jointly or Qualifying Widow Married Filing Separately
10% $0 to $9,950 $0 to $14,200 0 to $19,900 $0 to $9,950
12% $9,951 to $40,525 $14,201 to $54,200 $19,901 to $81,050 $9,951 to $40,525
22% $40,526 to $86,375 $54,201 to $86,350 $81,051 to $172,750 $40,526 to $86,375
24% $86,376 to $164,925 $86,351 to $164,900 $172,751 to $329,850 $86,376 to $164,925
32% $164,926 to $209,425 $164,901 to $209,400 $329,851 to $418,850 $164,926 to $209,425
35% $209,426 to $523,600 $209,401 to $523,600 $418,851 to $628,300 $209,426 to $314,150
37% $523,600 or more $523,600 or more $628,300 or more $314,151 or more

Source: IRS

So if you’re single and you made $44,000 in 2021, your income places you in the 22% tax rate. You would own $4,807.50 plus 22% of the excess over $41,775. This would come to a total of $5,296.50 of withholdings to cover your federal income tax this year.

This withholding would be divided up across your paychecks for the year. So if you receive biweekly paychecks, then each paycheck would have around $203.70 withheld to cover your taxes.

It’s your employer’s responsibility to withhold this money for you, but we think it’s always a good thing to be informed. Again, the IRS tax withholding calculator tool can help you get a general idea of how much money will be withheld.

When to Adjust Your Tax Withholdings

Filing new tax paperwork is nobody’s favorite pastime — except maybe if you’re a CPA. (Probably not for them, either, though.)

But keeping your tax withholdings up to date is the best way to ensure you’re paying the proper amount in taxes, which can help you avoid underpayment penalties and also keep as much of your money as possible in your pocket.

Here are three scenarios in which you’ll want to adjust your tax withholdings.

1. You Get a New Job

If you change jobs entirely, you probably won’t have to think about filing a new W-4 — your friendly HR rep will simply slide one across the table. But if you start working multiple jobs, take note: You can’t claim the same allowances twice, so you’ll likely need to go back into your original job’s W-4 and make adjustments.

2. You Go Through a Major Life Change

If any of the following scenarios apply, it may be time to change your tax withholdings.

Having a child increases your number of dependents by one. Congratulations! We know you’re busy, but try to find time to file a new W-4. Maybe during naptime.

Getting married can change your filing status, particularly if you plan on filing your taxes jointly. Depending on your new spouse’s income, your overall household tax rate may increase or decrease. The same goes for if you get divorced.

Buying a house can reduce your overall tax liability since most mortgage interest and property taxes are deductible. You’ll save money throughout the year if you adjust your W-4 immediately rather than waiting until Tax Day to inform the government about your new digs.

Earning non-wage income, like side hustle cash or investment gains, can affect your tax status — so if you start a rental property business or you’re making bank by driving for Uber on your off hours, you’ll need to check your W-4.

3. You Get a Hefty Refund — or Owe Uncle Sam

As nice as it is to see that pre-summer windfall, getting a refund basically means you’ve given the government a yearlong interest-free loan. You could have been putting that money to better use yourself during that time, particularly if you invested it and let it grow.

On the flip side, if you find out you owe money at tax time, adjusting your withholdings might keep you from desperately scrounging in the couch for spare change during your spring cleaning spree.

Need a cheat sheet? The IRS provides a handy tax withholding calculator tool, which can tell you whether your forms are in need of an adjustment. It’ll only take a few minutes, but you’ll want to gather your recent pay stubs and last year’s tax return before you get started.

How to Adjust Your Tax Withholdings

If you’ve determined you do need to adjust your tax withholdings, all you need to do is file a new W-4 with your employer. Many companies keep all their tax forms and documentation online, so you might not even have to put pen to paper.

Contact your employer’s HR department (or whoever’s in charge of tax documents and compliance) for specific instructions. And if your adjustments do mean you get to keep more of your paycheck, don’t just blow it! Use it to start an emergency fund, or stick it in an interest-accruing retirement account for later.

Contributor Whitney Hansen writes for The Penny Hoarder on personal finance topics including banking and investing. Reporting from former contributor Jamie Cattanach is included in this report.

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Source: thepennyhoarder.com

When Market Realities Bite, Stay Flexible and Adapt

Purchasing a place to live is one of the biggest decisions of your life. Even in an ideal scenario — a buyers market with plenty of affordable houses and scant competition — the stress of buying a home is not something to take lightly. And today’s buyers are not living that ideal: Prices remain high, inventory cannot satisfy demand, and competition for the few homes available often leads to bidding wars (fortunately, there are some effective ways to prepare for that). Add to all of this rising interest rates, and it’s a potentially intimidating time for homebuyers.

To better understand how to prepare emotionally for what can be a marathon search, we spoke with Christina Koepp, a licensed mental health counselor at Wellspring Family Services, and asked her to weigh in on what home shoppers can do to cope with this pressure-cooker of stress.

What makes buying a home so stressful?

Buying a home can invite pressure from every direction. Let’s look at just a few of the potential stressors.

Choosing a home

A home purchase is one of the most significant financial decisions many people make in their lifetime, and on top of that, the process affects basic necessities like shelter and safety.

Buying a home taps into all parts of our mind: our basic need for shelter, our attachment needs for a safe place to connect with ourselves and others,” says Koepp. “To take the risk and make an offer on a home, we need to be willing to attach to a new place to live, and — simultaneously — hold it loosely enough that it won’t be devastating to lose the bid. It’s a narrow path of guarded optimism.”

The real estate market 

Just about anywhere you look in the U.S. these days, you’ll find a sellers market. This can make the stress of buying a house feel even more pronounced. A sellers market can bring anxiety accelerators like seemingly endless open houses, bidding wars, and getting outbid by all-cash buyers. 

The loan approval process 

If you’re working with a lender, the process can take weeks or longer. Expect lots of paperwork, which can be all the more grueling if your dream home is waiting. (To ease some of this tension, get pre-qualified before you find a place you want.)

Working with an agent who’s not a fit 

Almost one in five buyers (18%) report that it’s “difficult or very difficult” to find the right real estate agent. If your agent isn’t a good fit, they can add pressure where they should be alleviating it.

Read on for tactics on how to navigate what can be both a stressful and exciting journey.

How can I mentally prepare for the stress of buying a house?

“If you ‘fall in love’ with every home you see, it leaves little room for discerning which is the best fit,” Koepp says. “And you can quickly become emotionally fatigued with each lost bid or opportunity.”

Instead, it can be helpful to think of your home buying journey as a balancing act between vulnerability and healthy detachment. In other words, try to be “vulnerable enough to imagine your life in this potential new place,” says Koepp, while simultaneously employing “the very healthy protective impulse of avoiding getting attached too fully and too quickly.”

Some more tips:

Think about your hopes and preferences in general terms 

With each new home, ask yourself how you’ll feel if you don’t get it, says Koepp. When you encounter a loss, talk about it with someone. Discuss what excited you about the home, then carry that forward in your search. In short, keep an open mind as you search for your dream home.

Avoid all-or-nothing thinking by considering your preferences in a general sense — an updated home, an architectural style, a set of neighborhood characteristics, etcetera. This can remind you that there’s more than one place to find joy and contentment.

Identify your non-negotiables as clearly as possible 

The way to balance being general with your wants is to be as clear as possible with your deal-breakers. “Know before you look if you’re really only open to a condo with three or more bedrooms, or a house with a garage,” says Koepp. “It’s easy to be swept up in a home that may have some dream elements, even though it has deal-breaker issues.”

Above all, Koepp says, offer yourself the grace that this won’t always be a neat and tidy process. “You get to be human in the midst of it.”

Find the right agent to help you cope with the stress of buying a house

Your agent is your guide through an often complicated journey. Make sure they provide peace of mind and not the opposite. If your agent is doing something that makes you uncomfortable, communicate it to them. Further, clearly articulating your wants, preferences, and non-negotiables will help your agent get aligned. This can ease your mind and allow you to focus on what’s important. If it’s still just not a fit, consider looking for a new agent. 

Tips for easing the stress of buying a house in the current housing market

Manage your expectations

“Prepare for a marathon, even if it’s just a sprint,” says Koepp. You don’t know how long it will take to have an offer accepted. “It could be a couple homes you offer on; it could be 12.” Keeping your expectations flexible helps avoid disappointment.

Extend kindness to yourself 

Koepp says this part can be challenging for some people. “It can be easy to doubt your judgment, become angry with your home-buying partner, or get obsessed with searching,” she says. “All these responses are understandable! Being kind means finding ways to rest, recharge and integrate each step along the way.”

A few things to try: Take a short break from scrolling through listings to re-center yourself, prepare a comforting meal after a lost opportunity, or be intentional about regularly getting to bed earlier, if you can.

Talk about your home buying stress with someone you trust

It’s helpful for many people to simply “say out loud what’s rolling around in their mind,” says Koepp. “Some prefer to journal. Use whatever works for you; try to share the challenges, insights, dreams and goals that you’re noticing. Reach out often to loved ones to keep your awareness, energy, and perspective in line with your goals and hopes.” This will help you process as you go. 

How to bounce back after an unsuccessful offer

First, pause to reflect, then let it go 

Koepp says it’s important to honor the deep disappointment that can result from a lost opportunity you felt invested in. “Take a few hours or even a couple days to acknowledge that experience, and know it will fade.” Next, find a way to feel gratitude. This may help counter the propensity to dwell solely on what was lost. 

Learn from each loss 

“In my experience, each bid process is unique and comes with its own challenges and insights,” says Koepp. “Again, note what you were surprised by and integrate it into your process for future bids.”

This article was originally posted in January 2021.

Remember, these tips are intended as general advice. If you have specific concerns, are struggling or need help, contact a licensed mental health professional.

A good agent can help you through this journey. Find information and reviews for local Zillow Premier Agent partners who can walk you through the buying process and help you find the right home. Then learn more about financing options and get a better understanding of your total monthly expenses from the experts at Zillow Home Loans.

Source: zillow.com

Chase Launches IHG Premier Business Card – 140k Point Bonus

Chase has launched a new IHG business card called ‘IHG® Rewards Premier Business Credit Card’.

The Offer

Direct link to offer

  • Chase IHG Rewards Premier Business Credit Card is offering 140,000 points after $3,000 in purchases within the first three months

Card Details

  • $99 annual fee
  • This new cardmember bonus offer is not available to either (i) current cardmembers of this business credit card, or (ii) previous cardmembers of this business credit card who received a new cardmember bonus for this business credit card within the last 24 months.
  • Card earns at the following rates:
    • 10x on IHG purchases
    • 5x on gas stations, dining, social media and search engine advertising and office supply store purchases
    • 3x on all other purchases
  • Automatic IHG Platinum status, earn Diamond Elite with $40,000 in spend
  • $50 United TravelBank cash each calendar year. Must register card in your United account
  • TSA PreCheck/Global Entry Credit
  • Spending bonus of 10,000 points + $100 statement credit after spending $20,000 within a calendar year. Additional free night after $60,000 in spend
  • Redeem three nights, get one night free

Our Verdict

The nice thing about this card is that it doesn’t count towards your 5/24 status as it’s a Chase business card. The sign up bonus is OK, although we have seen as high as 150k + $50 + annual fee waived on the personal card so I suspect we will see larger offers on this card as well. Because of that I won’t be adding this to our list of the best credit card bonuses for now.

Source: doctorofcredit.com

Calculating Margin for Stock Trading

Margin allows you to buy securities with borrowed funds. Traders find several margin balances when they open a margin trading account. It can be overwhelming trying to calculate and understand each one, but having a grasp on these figures can help you control risk and manage your profit and losses.

A stock margin calculator can help you know your margin requirements and balances. Learn more about how to calculate margin in a stock trading account.

How to Calculate Margins on Trades

Margin requirement calculators can help you track your margin levels and determine how much interest you might owe. Since trading on margin involves borrowing money, you owe margin interest that accrues daily.

A stock margin calculator also allows you to see the impact financial transactions can have on your margin balances and margin requirements. You can see how the numbers change by plugging in hypothetical buys, sells, deposits, and withdrawals.

With a margin loan, you can borrow money from your broker for any purpose, but you will owe interest on the loan based on the borrowing rate. Of course, you will also need the greater of either the $2k minimum margin requirement or 50% of the security’s purchase price in your account to buy on margin. For example, if you were to purchase 10 shares of a stock trading at $30, 50% is $1,500. However, since that is less than $2,000, you’ll need to deposit $2,000 in order to purchase the 10 shares on margin. Conversely, if you wanted to purchase 10 shares of a stock selling for $50, 50% is $2,500. In this case you would need to deposit $2,500, not $2,000, in order to make your purchase on margin.

Calculating Initial Margin

Initial margin refers to the percentage of the purchase price of a security on which the trader must use their own money — typically, at least 50%. This margin rate is set by Federal Reserve Board Regulation T. Some brokers might have stricter initial margin requirements, forcing traders to have a larger percentage of cash to establish positions.

An initial margin requirement is a straightforward calculation. It is the number of shares multiplied by the stock price multiplied by the margin rate.

Initial margin requirement = number of shares x stock price x margin rate

For example, let’s say you want to buy 100 shares of XYZ stock priced at $90 per share, with a 50% initial margin requirement. When you enter the long stock trade, the margin requirement is 100 x $90 x 50% = $4,500. The value of the long stock position is $9,000, so you only need $4,500 of equity to open that $9,000 stake.

In that example, you would need $4,500 to purchase 100 shares of XYZ stock — that is the initial margin requirement. The maximum loan value is 100 shares x $90 x 50% = $4,500. Your margin excess is $4,500.

Calculating Maintenance Margin

Once you own shares, there is a maintenance margin requirement which is often less than the initial margin amount. Maintenance margin is the minimum amount of equity a trader needs to keep in their account to continue to hold positions. Reg T sets this amount at 25%, but many brokerage firms have stricter maintenance margin rates to protect themselves against investors defaulting on their margin loans. Maintenance margin varies by stock; highly volatile stocks often feature higher margin requirements.

To calculate a maintenance margin, we’ll continue the example from above, using the same formula:

Maintenance margin requirement = number of shares x stock price x margin rate

Let’s assume XYZ stock is a fully marginable stock with a 25% requirement. You only need $2,250 of equity to continue to own the position. The formula is: 100 shares x $90 per share x 25% = $2,250.

If the stock price fell, however, you would face a margin call since your equity percentage would drop below 25%. Your margin loan would swell above 75%.

Calculating Margin on Short Stock

Here is a short stock margin calculation example. It’s worth noting that selling stocks short comes with its own set of risks since there is no limit on how high a stock value can go.

Let’s say you short sell 100 shares of XYZ stock at $90 per share. The margin requirement is 150%. Since you receive 100% cash from selling the shares, the additional margin requirement is 50% on top of that 100%.

The margin calculation is: 100 shares x $90 x 150% = $13,500.

Maintaining Adequate Margin

You are responsible for always keeping a minimum margin balance — that is the equity in your account. Let’s dive into what happens when your position value fluctuates.

Suppose you bought 1,000 XYZ shares at $10 per share and it has a 50% initial margin requirement. That $10,000 position requires $5,000 of equity. The maximum loan value is $5,000, or 50% of the purchase value.

Assuming a 25% maintenance margin, your equity must remain at or above 25% of the position value. Once the position is established, the maximum loan value is 1,000 shares x $10 x 75% = $7,500.

Now suppose the stock price rises to $15. The position value is now $15,000 and your equity has risen to $10,000. The maximum loan percentage is still 75%, but that equates to $11,250 — which means your equity must be at or above $3,750. You have excess margin of $6,250.

Now let’s say the stock price drops sharply to $6 per share. Your equity is $1,000 and you are borrowing $5,000. The maximum loan value is now: 1,000 shares x $6 x 75% = $4,500.

Since the loan balance is greater than the maximum loan value, you must resolve the shortfall immediately. The account requires a deposit of cash or marginable securities by the close of business that day.

Calculating Maximum Trade Size from Margin Excess

In this example, assume you have $6,000 of margin excess and seek to purchase the maximum number of shares of a stock with a 30% margin requirement. The stock price is $20.

Your stock margin calculator shows: $6,000 / 30% = $20,000.

At $20,000, you can buy 1,000 shares: $20,000 / $20.

Calculating Maximum Trade Value at Different Margin Rates for $10,000 Excess Margin

Here is a breakdown of maximum trade values at different margin rates for $10,000 of excess margin. You can employ a margin requirement calculator to easily determine margin levels.

25% Maintenance margin: $10,000 / 25% = $40,000
30% Marginable equities: $10,000 / 30% = $33,333
50% Initial margin: $10,000 / 50% = $20,000
75% Marginable equities: $10,000 / 75% = $13,333

It’s important to remember that different brokers will have different margin requirements. Moreover, margin rates vary by security.

Margin Calls

An online stock margin calculator can keep track of your margin balances to help avoid margin calls.

A margin call happens when the value of your margin account falls below the broker’s requirements. The brokerage firm will demand that you satisfy the call by depositing more cash or securities. You can also meet the call by selling your existing holdings. The broker can execute a forced sale if you do not act quickly enough.

The Takeaway

A stock margin calculator can help you know your margin balances when trading with borrowed funds. With changing stock prices and when holding multiple positions, account margin levels can vary minute by minute. Knowing how to calculate margin in stock trading is important in order to carefully manage your risk.

You can get started trading today on the SoFi Invest® online brokerage — and trade stocks, exchange-traded funds (ETFs), and IPOs.

Find out how to get started with SoFi Invest.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
*Borrow at 2.5% through 5/31/22 and 5% starting 6/1/22. Utilizing a margin loan is generally considered more appropriate for experienced investors as there are additional costs and risks associated. It is possible to lose more than your initial investment when using margin. Please see SoFi.com/wealth/assets/documents/brokerage-margin-disclosure-statement.pdf for detailed disclosure information.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Photo credit: iStock/erdikocak
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Source: sofi.com

How to Destroy Your Debt and 3 Things to Do Next

Subscribe: Apple Podcasts | Google Podcasts | Spotify | Amazon Music | RadioPublic | Stitcher | RSS

You work for years to pay off your debt. You’ve scrimped. You’ve saved. You’ve put your extra dollars toward debt freedom. But what do you do with your money when you’re done? How do you make the most of your finances now that you have new goals? And, more importantly, what can you do to avoid falling back into the debt trap?

That’s what this week’s “Money!” podcast is about. As usual, my co-host is Money Talks News founder Stacy Johnson. Listening in and sometimes contributing is producer and novice investor Aaron Freeman.

Today, our special guest is Marcus Garrett, author of the book D.E.B.T. Free or Die Trying. We’re going to talk about his journey to dig out of the debt hole — and what he’s done to stay out of it.

You can watch this episode below, or if you’d prefer to listen, you can do that with the player at the top of this article. Or, you can download it wherever you get your podcasts:

Don’t forget to check out our podcast page for more episodes designed to help you make the most of your money and our YouTube page for more videos.

Marcus has an amazing story, and he’s ready to share it. Plus, we talk about what to do with your money once you’ve slain the debt beast. Check out the podcast to hear his story and find out what to do with your money once you’re out of debt!

How to get out of debt

One of the best things you can do to get out of debt is to make a plan. For Marcus, Miranda and Aaron, having a plan was essential to getting out of debt — and staying out of debt. Check out some of our resources on destroying your debt:

3 things to do with your money now that you’re out of debt

Once you get out of debt, you need to figure out what to do with your money to make the most of it. After you listen to the podcast episode, check out these resources that can help you make the most of your money:

Meet this week’s guest, Marcus Garrett

After surviving the mean streets of the inner suburbs in the great state of Texas, Garrett obtained a bachelor of arts in business administration and work experience as a certified internal auditor and financial data analyst. As a senior millennial, his inflated self-esteem was amplified with participation trophies given to him without merit during his most impressionable years. Somehow he overcame these personal roadblocks to become an award-winning freelance writer on topics ranging from relationships to debt.

Don’t listen to podcasts?

A podcast is basically a radio show you can listen to anywhere and anytime, either by downloading it to your smartphone, or by listening online. They’re awesome for learning stuff and being entertained when you’re in the car, doing chores, jogging or, if you’re like me, riding your bicycle.

You can listen to our latest podcasts here or download them to your phone from any number of places, including Apple, Spotify, RadioPublic, Stitcher and RSS.

If you haven’t listened to our podcast yet, give it a try, then subscribe. You’ll be glad you did!

About the hosts

Stacy Johnson founded Money Talks News in 1991. He’s a certified public accountant (CPA) and also has earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

Miranda Marquit, MBA, is a financial expert, writer and speaker. She’s been covering personal finance and investing topics for almost 20 years. When not writing and podcasting, she enjoys travel, reading and the outdoors.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

Dear Penny: Am I Responsible for My New Husband’s Secret $200K Debt?

Dear Penny,

I am 59 and was recently married. I just learned he is in debt for over $200,000. As of right now, all of our financial stuff is separate. If he passes away, am I responsible for his debt even though it was acquired before our marriage? Also, are we better off filing our taxes separately?

-M.

Dear M.,

Getting married without telling your spouse you have $200,000 of debt is a huge breach of trust. I implore you to think carefully about whether you want to stay married to someone who would keep debt of this magnitude secret from you. But more on that shortly.

Generally speaking, you’re not responsible for debts your spouse incurred before you married. This applies regardless of whether you live in a common law state, where it’s easier for married couples to keep assets and liabilities separate. It also applies if you live in a community property state, where any assets or debts acquired during the marriage are assumed to be jointly owned. Because your husband brought this debt into the marriage, you shouldn’t be on the hook for paying it, even if he died.


I can’t tell you whether you’d be better off filing separately, given the substantial penalties involved. Only a tax adviser can tell you that. What I can tell you is that even if your husband owes the IRS, you wouldn’t be liable since he racked up that debt before you married. If you filed a joint return and had your refund intercepted, you could apply for injured spouse status. Then you could collect your half of the refund.

Now back to the elephant in the room, which is the fact that your new husband didn’t tell you about the $200,000 he owes. I have so many questions. Do you know how he acquired the debt? Is he current on payments? Did he tell you about his debt, or did you discover it on your own?

There are a lot of reasons someone could acquire massive debt. Obviously, if it’s the result of a major illness, that’s a lot different than, say, if he went into debt from gambling or chronic overspending. But even if it’s the product of pure bad luck, that’s no excuse for hiding debt from your spouse.

My biggest concern isn’t so much about the money your husband already owes. I worry about any future debt he could incur. If you live in a community property state, you could be liable for any debt your husband acquires while you’re married.

The fact that he kept such a big secret makes me question his trustworthiness. In the worst-case scenario, he could take out fraudulent debt in your name. That’s a legitimate concern, given that a spouse typically has all the information they need to steal your identity.

No matter how much you keep your finances separate, your husband’s debt affects you. Under the best of circumstances, I’m afraid that you’ll be left shouldering most of the expenses while your husband tries to pay down this debt. Maybe this marriage is worth it to you. But that’s something he should have made you aware of before you exchanged vows.

Assuming this isn’t a dealbreaker, you need to bring everything about your finances into the open. You should both review each of your three credit reports. Make sure you understand every debt that’s listed. There are no dumb questions when you’ve just discovered your spouse has six figures of debt. Be vigilant about monitoring your credit reports, as well.

It’s also essential that you make a budget and regularly review how much you’re spending and earning. Typically, I’d suggest doing this on a monthly basis. But given the amount of debt involved, this should be a weekly occurrence.

If money mismanagement is at the heart of your husband’s debt, maybe he could agree to turn over his paycheck to you and allow you to pay the bills. This would be a temporary solution. But if he has a history of reckless spending, it may help if he has less room to fail.

Regardless of how you proceed, under no circumstances should you combine finances. Don’t make your husband an authorized user on your accounts. Do not co-sign for him. Do not open any joint accounts together.

This is about way more than $200,000 of debt. Your husband kept an enormous secret from you. Trust isn’t given. It’s earned. Right now, your husband has a long road ahead.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected] or chat with her in The Penny Hoarder Community.

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Source: thepennyhoarder.com

Comparing Monster vs. LinkedIn for Employers Seeking Workers

This is the most challenging part for recruiters to grapple with, because there are so many different pricing options, and not all the prices are posted online. In the case of LinkedIn, you may need to ask its sales department for a quote.
You can get a taste of what Monster has to offer through a free trial, but you can’t post a job for free. While there are no fully free options, Monster offers plenty of support resources to keep your recruitment efforts fruitful and cost-effective.
You can contact LinkedIn via live chat support, but not on the phone. The website has a help center where you find “how to” guides or submit a query.
LinkedIn is the biggest professional networking site in the world, with more than 750 million members in 200 countries.
Monster offers a library of training content to empower hiring managers and recruiters to make the most of the job board’s tools and features. Plus, the company offers customer support by phone or email during business hours in case you get stuck.

What is Monster?

Now, with the ability to simply syndicate job listings, create sponsored jobs, boost team collaboration and take advantage of the job site’s artificial intelligence, there’s a reason why ZipRecruiter has been named the No. 1 website for employers’ hiring needs. It has a nearly perfect rating on TrustPilot, taking it to the top spot above all the other job boards.
LinkedIn allows you to contact potential candidates who fit your needs, so you can encourage them to apply. It also allows you access to a vast network of professionals.
Using applicant tracking, these online platforms can help ensure that your job posts are up-to-date, eliminating friction for job applicants and making the interview process more efficient. They’ll help you find the right candidate.
Privacy Policy
Privacy Policy

Cons
Once job seekers join LinkedIn and create LinkedIn accounts, they can build a profile and link themselves to other professionals they’ve worked with or who they know. Networking is a good way to look for a job, and LinkedIn says roughly half of hires on the site result from a personal connection.

Customer Support

You can contact a Monster customer service representative via email or on the phone. Phone hours are 9 a.m. to 5:30 p.m. EST Monday through Friday. Monster says it responds to emails within one business day.
You can pay to use “LinkedIn Recruiter,” which is typically used by larger companies; or “LinkedIn Recruiter Lite,” which is for smaller companies. With LinkedIn Recruiter, you can create an unlimited number of job postings.

Resume Search

You have to reach out to LinkedIn to get a price quote for LinkedIn Recruiter, which is typically used by larger companies, and which allows you to create an unlimited number of job listings. However, a slimmed-down version called LinkedIn Recruiter Lite costs 9 per month, or .95 per month if you sign up for a year.
LinkedIn can help employers connect with quality candidates, especially for white-collar positions. Those professionals are the ones who mostly use the networking site in their job search.

The Bottom Line

Is your business struggling to find qualified job candidates? In that case, you’ve no doubt considered using a popular online recruitment platform like Monster or LinkedIn. But what’s the difference between the two? Which one is best for your needs?
Here’s a head-to-head comparison between the two:
You can create a job listing for free using a service called LinkedIn Jobs, but know that LinkedIn uses a pay per click model to promote your job vacancies.
Each of these popular recruitment platforms have their pluses and minuses, depending on what you’re looking for.
With Monster, the ability to proactively search through resumes, text and email job seekers or narrow your search parameters can only be used when paying for a Standard or Premium plan, which cost 9 and 9 per month, respectively.
Free options are few. You can create a job listing for free using a service called LinkedIn Jobs. LinkedIn offers a one-month free trial for its “Recruiter Lite” option. Monster doesn’t have a fully free option for employers. (ZipRecruiter, for example, lets you post jobs for free for four days.) <!–

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Monster and LinkedIn have a lot in common when it comes to their main service, but the key difference is that some features are only available with higher cost plans on Monster. For example, the ability to proactively search through resumes, text and email job seekers or narrow your search parameters can only be used when paying for a Standard or Premium plan.