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11 Super-Simple Ways to Build Wealth in 2022

A wealthy couple
Jacob Lund / Shutterstock.com

To paraphrase William Shakespeare, some people are born wealthy and others achieve wealth. If you weren’t lucky enough to be in the first group, then it’s time to get going on your self-made fortune.

Think that can’t happen? You’re wrong. Pathways to wealth are everywhere. Why shouldn’t you take them?

Some of these smart choices will save you money upfront. Next, use that money to make more money through strategies like fractional investing and online wealth management.

Want to put yourself on the road to riches? These tactics can help.

1. Used Chevy or new Mercedes?

Save $100 a month, earn 1% on it and after 20 years you’ll have $26,545. Enough for a used Chevy.

Boost that percentage to 15%, and you’ll end up with $124,569 after 20 years. That’s nearly $100,000 more: enough for a new Mercedes.

Of course, earning 15% isn’t easy (the stock market’s average return is about 10%) and never guaranteed, but here’s something that is guaranteed: You won’t be earning big returns at the bank.

If you want to super-charge your savings, you’ve got to invest.

Plenty of people grow up thinking that “investing” is something only rich people do. Not so! You can start your investing journey with as little as $1, without paying a dime in fees, thanks to an investing app called Public.

With the Public app, you take part in “fractional investing,” which means buying little slivers of companies, funds or crypto assets. Take your choice from among thousands of exchange-traded funds (ETFs) and stocks.

Start by signing up and telling the app what investing experience (if any) you have and what your investing goals are. According to Public, 90% of users are in it for the long haul.

There’s no charge to join, although you’re allowed to leave tips on transactions. And again: You can start with as little as $1. What else can you get for a buck these days? Even dollar stores are raising their prices!

Download the app now, and take the first step toward getting rich instead of just getting by.

2. Chop your car insurance bill by $700 a year

Auto insurance is a must. You know what isn’t a must? Paying too much for coverage.

People who switch to Progressive for their auto insurance can save up to $700 – not just initially, but every year. Imagine what you could do with an extra $700 in your budget.

Emergency fund? Extra payment against your mortgage? Retirement planning? It’s your call. Point is, those are dollars that are now working for you instead of for someone else.

Incidentally, a cheaper premium doesn’t mean you’re cheaping out on protection. Progressive is known for its strong coverage. Request your free quote now and see how much you can save this year, and every year.

3. Let mortgage savings put your kids through college

If you’re currently paying about 4% on your mortgage, refinancing could lower your rate to as low as 2.376%.

Not much of a difference, right?

Well, if your mortgage is $300,000, that lower rate would mean paying about $94,000 less in interest over the life of the loan. That’s enough to put your kids through college, start your own business or retire earlier.

Maybe you know the savings would be significant, but haven’t refinanced yet because it seems so complicated. It isn’t. A direct lender called Better will make it child’s play.

The simplifying starts with a near-instant rate quote, and continues through the refinancing process. Better doesn’t charge origination fees or lender fees, and you can get a mortgage interest rate lock if you like.

Millions of homeowners around the country are saving every month because they refinanced. But the experts are saying these low rates won’t last. It’s do-it-or-lose-it time.

Get your new, personalized rate today, and make strides toward a better tomorrow.

4. Stop worrying about expensive household breakdowns

For most of us, our home is our most valuable asset. We put a lot of money down to buy it and pay a lot of money each month to keep it. Sometimes we’re stretched pretty thin financially, so when things break down it can be tough to cover the fixes.

The heating/cooling system grinds to a halt. A major appliance gives up the ghost. And why are the lights flickering — could it be the electrical panel?

What you need is a full-time maintenance person.

The next best thing? A home warranty from America’s 1st Choice Home Club. You can choose from among several coverage plans that cover issues with appliances, plumbing, heating, electrical systems and more. You can use your own technician or let America’s 1st Choice send someone over.

A breakdown happens in the middle of the night? Doesn’t matter. The in-house service team is available 24/7.

All this starting for as little as $390 a year.

Homeownership is great. But when things go wrong — and they will! — we can no longer call the landlord. We are the landlord, and we might go into debt just to keep things running smoothly.

Stop worrying about household breakdowns, and the high costs that come with them. Get a free quote in 30 seconds.

5. Get paid to watch videos and take surveys

Think of all the time you spend waiting somewhere. Waiting for the spin cycle in the laundromat. Waiting at the auto shop until the mechanic can give you an estimate. Waiting for your kid’s sports practice to be over. Waiting in an exam room for the doctor, who’s running 20 minutes late.

You could spend that time watching funny cat videos — or you could use that time to make some money. Our friends at InboxDollars can help you with the latter.

InboxDollars is a rewards site that pays you actual cash to watch videos and take surveys. Seriously: Why not use your downtime to make money?

Those aren’t the only ways to earn money with InboxDollars, however. You can also do some online shopping, click on daily emails, scan your grocery receipts into the “Magic Receipts” function, complete special offers (especially those for things you’d planned to buy anyway), play games and even help others by making donations to various causes.

From now on, get paid for waiting. It takes seconds to sign up, and you’ll get a $5 welcome bonus just for joining.

6. Find cheaper homeowners insurance in 60 seconds

Again, our homes are usually our most valuable asset. It’s essential to make sure they’re protected in the event of an emergency. But how do you know whether you’re overpaying for homeowners insurance?

Simple: You ask Lemonade for an estimate. It takes only a few seconds to find out whether you could be keeping more of your hard-earned money each month. Lemonade’s coverage starts from just $25 a month.

Homeowners insurance isn’t just about fixing things up after a fire, though. The dog bit the mailman? Lemonade can help with legal and medical payments.

A thief steals your stuff? Lemonade has your back, even if the theft happened away from home.

Your home rendered unlivable due to that fire? A homeowners insurance policy through Lemonade will cover expenses until you can get back into your home sweet home.

Why overpay with your current carrier? Find cheaper home insurance in seconds.

7. Add $1.7 million extra to your retirement

A recent Vanguard study indicated that a self-managed $500,000 investment would grow into $1.69 million in 25 years, on average. Sounds pretty good, huh?

However, with professional help, that same $500,000 would have turned into $3.4 million. In other words, a quality financial adviser could double your retirement nest egg!

At least talk to a pro, especially when finding one is free and easy. SmartAsset is a free service that will match you with a qualified money manager who can help you put your money where it will do you the most good.

Bank interest rates don’t beat inflation, so the value of your savings erodes over time. Stocks and other investments have historically beaten inflation, but a lack of knowledge and experience leaves you vulnerable to dodgy advice or financial scams.

SmartAsset will put you in touch with up to three local, experienced professionals, all of whom are fiduciaries, meaning they’re required to put your best interests over their own. They can give you a clear picture of where you are now, and help you develop the right plan for the long term.

Since the first appointment is often free, what have you got to lose? If you’re ready to at least consider a local adviser, check it out.

8. Protect your wealth with a gold IRA

Not everyone is comfortable with traditional retirement investments. Some people are opting for a “gold IRA,” which is just what it sounds like: gold, gold and more gold. This can be bullion (coins or bars) only, or also include gold stocks, ETFs and mutual funds. Gold is one of the few commodities that the Internal Revenue Service approves as an IRA investment. It’s a finite resource, rather than one that can be controlled by governments or banks.

Sound intriguing? Time to educate yourself, with help from American Hartford Gold.

This family-owned company can help you set up a gold IRA that meets all IRS standards. Chief among them: The gold must be kept at an approved depository. (No, you can’t bury it in your backyard.)

There may be less than 20 years’ worth of mineable gold remaining in the ground. As the saying goes about real estate, they ain’t making any more of it. Demand for gold is rising all over the world, especially in the electronics industry, so your IRA has a great chance to increase its value until you’re ready to retire.

American Hartford Gold has an A+ rating with the Better Business Bureau, and a 5-star rating with TrustPilot. Get your free investors kit now.

9. Diversify your portfolio with art collected by billionaires

Billionaires didn’t become billionaires by making bad investment choices. And billionaires have been collecting art for generations; for example, the Rockefellers amassed a collection that sold for an eye-popping $835 million in 2017.

But it isn’t just the ultra-rich who can invest in art by Banksy, Warhol and Picasso. With a new investing app called Masterworks, you can invest in iconic artworks as well – right alongside deep-pocketed folks like Bill Gates, Oprah Winfrey and Jeff Bezos.

Blue-chip art outpaced the S&P 500 from 1995-2021, which is impressive considering that historic bull run we’re now witnessing. The Wall Street Journal recently reported that art is “among the hottest markets on Earth.”

Art also has one of the lowest correlations to stocks that you can find. In other words, art’s value doesn’t have anything to do with the stock market’s wild swings, which makes it a good hedge.

Masterworks is an invitation-only art investment platform. So if you want to invest like a billionaire, request your invitation to join here.

10. Borrow $50,000 to erase your debt

Ever feel like you’ll never get out from under your credit card debt? Consumer debt is way too easy to get into, yet sometimes feels impossible to escape. You pay as much as you can each month, but the high interest rate just keeps piling on the dollars.

AmOne is a free service that matches people like you with loan providers. When you fill out one simple form online, AmOne finds lenders who want to fund your loan of up to $50,000.

Once you’ve been approved and agree on the terms, it can take as little as 24 hours to get the cash. Use the money to erase all your debt at once, then pay back the personal loan at a lower interest rate than those credit cards were charging you.

The service does only a “soft” credit pull, rather than have you going directly to lenders and getting “hard” credit pulls that affect your credit score. And speaking of your credit score: You don’t need an “excellent” rating to be considered, since AmOne’s lending partners are willing to work with people of varying credit ratings.

AmOne has a 4.7-star rating (out of 5) on TrustPilot. It’s free to check your rate online, and it literally takes just one minute.

11. Pay no interest until 2023 with a better card

Another way to deal with high credit card balances? Get another credit card. Specifically, get a 0% APR card, transfer those balances and get charged no interest while you’re paying down the debt.

There’s another good reason to get a 0% APR card: to get free financing on a big-ticket item.

Suppose your HVAC system goes out or your car needs a few thousand bucks’ worth of repairs. Rather than deplete your emergency fund, pay with that new 0% APR card to give yourself some breathing room while you pay it off.

How much breathing room? Anywhere from 15 to 21 months, depending on the card you choose.

You’ll need a plan to go along with that new card: no more using the other cards with unnecessary splurges while you pay off the 0% APR card. It doesn’t make sense to run up more debt while you’re paying off old debt.

But with a 0% card, you’ll pay no interest. Think of all the interest you’d been paying, and what those dollars could have done for your long-term financial security. With a 0% APR card, you won’t have to waste any more of your hard-earned dollars on interest.

Compare these top cards and discover the best one for you.

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

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Source: moneytalksnews.com

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Hazard Insurance vs. Homeowners Insurance

If you’re a soon-to-be homeowner, your lender might mention that you’re required to purchase hazard insurance. You may be wondering, ‘is hazard insurance the same as homeowners insurance?’ In fact, hazard insurance is a part of your standard homeowner’s insurance policy.

Let’s look at the ins and outs of hazard insurance, including what it covers and what it doesn’t, and how much you can expect to pay for it.

Is Hazard Insurance the Same as Homeowners Insurance?

A common misconception is that hazard insurance is the same as homeowners insurance when, in fact, it’s a part of it. That’s because people sometimes refer to homeowners insurance as hazard insurance. You can think of it as a piece of fruit in a fruit and cheese basket — not the entire kit and caboodle.

Hazard insurance typically refers to the protection of the structure of your home and additional structures on the property (like a shed, deck or detached garage), whereas homeowners insurance as a whole also includes coverage for liability, additional living expenses, and personal belongings.

Recommended: Homeowners Insurance Coverage Options to Know

What Is Hazard Insurance?

Hazard insurance is part of homeowners insurance, and it typically covers the structure or dwelling, but not liability, personal belongings, or additional living expenses. Because it’s a part of a standard homeowners insurance policy, it cannot be purchased as a standalone policy. Rather, it’s folded into your homeowners insurance.

Hazard is oftentimes confused with catastrophic insurance, which is a standalone policy that covers against perils that aren’t included in a standard homeowners insurance policy, such as floods, earthquakes, and terrorist attacks.

What Does Hazard Insurance Cover?

Should there be damage to the actual structure of your home, the hazard insurance portion of your homeowners’ insurance policy will offer a payout. This usually includes damage or destruction to the actual building of your home from natural events, such as extreme weather or a natural disaster.

However, what specifically hazard insurance covers will depend on whether it’s a named perils or an open perils policy. Read on for more details on what those entail.

Named Perils

Named perils essentially means events, incidences, or risks that are “named” or “listed” under your plan as covered. In other words, if it’s not listed, then it’s not covered.

A named perils policy typically protects against 16 specific types of perils, including:

•  Windstorms or hail

•  Fire or lightning

•  Explosions

•  Riots or civil disruption

•  Smoke

•  Theft

•  Falling objects

•  Vandalism or malicious mischief

•  Damage caused by vehicles

•  Damage caused by aircraft

•  Damage from ice, snow or sleet

•  Volcanic eruption

•  Accidental discharge or overflow of water or steam from HVAC, a plumbing issue, a household appliance or a sprinkler system

•  Accidental cracking, tearing apart, burning or bulging of HVAC or a fire-protective system

•  Freezing of HVAC or a household appliance

•  Accidental damage from electrical current that is artificially generated

A homeowners insurance policy that is a named perils insurance policy is usually less expensive than an open perils policy.

Open Perils

While a named perils policy will only cover what’s listed in your policy, an open perils policy will provide coverage unless something is specifically excluded and noted as such in your policy.

Typical exclusions under an open perils policy include:

•  War

•  Nuclear hazard

•  Water damage from a sewer backup

•  Damage from pets

•  Power failure

•  Mold or fungus

•  Damage due to an infestation of animals or insects

•  Negligence and general wear and tear

•  Smog, rust or corrosion

An open perils policy tends to be for newer homes or homes in low-risk areas. Additionally, because an open perils homeowners insurance policy tends to be more comprehensive, they typically cost more compared to a named perils policy.

What Isn’t Covered by Hazard Insurance?

Now that we’ve looked at what hazard insurance may cover, here’s what typically isn’t covered.

Flood Coverage

Flood coverage isn’t part of a standard homeowners insurance policy, so you’ll need to take out a separate policy if you want it. In fact, if you live in an area that’s a designated high-risk flood zone, you may be required to take out flood insurance.

The cost of the policy generally hinges on how much of a risk your home is, which factors in your location, and the age of your home.

Earthquake Coverage

Earthquake coverage is another item that hazard insurance doesn’t offer, so if you live in an area that’s subject to earthquakes, you may want to get an earthquake insurance policy. This can either be tacked on to an existing policy as a rider or purchased separately.

When you purchase earthquake coverage, your home is usually protected against cracking and shaking that can damage or destroy buildings and personal possessions. But if there’s water or fire damage because of an earthquake, then that generally would be taken care of by a standard homeowners insurance policy.

How Much Does Hazard Insurance Cost?

As hazard insurance is part of a standard homeowners insurance policy, you won’t need to pay anything extra. According to the most recent data from the Insurance Information Institute (III), the average cost of a homeowners policy in the U.S. is $1,249.

Keep in mind that the cost can vary depending on a host of factors: the location of the home, the cost to rebuild, the size and structure of your home, your age, your credit score, your deductible and the type of policy and amount of coverage you desire.

Do You Need Hazard Insurance?

In short, yes. As you will need homeowners insurance if you are taking out a mortgage on your home, and hazard insurance is folded into homeowners insurance, then you’ll need hazard insurance.

When shopping around for hazard insurance, think about what is required by your mortgage lender, and what coverage amount would be suitable for your home and situation. Play around with different deductibles and coverage amounts to see how they would impact your premium, and don’t forget that discounts can also lower the cost of your insurance.

The Takeaway

Hazard insurance and homeowners insurance aren’t the same thing. Rather, hazard insurance refers specifically to coverage for the structure of your home and is an element of homeowners insurance. What your hazard insurance policy will cover depends on whether you have a named or open perils policy, though it generally won’t extend to damage from earthquakes or floods.

If you’re taking out a mortgage on your home, you’re generally required to get homeowners insurance — and, by extension, hazard insurance. SoFi has teamed up with Lemonade to make it easy to get homeowners insurance. Simply chat with Lemonade’s A.I. bot to get an insurance plan crafted for you, and then Lemonade will send a quote to your lender.

Check your price on homeowners insurance today.

Photo credit: iStock/MicroStockHub

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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.
SoFi offers customers the opportunity to reach the following Insurance Agents:

Home & Renters: Lemonade Insurance Agency (LIA) is acting as the agent of Lemonade Insurance Company in selling this insurance policy, in which it receives compensation based on the premiums for the insurance policies it sells.

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Source: sofi.com

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7-Step Guide to Home Maintenance Will Help You Save Money

If you’re ready to dive into the world of home ownership or move into a new home, don’t get so caught up in the excitement that you make a big mistake.

Ready to stop worrying about money?
Your house can’t talk but it can send you messages. If it’s crying for help, ignoring the messge could cost you money later.
Maintenance is usually cheaper than repairs, so keeping up with checkups around your home can help you avoid a repair bill later. It’s smart to figure out how much to budget for home maintenance. Here are the things you should consider:

7-Step Home Maintenance Plan for 2022

When deciding to DIY or hire a pro, ask yourself how much experience you really have. Things often look easier to do on TV or in a YouTube video than they really are.
You can save on other utility bills, too, with attention to your consumption habits. For instance, some simple reductions in water use could mean saving money on water bills.

1. Don’t Ignore Your House’s Cries For Help

Sometimes it’s necessary to call in the pros when tackling home maintenance or home improvement projects.
All homeowners policies are not created equal, and they can also vary widely based on where you live and in what kind of dwelling. It’s important to understand when it can help you out — and when it can’t. Here’s an article that will help you learn what home insurance covers.

  1. Anything involving water. A small wet spot can be the sign of a leak somewhere. Eventually that leak will grow and possibly destroy floors, walls, furniture, and more. A leaky faucet, running toilet, or dripping water heater can cost more in water bills than the repair would.
  2. Anything involving electricity. Flickering lights, bad outlets or switches, tripping breakers, and GFI outlets that won’t reset can be signs of electrical problems, which could lead to fires.
  3. Pests. Rodents and bugs can do lots of damage if left alone.
  4. Peeling caulk and paint. Once the protective caulk or paint is gone, water gets in and causes damage.
  5. Broken or malfunctioning HVAC. Problems with your heating, ventilation and air conditioning (HVAC) could means you’re too sweaty or too chilly. But temperature swings inside the home can lead to problems. Additional humidity could cause mold and cold temperatures could cause pipes to freeze.
  6. Cracks. Small cracks are normal. Big or changing cracks aren’t.
  7. Smoke alarm and carbon monoxide detectors. Working detectors save lives. Change the batteries regularly.
  8. Darkening ceilings near fireplaces. Dark places or a sooty smell can mean the fireplace isn’t drafting properly, which can let deadly gasses inside.

2. Keep Up With Home Maintenance

You can save some pennies with some home maintenance and repair tips we Penny Hoarders learned in 2021. We’ve gathered them into this seven-step guide to home maintenance and repairs.

  • Prevent moisture problems. Water can be evil when it shows up in places it shouldn’t. Routinely check your gutters, sump pump, water heater, faucets, drains, septic tanks, and irrigation systems.
  • Maintain appliances and equipment. Do annual HVAC maintenance and change filters regularly. Check the connections in the laundry room and clean the dryer vent. Change filters and clean the range hood in the kitchen.
  • Keep up the exterior. Keep dirt away from the house so water can drain correctly. Inspect the paint and siding to make sure they’re looking good and doing their job of protecting your house. Maintain caulk around openings. Inspect chimneys. Service the electric garage door.

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3. Know When To DIY and When To Use a Pro

Financial experts recommend putting away about 0 a month for home maintenance. That way, you’ll have ,400 a year, which can hopefully cover the maintenance and possible repairs.
Are you among the people planning home maintenance and repair projects? If so, chances are you don’t have a huge stash of cash sitting in your home maintenance budget.
Judging by the amount we’re spending on home maintenance and remodeling, we must be noticing a lot of flaws.
A professional handyperson can handle a wide variety of jobs like caulking, painting, gutter cleaning, patching drywall, installing tile, hanging objects, and installing fixtures. Making a list of what you want done can be helpful so you can prioritize if you only have a handyperson hired for a few hours. .

4. Get Bids for Home Projects

Do you really want to DIY and regret it?
Some simple things can help you get a lower electric bill each month.
Disasters or repairs can ruin your budget. Homeowners insurance can help protect your property and belongings from damage and losses. It also provides liability coverage.

  • Learn about the project by watching videos. This will help you know if someone’s time estimate seems way off.
  • Ask for recommendations. Neighbors, friends, and family often know good people who do good work. Also, real estate agents will be able to tell you who they recommend to get homes ready for sale.
  • Websites and apps make it easy to research who can do what you need. Some even allow you to post a request for someone to bid on your project.
  • Read reviews before you hire someone.

Don’t ignore home repairs, and you’ll save in the long run. Here are eight you can’t afford to put off.

A man hangs his clothes out to dry on a clothesline in his backyard.
Getty Images

5. Do What You Can to Lower Electric Bills

If you need professional help for your home, getting bids on home projects can save you lots of money and time.

  • Seal cracks and leaks.
  • Upgrade to more energy-efficient equipment.
  • Use fans.
  • Air-dry laundry as much as possible.
  • Change to LED lighting.

Experts say to avoid DIYing anything involving electricity (especially 220 circuits) or water unless you have experience. Things can go bad very quickly.

6. Know What Your Home Insurance Covers

Tiffani Sherman is a Florida-based freelance reporter with more than 25 years of experience writing about finance, health, travel and other topics.
When looking for the right expert for your home project:
Inspectors look at more than 1,000 things throughout a house. In general, those things are:

7. Home Buyers: Don’t Skip Home Inspections

Following this eight-point home inspection checklist could end up throwing cold water on your plans, but it will also prevent buyer’s remorse if you’ve fallen in love with a money pit.
For many people, having to spend lots of time at home can highlight the flaws in their living situations. Either we need to do a bit of remodeling to bring things up to date or we need some maintenance to keep things running smoothly.
Don’t be afraid to ask questions and discuss exactly what the estimate includes and what the payment terms are. It’s your home.

  • Structural components
  • Roof
  • Attic and insulation
  • HVAC systems
  • Plumbing and water
  • Electrical and wiring
  • Outside the house
  • Appliances

In today’s crazy real estate market, forgoing the inspection could make your offer more attractive to the seller, but the average inspection cost of 0 could save you thousands of dollars down the line.
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But it isn’t always easy to know what is covered and what isn’t. And when is it worthwhile to file a claim?

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How to Pay for Emergency Home Repairs, So You Can Move on ASAP

A home’s mechanical systems, exterior features, and large appliances don’t last forever. Even with regular maintenance, sometimes an expensive-to-fix item will fail. So figuring out how to pay for emergency home repairs is something homeowners may want to think about before that emergency happens.

How Much Do Common Home Repairs Cost?

From roof to foundation, there are a lot of things in and on a home that might need to be repaired, and some of those things might be emergency home repairs at some point.

Roof

A home’s roof has a certain life expectancy, generally based on the material used. A roof made of asphalt shingles might last from 15 to 20 years, while a concrete or clay-tiled roof could last for more than 50 years.

Regular roof inspections are a good way to identify any minor problems, which may typically cost from $150 to $400. Minor repairs might include:

•   Gutter cleaning.

•   Patching leaks.

•   Replacing shingles.

•   Repairing flashing.

Major issues found during a roof inspection might cost up to $7,000. These could include:

•   Substantial water damage.

•   Chimney repair.

•   Sagging or shrinking roof.

•   Environmental issues, such as mold.

Replacing a roof, a major expense, may be necessary at some point in the life of a home. For an average-sized home, a completely new roof can cost $8,000 or more.

Foundation

Foundation issues can show up as cracks in a home’s walls, floors that are not level, gaps around windows, or doors that don’t close properly. Fixing these symptoms of a foundation issue won’t fix the underlying problem, but fixing the foundation at the earliest sign of the symptoms may mean a less costly foundation repair.

Hiring a structural engineer can be a good first step if there appear to be major foundation problems, as they won’t be trying to sell a product to fix any potential problems, so will likely be unbiased. A structural inspection can range from $300 to $600.

•   Cracks in a foundation that don’t affect the structure are minor repairs, but are best not ignored, lest they lead to major issues. Potential cost: between $250 and $800.

•   A leaking foundation might be the cause of those cracks. Waterproofing a foundation, which may involve excavating around the foundation, installing tile drains, filling cracks, and then coating the structure with a sealant, can cost anywhere from $2,000 to $7,000.

•   A house with a settling or sinking foundation may have flooring that is warped or sloping, doors and windows that don’t open and close properly, or even exterior cracks, or other apparent issues. The cost generally depends on the type of repair. Raising a house using piers can cost between $1,000 and $3,000, while mudjacking might be between $500 and $1,300.

Water Damage

Water damage in a basement might be due to flooding from a storm or broken water line, for example, and is best fixed quickly so mold doesn’t grow and become another issue to take care of. In addition to being an unpleasant sight, standing water can cause structural or electrical issues in a home. Extraction of the water is generally the first step in this type of repair, followed by any necessary structural repairs.

•   For simple fixes, such as cleaning up after an overflowing toilet, the cost might be around $150.

•   To extract gray water, which is water from bathtubs, sinks, or washing machines, extraction and related repairs can cost $3,000 on average.

•   Water that contains fecal matter from sewage backups is called black water. This is the costliest type of repair because it poses a significant health hazard. The cost to extract black water and make related repairs can be as high as $20,000.

Mold

If the above water issues are not fixed in a timely manner, mold can grow on the surfaces, requiring additional necessary repairs. In addition to damaging any surface mold grows on, it’s also a serious health hazard, potentially causing allergic reactions, asthma attacks, and skin irritation. Mold remediation costs average between $1,500 and $3,000.

Pests and Rodents

Pests and rodents in a home can be more than just annoying. Infestations might cause major damage to a home if left untreated. One-time pest control costs around $250 to $350 on average. Ongoing services — sometimes monthly, quarterly, or annual recurring treatments — may cost from $50 to $400, depending on the frequency.

•   Damp areas can attract pests, such as cockroaches. The average cost for getting rid of them is $150 to $400, and it might take more than one visit to completely eradicate them.

•   Attics can be inviting spaces to rodents like mice, rats, or squirrels, or other animals such as raccoons or bats. Damage might be to woodwork, insulation, or wiring and cost between $150 and $400 to repair.

HVAC

A home’s heating, ventilation, and air conditioning (HVAC) systems control the regulation and movement of air throughout the building. Like other components in a home, it’s wise to have a HVAC system inspected regularly to catch any problems before they become serious. A standard tune-up for an HVAC system might start at $99, with any potential repairs added to that. Some companies might offer ongoing maintenance plans, which could be a cost saver over time.

•   Furnace repairs might be for a blower, ignitor, flame sensor, heat exchanger, circuit board, or valve. The cost can vary depending on the part and whether it can be repaired or if it needs to be replaced, and the labor charge for doing the repair. Simple repairs may be as little as $100, while more extensive part replacements can be as much as $1,500.

•   Like furnaces, air conditioners have a lot of individual parts, any of which might need to be repaired or replaced at some point. Capacitor replacement is a common air conditioning cost, and can range between $90 and $475. One of the more expensive costs is an air compressor replacement, which can be between $1,350 and $2,300. Costs will vary by model of the air conditioner and servicer.

Electrical

Electrical issues in a house can vary from minor repairs, such as replacing an outlet, to wiring overhauls that may require professional help.

•   Hiring an electrician to replace a home’s outlets can cost around $100 to $250. For someone who is confident in their DIY skills, this relatively simple job can be done for about $5 per outlet.

•   Replacing a circuit breaker or the entire electrical panel is something homeowners might leave to a professional. Costs will depend on the number of breakers being replaced or, in the case of replacing the electrical panel, how many amps. Circuit breaker replacement might cost about $50 per breaker. Panel replacement or upgrade can be anywhere from $1,000 to $4,000.

•   Rewiring a home can be quite expensive and include other repairs, such as plaster or drywall repair. To rewire an entire home, a homeowner might expect to pay between $3,000 and $8,000.

Personal LoansPersonal Loans

Ways To Finance an Emergency Home Repair

Even with regular inspections and maintenance, sometimes emergency home repairs are necessary. Paying for these repairs might involve using a variety of sources, depending on what is available and a person’s individual financial circumstances.

Homeowners Insurance

Homeowners insurance may be the first source most homeowners look to when needing to pay for emergency home repairs. The policy will stipulate what is covered, how much the company will pay, and any amount the homeowner might be responsible for, such as a deductible. Some things a typical homeowners insurance policy might cover are costs to repair or rebuild after a disaster, replacement of personal belongings that were destroyed because of a disaster, or the costs of alternative housing while repairs are being made or a house is being rebuilt.

Emergency Fund

If there is a sufficient amount in an emergency fund, paying for an emergency home repair with cash on hand is an option that won’t incur interest. How much to save in a home repair emergency fund will depend on the home’s size, age, and value. Older or more expensive homes might mean higher repair costs.

A typical recommendation is to save between one and four percent of a home’s value in a home repair emergency fund. For a typical American home valued at just over $300,000, this means having between $3,000 and $12,000 saved for emergency home repairs. This is certainly a goal to work toward, but even $1,000 in savings can be helpful.

Home Equity

Homeowners who have built up equity in their home may choose to use that equity to pay for emergency home repairs. Using this type of financing, however, does come with some risk because the home is used as collateral. If the borrower defaults, the lender may seize the home as a way to repay the debt. There are two types of loans that are based on a home’s equity: home equity loans and home equity lines of credit (HELOCs).

A home equity loan is a fixed-rate, lump-sum loan. It has a set repayment term, and the borrower makes regular, fixed payments consisting of principal and interest.

A HELOC also uses the equity a homeowner has built up, but the borrower does not receive a lump sum, instead accessing the loan funds as needed until the loan term ends. Funds can be borrowed, repaid, and borrowed again, up to the limits of the loan. HELOCs are variable-rate loans and consist of two periods: a draw period and a repayment period. The draw period is the time during which money can be borrowed, and might be 10 years. The repayment period is the time during which the loan is repaid and might last for 20 years. The combination of the two would make this example a 30-year HELOC.

Assistance Programs

If emergency home repairs are required, but the homeowner can’t afford to pay for them, assistance programs might be an option to look into.

•   Government loan or grant assistance. The U.S. Departments of Housing and Urban Development (HUD) , Agriculture (USDA) , and Veterans Affairs (VA) offer grants and loans to eligible homeowners for home repairs and improvements.

•   Disaster relief . HUD offers several programs for homeowners affected by federally declared disaster areas. HUD partners with other federal and state agencies to provide relief in the form of mortgage assistance, relocation, food distribution, and other types of disaster relief.

•   Community Assistance Programs. Funding assistance may be able to be found by looking at local sources, such as county or city governments or charities. A good place to start a search is through HUD’s state listings .

Credit Card

Using a credit card to finance emergency home repairs might be the first option some people think about. It can certainly be a quick way to pay for such repairs. There are pros and cons to using a credit card for this purpose.

If the credit card is a zero-percent-interest card — and the balance can be paid in full before the promotional period ends — this can be a way to pay for an emergency home repair without paying interest.

Credit cards are more likely to have high interest rates, though, which can add a significant amount to the account balance if not paid off quickly. Credit cards also come with borrowing limits. A major emergency home repair might max out this limit or even exceed it. Using all available credit can potentially have a negative effect on a borrower’s credit score.

Should I Get a Home Repair Loan?

Another option to pay for emergency home repairs might be a home repair loan, which is a type of personal loan.

•   An unsecured personal loan does not use collateral, like a home equity loan or HELOC, so the borrower is not risking losing their home if they can’t repay the loan. The potential loan value is also not limited by the amount of equity in the home.

•   An unsecured personal loan may be funded more quickly than a home equity loan or HELOC. Because there is no collateral to determine a value for, this cuts out a potentially time-consuming step included in secured loans.

•   Personal loans can be used for a variety of reasons, not just emergency home repairs. If there are expected repairs, planned repairs, or home renovations that might make a home more livable, an unsecured loan can be a good option.

Awarded Best Personal Loan of 2021 by Forbes.
Low, fixed rates starting at 4.99% APR with Autopay.

The Takeaway

It’s probably safe to say that nobody likes to think about emergencies. But it’s wise to be prepared in the event that one arises. If a personal loan is the option that works best for your financial situation, a SoFi Personal Loan might be one to consider.

Unsecured personal loans from SoFi have competitive interest rates, no fees, and terms that can work for a variety of budgets and financial needs.

Find your rate in just one minute.

SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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Source: sofi.com

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25 Ideas on How to Lower Electric Bill

Lastly, poor insulation can be a huge drain on energy efficiency. If you have major cracks in your window frames, walls, baseboards, and more, you are basically watching your hard-earned dollars fall through those gaps. Likewise, if doors are left open (especially the garage door or patio door) haphazardly you are bleeding cold or warm air (depending on the season) through those areas, causing your home heating or cooling to work harder, thus costing you more money on your electric bill.
Most electric bills are tabulated by multiplying the rate you pay per kilowatt of energy by the total hours of device and electricity usage that month. This gives you your total electric usage in kWh — kilowatts per hour. From this formula, we can see that electric bills are based on how many hours of electricity you use each month.
Colorado-based writer Kristin Jenny focuses on lifestyle and wellness. She is a regular contributor to The Penny Hoarder.
According to the DOE, lowering the temp to 120 degrees is perfectly fine for the majority of the population. If you or a member of your household has a chronic respiratory disease or a suppressed immune system, though, it may be best to keep your water heater set to the default temp.
To reduce your electric bill, take stock of how many hours of electricity you use a day (some things like water heaters and refrigerators will always be running, and that’s ok) for things like the dishwasher, washer and dryer, floor lamps, and accessories such as stereo equipment.

25 Ways to Reduce Your Electric Bill

This dreary news is coupled with the prediction that it may be a colder winter in many parts of the country, too.

1. Get a Free Home Energy Assessment

When the heat is high, don’t let any precious warm or cool air escape due to drafty doors and leaky windows. Seal these money-draining spaces with inexpensive draft tape, often ranging from to on popular sites like Amazon.

2. Seal Cracks and Leaks Is How to Lower Electric Bill

When you leave for work or go to sleep, turn down the thermostat. At night you can add a few more blankets to the bed or even turn up the eclectic blanket, and if you’re at work, you won’t know the difference. Turning down the thermostat by 10 degrees can save you 10% on your bill over a year.

3. Upgrade to Efficient Equipment With a Rebate

Layering your clothes is the original way to save money on your winter electric bill and lower your thermostat a few degrees. If your clothes budget is already stretched, websites like ThredUp or heading over to your local Goodwill are excellent ways to get gently used but extremely warm clothing for just a few bucks a piece.

4. If You Have a Smart Thermostat, Use It

Some electric companies charge higher rates during the day (aka peak hours) and lower rates in the evening (aka off-peak hours). It can help save a few bucks here and there to run larger appliances like dishwashers, clothing dryers, and washing means while you’re getting some shut-eye.

5. Take a Timeout on Energy Consumption

Many power providers offer free home energy assessments or home energy optimization kits. Xcel Energy, which serves much of the northern midwest and mountain regions of the U.S., provides a free virtual visit with a Home Energy Squad member, followed by a free kit to optimize your residential electrical usage.

A toddler watches his sibling play out in the snow from the window.
Getty Images

6. Let Mother Nature Do the Work

Then, begin to see where you can limit the amount of time those home furnishings are in use. This will slowly but surely start to reduce your home electric bill.

7. Invest in One-Time Duct Cleaning

How much more? The federal government is saying we could see spikes of 54% in our heating bills compared to last year.

8. Change Your Air Filter

Any item in your house that has pipes behind it (toilets, sinks, etc.) likely is simply sitting in an open hole in the wall with no insulation. This means that in the winter warm air could be leaking out or cold air could be seeping in. Consulting with a professional to learn more about how adding insulation behind toilets and sinks can help make your home more energy efficient by eliminating these air leaks across your house.

9. Run Appliances at Night

Using the aptly named draft stopper on your doors can further prevent air leaks throughout your home. For only , you can keep prized warm air better circulating in your space without losing it to wasteful door leaks. Another painless way to save money.

10. Make the Move to LED

No, not that kind of timeout. To cheaply lower your electric bill, consider adding an outlet timer to window unit heaters. These helpful gadgets cost to and will make your home more energy efficient and limit the amount of “phantom power” (the power your devices leech from outlets even when not turned on) contributing to monthly energy bills. Or, turn down the thermostat and head to the mall or library for a few hours.

11. Replace Window Screens for Home Efficiency

Exhaust fans are those that are generally already built into your home, like the kind above a stove or shower. These fans do an exceptionally good job at circulating air and removing moisture and humidity from that air. Running these fans even when not cooking or in the shower can improve air circulation and decrease the need to crank up the heat and your power usage.

12. Insulate Hidden Areas

Speaking of fans, turn ceiling fan blades so that they rotate clockwise in the winter so that warm air is pulled upward and distributed throughout the room. If you’ve done the rotation change correctly, you should not feel any air if you stand underneath them.

13. Close the Door

While we all want a toasty home to return to after a long day, spending money heating rooms like a basement, garage, attic, or closed-in porch is a major drain on your winter electric bill. Rooms such as those tend to not be insulated with walls instead made from concrete or wood slats. With no insulation to hold in the heat, you’re essentially wasting your money trying to warm them up. Best to bundle up when in those rooms or close them off entirely during colder months.

14. Reduce Phantom Power

Air filters do just that — filter out tiny particles and debris generally undetectable to the human eye. This provides us with clean air circulating in our homes. However, these filters need to be changed about every six months in order to work properly. Clogged filters inhibit effective air flow and can lead to higher energy costs due to forcing your air systems to work harder to pump out air.

15. Add an Energy Efficient Power Strip

Some sneakier money-eaters on your electric bill are incandescent bulbs, hair dryers, and space heaters. A hair dryer consumes about 1,200 watts per hour of usage and costs 12 cents an hour to operate while a fridge generally only consumes 1,000 watts and costs 10 cents an hour to run. While you may not be using a hair dryer for an hour, you can see how daily use of such an accessory could add up.

16. Lower Hot Water Heater Temperature

For those who already have a Nest or other programmable thermostat in your home, take the time to program it. Smart thermostats offer zonal and timed heating and cooling, which on average will save most homeowners 10-12% on their heating bills and up to 15% on their cooling bills.
It’s going to cost more to heat your home this winter, thanks to global price hikes for natural gas, heating oil and other fuels.

17. Decrease Door Drafts With a Draft Stopper

If you live in a multiroom home, closing the doors to unused rooms will consolidate your heating usage to fewer rooms, and it will keep that room much warmer. Pick a room or two to hang out in for the majority of the day, and shut the doors to the others to naturally create zonal heating. A painless way to lower your electric bill.

18. Use Exhaust Fans

A major cause of ineffective or inefficient home cooling may be from clogged ductwork. Over the years, debris like dust, pet hair, and dander can accumulate in vents and make it difficult for air to flow smoothly throughout your space. Cleaner ducts = less need to turn up the heat. Fortunately, HVAC system maintenance is pretty affordable, and a one-time vent cleaning will only take 0-0 out of your home maintenance budget.
When the sun is shining, make sure that you have your blinds and curtains open to let the warmth in. Close them at night as an extra layer of insulation against the cold.

19. Go Through a Checklist

Owning or renting a home comes with all sorts of maintenance. It can be hard to keep track of what to do at what time of year in order to keep your space clean and efficient. Referring to a home checklist like this one can ensure you are ticking off the correct boxes to prepare your home for warmer months, potentially saving you some dough on electric bills throughout the winter and then next summer.

20. Rearrange Your Furniture

As we already mentioned, leveraging Mother Nature when possible to decrease your bill and your energy consumption is a great idea. In this case, replacing snared, ripped window screens with relatively inexpensive new ones can help to better insulate your windows, preventing any unwanted major cracks or gashes from emitting cold air into your home.

A woman wears multiple layers of clothes in her home.
Getty Images

21. Bundle Up

There can be many reasons as to why your electric bill is so high. One major reason could be that you leave all your appliances and furnishings plugged in all the time. This is called “phantom energy costs” or “vampire energy costs,” meaning that even when a device is not directly in use, if it is plugged in it is still using a bit of energy. There may be things that can be unplugged like computers or entertainment systems.

22. Don’t Heat Uninsulated Rooms

Incandescent bulbs release about 90% of their energy as heat. Couple that with the fact that they generally are not energy efficient and it’s enough to make the case to switch to LED bulbs. LED bulbs can save consumers as much as per month and they give off little-to-no heat.

23. Insulate Your Water Heater

We answer some of the most asked questions about electric bills and what makes them so high.

24. Use Your Kitchen

But there are some ways to keep your energy bill in check this winter (and in the summer, too), and much of that has to do with maintenance.

25. Turn Down the Thermostat

Cooking and baking at home naturally warms up the kitchen and then adjacent rooms. You can save money, too, by cooking at home rather than getting take out or going out. After you’re done using the oven and it’s turned off, you can leave the door ajar just a bit to let that dwindling heat escape. Make sure to keep children out of the area if you do this and never use an operating oven as a heat source by leaving the door wide open.

Frequently Asked Questions (FAQs) About Electric Bills

Go through the house and check to make sure that you don’t have beds, dressers, bookcases or other furniture blocking heating vents. If the vents are blocked and heat isn’t evenly distributed, this may cause you to turn up the thermostat.

How Do I Reduce My Electric Bill?

The most costly items on an electric bill are the culprits you probably already guessed: air conditioning, heating, and large home appliances come in at the top of the list. This is why it makes it all the more important that your home is energy efficient with updated models of each home appliance.
Source: thepennyhoarder.com
Although upgrading heating systems and thermostats can be pricey, many electrical companies offer rebate programs. ConEd, which serves New York City, offers rebates on smart thermostats. So does California. Check with your energy provider to see if rebates are offered in your area. This could mean more than 0 back in your pocket

Why Is My Electric Bill So High?

Another reason could be that your home is not energy efficient. If appliances such as dishwashers are decades old, it’s likely that those models are no longer the most energy or water-efficient on the market. Although no one wants to purchase a brand-new major appliance, this can save you money in the long run.
This is where a free home inspection by your local utility company may come in handy, if such a service is offered. Energy experts can let you know if your appliances are up-to-date from an energy standpoint as well as what other surprising items in your home may be contributing to an overly high electric bill.
The default temperature for water heaters is 140 degrees, which wastes between and a year, according to the Department of Energy.

What Costs the Most on My Electric Bill?

Even if something like a lamp or TV are not turned on, the fact that they remain plugged in means those items could be leeching “phantom power” from your home, and jacking up your electric bill. Phantom power refers to the electricity consumed by objects when they are off or in standby mode. This allows them to quickly turn on, but means your electric bill pays the price. Consider unplugging lamps, appliances, and more when not in use to save on your next energy payment.
Insulating your water heater can save you about 7-16% in water heating costs and eliminate standby heat losses by 25-45%. It’s pretty easy to DIY — order a water heater jacket like this one for from Amazon, or check with your local utility company to see if they offer jackets for free or with a rebate.
That’s a big jump and something that many of us will struggle to afford. For people lucky enough to use electricity for their heating systems, it’s predicted that their bills will only go up about 6%. Still, that’s money that you could use elsewhere.
While you’re unplugging unused objects, think about adding in an energy efficient power strip to cut down on your bill. Some estimate that installing energy efficient power strips (which are only to each) can decrease home power use from 20 to 48%, which translates to more than just a few dollars back in your pocket.
From bundling up to not heating uninsulated rooms to simple maintenance checks and fixes, these two dozen plus one ways to avoid sticker shock from your electric bill are worth your efforts.

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Flipping a House? How to Flip a House the Right Way

Wondering how to flip a house? In real estate, flipping houses has become all the more popular thanks to TV shows such as HGTV’s “Flip or Flop” and “Masters of Flip.” The goal is to buy a run-down home, put money into renovations, list it on the real estate market—and profit, big-time! For real estate investors, flipping houses may have hit its peak in the bubble years leading up to the 2007 housing market crash, but this is one dream that definitely hasn’t died. Many investors are still making money. However, just because you’ve watched a lot of HGTV shows doesn’t mean that you know how to flip a house for a profit.

Earlier this year, RealtyTrac reported that investors who had flipped a property in the first quarter of 2016 had yielded the highest average gross flipping profit—the difference between the property purchase price and the flip price, not counting the cost of renovations—in 10 years. The magic number: $58,250.

But just how much money you make will hinge on taking the right approach—so be sure to check out these pointers on flipping houses. For real.

How to flip a house in real estate to make money

“Stick with the age-old adage of buying the cheapest property in the nicest neighborhood,” says Eric Workman, senior vice president of marketing at Chicago-based Renovo Financial, a private lender specializing in the real estate house-flipping space. But don’t pick just any old shack—look for a home with  “good bones,” Workman says.

Translation: Look for a property that’s structurally sound and has a decent roof, newer windows, and an HVAC system that’s less than 10 years old, as well as modern electrical and plumbing.

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Watch: 3 Signs of a Fantastic Flip

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Next, an ideal flip should need only cosmetic changes such as new cabinets, countertops, flooring, and paint. Any other renovations will be more costly and cut into your profit on the property.

“These renovations can usually be done without the delays of permits, plus the upgrade costs will be relatively fixed, helping to eliminate unforeseen expenses,” says Workman.

And always look for a house in a neighborhood close to public transportation or in a good school district as these properties tend to sell quickly.

How much should you pay for a house you’ll flip?

Investors should set a goal of making a 10% to 20% return on their investment. So how do you crunch the numbers? For starters, find out what your fixer-upper will sell for once you’re done with it by looking at the sales price for similarly sized real estate in the same neighborhood that are move-in ready, says broker Bobby Curtis at Living Room Realty in Portland, OR.

Let’s say, for instance, that homes in tiptop shape in the area sell for $300,000. To get a ballpark figure for a run-down property, cut that price by three-quarters (75% of $300,000 = $225,000). Then subtract the cost of repairs (if repairs cost $30,000, that would be $225,000 – $30,000 = $195,000). That’s about the most you should pay for your flip without cutting too much into the money you’ll walk away with.

As for financing a flip, it isn’t that different from buying a regular home. You’ll either pay cash or take out a mortgage—just consider going for a 10- or 15-year mortgage, which will offer a lower rate. If you’re right on the money, odds are you won’t own this house for long anyway.

Hard money loan

You can also acquire a hard money loan, which is simply a short-term loan secured by real estate.

“It’s synonymous with a private investor,” says Don Hensel, president of North Coast Financial, which specializes in hard money loans. “A lender could be an individual, a group of investors, or a licensed mortgage broker who uses his own funds. This differs from a bank that uses money from its depositors.”

Getting a hard money loan is generally less of a hassle than a standard mortgage, and they’re especially popular with people flipping houses who prefer not to go through the hassle of taking out a 15- or 30-year mortgage on the property.

How fast should you flip a house?

Don’t kill yourself (or more accurately, flip yourself into an early grave) to rush your real estate flip. But also note, you don’t want this house sitting around for long.

Curtis recommends looking for a property that will take four to six weeks to renovate. A short deadline ensures you’ll buy and sell the house in that same housing market. Plus, owning a house for less than two months keeps costs like interest and taxes at a minimum.

This means that finding contractors who do quality work quickly is key to your success. For that reason, it’s crucial that you do your due diligence before you hire one: Make sure to meet with at least a few contractors, and get their license number, references, and real estimates of what they think renovations on the property will cost.

Keep an eye out for red flags—e.g., contractors who ask for money upfront or in cash aren’t playing by the usual rules, and might be trying to take your money and run.

That said, you should accept the fact that the cost of repairs will almost always run over. As such, “you absolutely, positively must overbudget” so you have a financial cushion for those inevitable overruns, says Joseph Chiera of The Realty Cousins of Poughkeepsie, NY. Design backups will also help you solve your money problems.

“If you’re planning to use high-end hardwood flooring priced at $5 per square foot, have a nice backup at $2 per square foot,” he adds.

Here’s a list of renovations and how much they pay off at resale.

Source: realtor.com

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6 Ways for Parents to Save on Child Care

One potential way to avoid debt is by creating a sinking fund, which is a relatively easy way to pay for a large expense over time. For example, you know your HVAC unit has a few years left on it. So you put aside 0 per month in savings to pay for it.
Ready to stop worrying about money?
If this is your first child, you might be unaware of the benefits your employer offers related to child care.
After looking at that list as a whole, determine what isn’t as much of a priority as child care and how much of that spending you can put toward child care expenses.
Even if it’s not the full monthly amount, you’ll reduce your financial burden (and related stress) with that monetary boost when the time comes. The key is planning ahead and, to the best of your ability, know what to expect when it comes to your eventual child care costs.

6 Tips for Managing Child Care Costs

1. Start Your Research Now

In a recent survey by The Penny Hoarder of 2,000 parents nationwide, nearly 55% said child care was more expensive than they expected. And 63% said the cost of child care factored into their decision whether to have more than one child.
If you have a young one on the way, or are planning to soon, here are some ways to save money on child care.
For 2021, the amount of qualifying expenses for this credit increases to ,000 for one child/dependent and ,000 for two children/dependents. The percentage of expenses that qualify for the credit also increased from 35% to 50%. To see if you qualify for the child and dependent care credit, visit the IRS website.
As a new or soon-to-be parent, you might get stressed and panic over what to do with your little one when the time comes for child care. That’s understandable. And almost every parent has been there.
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With opportunity cost, you’re basically asking yourself, “What else could I be doing with this money?”

2. Check with Your HR Department

While stipends and on-site child care are growing as benefits, a flexible spending account (FSA) is still a more common option.
Obviously, your working schedule as parents will factor heavily into your child care costs. Stay-at-home parents will spend significantly less.
If you’ve never had kids, or if you have your first little one on the way, you might not be thinking much about those expenses yet. But many parents will tell you they wish they had started preparing for child care costs much earlier.
Once you get in, be ready for the sticker shock. Almost 44% of respondents in our survey spent at least ,000 per month on child care, with only 17% spending under 0 per month.

3. Look into FSAs

With more and more companies going remote during 2020, the next new benefit to dangle in front of potential employees may very well be child care.
Take a look at your expenses, list out what’s most important – obviously starting with bills like shelter and food, then moving on to transportation, child care, and so on.
Single filers and couples filing jointly can currently contribute up to ,500 per year to a dependent care FSA, while married couples filing separately can contribute up to ,250.
So whether you’re looking at a daycare facility or a nanny, now is the time to start researching your options. So, for child care, let’s say you expect to pay 0 per month in expenses. That comes to ,400 over the course of a year. How much can you set aside now, before your little one arrives and/or it’s time to enroll, to ease those expenses later?
The downside to FSAs is, usually, they are “use it or lose it.” If you haven’t used all of the money in your account by the end of the year, you’ll forfeit it. However, because of the pandemic and resulting unused FSA money, the IRS relaxed its restrictions and allowed rollovers for 2020-2021 and 2021-2022.
Forty percent of our survey respondents said they have gone into debt because of the cost of child care. That’s a tough situation to be in.

4. Start a Sinking Fund

Source: thepennyhoarder.com
According to our survey, 66% of parents would consider switching jobs to a company that offered child care-related assistance. With 70% saying they “feel stressed” over what child care will look like in 2022, it’s easy to understand why a workplace benefit would help ease their mind.
Many workplaces now offer both a healthcare and dependent care flexible spending account. With dependent care FSAs, you withhold a certain amount from your paycheck while also paying out of pocket. After you’ve paid for child care, you file a claim, with receipts, and you’re reimbursed later.
So what do you do? Where do you start? Is it even possible to find affordable child care?
If you’re a new or soon-to-be parent, make sure you stay in tune with the available tax credits.

5. Consider the Opportunity Cost — and Adjust Accordingly

These might be temporary sacrifices until you get other permanent options in place, like an FSA. The idea is, though, to prioritize spending in your life (a budget will help with that, too).

  • 26% said they’ve had to move homes.
  • 25% reported they’ve had to find a new home for their pet.
  • 38% had taken a side hustle.
  • 29% had cut back hours at work.
  • 15% had taken on a second mortgage.
  • 28% had borrowed money from a friend or family member.

Tax laws may change from year to year, so make sure you are up to speed on any benefits that might help you make childcare more affordable.
Note that educational costs like school tuition and tutoring are not eligible. Overnight camps and extracurricular activities like sports or music lessons are also not covered expenses in a dependent care FSA.
Another lesser-known but still useful tax option is the child and dependent care tax credit. If you’re paying someone to take care of your kids while you work, you might be eligible, depending on factors like the age of your children and your income.

  • Could you drop the gym membership and start working out from home?
  • What other monthly memberships (e.g. streaming services, box subscriptions) could you give up?
  • Could you cut back on eating out from four times a month to two?
  • What other extracurriculars, like golf, spa visits, or shopping trips can you reduce or eliminate?
  • Is it time for a trade-in to possibly “downsize” a car payment?

However, for single parents working full-time and in two-parent homes where both work, you’ll need to begin researching costs as soon as possible. And be aware of waiting lists. It’s not uncommon for popular daycare providers in urban areas to have waitlists of anywhere from 12 to 24 months. Most places have fewer spots available for infants, so those waits can be even longer.
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Some companies are ahead of the game. Bright Horizons Family Solutions manages employer-based child care services and benefits, with clients that include Amazon, Apple, Facebook and General Motors. More than 100 of their clients chose a backup care option last year, a service that allows someone to bring their child to Bright Horizons when they’re in a last-minute bind.

6. Look for Tax Credits

After two years – 24 months worth of saving 0 – you’ll have more than ,000 to put toward a nice new HVAC. If you want to reduce the amount you put in the fund per month, plan further ahead and start saving sooner.
Take the time to research your options, talk to your employer about benefits such as stipends and FSAs, and get creative with sinking funds and other sacrifices in your budget. You want to do what’s best for your kid, and you will. In case you didn’t know, child care isn’t cheap.
Robert Bruce is a senior writer for The Penny Hoarder.
If child care is about to be a huge priority in your life, it might be time to look around and determine if you’re spending your money in areas that aren’t as important. For example:

Next Steps Forward

In 2021, many parents saw a nice bump in income from the expanded child tax credit, which provided a total credit of ,600  to parents with children younger than 6 and ,000 to parents of children ages 6-17. Half of those payments are being made in monthly installments from July to December of 2021, while the remaining half will be paid as a credit on tax returns in 2022.
Remember, your FSA contributions will need to appear on your federal tax return, and you’ll need to re-enroll each year.
Traditionally, a daycare provider is less expensive than a nanny. But that gap is closing, according to a 2021 survey by Care.com. There’s now only a a week difference between the cost of having two kids in daycare versus hiring a nanny, that survey found.
Methodology: The Penny Hoarder used Pollfish to conduct a national survey about the cost of child care with 2,000 people completing the survey Sept. 8-10, 2021. Survey responses are weighted so that each response is representative of the U.S. population.
Some of those are extreme measures. Hopefully, your choices are a little less difficult. That’s where your “opportunity cost” comes into play. <!–

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What makes this type of FSA so attractive is that it’s funded with pre-tax dollars, which reduces your taxable income.

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Why Are Mortgages Cheaper Than Rent?

Mortgage Q&A: “Why are mortgages cheaper than rent?”

Today we’ll discuss why mortgages often appear to be less expensive than a monthly rent payment, despite allowing you to build precious home equity.

For example, you might be shopping mortgage rates and see a sample loan amount of $240,000, along with a hypothetical interest rate.

Let’s pretend that rate is 3% and the loan program is a 30-year fixed, the most popular option available.

This would result in a monthly payment of roughly $1,012. Sounds pretty darn cheap, doesn’t it? Especially with how much rents are these days. But there’s more to the story.

The Mortgage Payment Isn’t Everything, Not Even Close

Monthly Cost Homeowner Renter
Mortgage payment $1,012 $0
Rent $0 $1,843
Property taxes $312.50 $0
Homeowners insurance $125 $0
Repair/maintenance $200 $0
Utilities (water/trash/etc.) $250 $0
Total expense $1,900 $1,843

While an advertisement might highlight the monthly mortgage payment, especially when mortgage rates are low, it’s just the tip of the iceberg.

I assume a lot of folks could afford a monthly housing payment of $1,012 in most parts of the country these days.

That’s well below the U.S. Typical Monthly Rent (Zillow Observed Rent Index) of $1,843 as of July, the latest data reported.

In fact, it’s nearly half of the typical rent Zillow is reporting, which tells me a mortgage is a screaming bargain, at least on the surface.

But the $1,012 mortgage payment isn’t your all-in monthly housing expense. It’s really just a starting point.

After all, the typical U.S. home is valued around $300,000, so a $240,000 loan amount assumes a 20% down payment.

One of the biggest reasons more renters aren’t homeowners is due to a lack of down payment funds.

Many renters could probably muster a $1,012 monthly mortgage payment, but how many could come to the table with $60,000 cash?

Sure, there are low and no down payment mortgage programs out there, but even then there’s more to it.

There Are Many Other Monthly Expenses That a Homeowner Must Pay

Assuming you can qualify for a home loan after coming in with a sufficient down payment, you’ve got more expenses to worry about than a renter.

As I’ve said before, a mortgage payment is often expressed as PITI, which stands for principal, interest, taxes, and insurance.

That super low $1,012 is just the first half of the acronym, P&I. If you want an apples-to-apples comparison, be sure to include the T&I as well.

Using our same hypothetical $300,000 home purchase, we’ve got to add property taxes and homeowners insurance.

These costs are often paid out of an escrow account monthly, and thus increase your actual mortgage payment to the lender.

In California, you might pay around 1.25% in property taxes annually, or $3,750 per year. Broken down monthly, it’s about $312.50

With regard to insurance, you could pay anywhere from $1,000 to $3,500 annually, which is $50 to $300 a month in added costs.

Let’s pretend it’s $125 per month, which together with the $312.50 pushes the monthly payment up to $1,450. Still cheaper than rent!

Now Let’s Add Some Utilities and Maintenance to the Equation

Renting is pretty awesome in that you aren’t responsible for much more than your own personal belongings.

Everything inside the unit that’s bolted down is mostly the landlord’s problem, assuming it breaks.

For example, the landlord is on the hook if the fridge or washer/dryer malfunction, or if the HVAC system fails.

The renter simply calls the landlord and tells them it need to be fixed, on their dime.

If you’re the homeowner, these problems become yours, and you better believe there will be something, each and every year.

As such, you should generally earmark a couple hundred bucks a month for potential repairs and maintenance. It could in fact be a lot more than that, but at least start there.

Then there are the monthly utilities, which may have been paid by your landlord, or perhaps baked into the rent.

As a homeowner, you’re now paying for trash, water, sewer, etc. out of your own pocket each month.

Let’s add another $250 a month in utilities to the mix, along with the $200 in repair/maintenance.

We’re now up to $1,900 a month all in for your house, a far cry from the $1,012 you may have seen advertised.

It’s nearly double the original “estimated payment” you saw, which made homeownership look so enticing.

And remember, that monthly payment requires a hefty $60,000 down payment. If you don’t have that, expect an even higher monthly outlay, and possibly mortgage insurance as well.

Be sure that your rent vs. buy calculator factors in all those costs and doesn’t minimize or ignore them.

Homeowners Get Money Back Each Month They Own

Now the good news. Even if monthly rents and total housing payments are close to one another, you have a big advantage as a homeowner.

You essentially get “money back” each month you own your home or condo in the way of equity.

Remember the PITI acronym above – well, the first letter stands for principal and that’s money you pay to reduce the amount owed to the lender and accrue home equity.

For example, in the first year you pay about $400 per month toward principal, or $5,000 over 12 months.

That’s $5,000 in ownership, something the renter doesn’t get. Over time, you accrue more and more of this home equity until your mortgage is paid in full.

And once it is, you own your property free and clear, and only need to pay the taxes and insurance, along with utilities and maintenance.

At that point, your monthly payment could be well below what a renter pays for a comparable property.

You also wind up with a huge asset that you can sell for a lot of money one day, or pass along to a family member.

The renter just keeps paying rent and has nothing to show for it. They may also see their monthly rent increase each year during that time.

Meanwhile, the homeowner with a 30-year fixed could enjoy relatively stable payments for decades, less any minor adjustments in taxes and insurance, even as the value of the dollar erodes.

Source: thetruthaboutmortgage.com

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Are You a Good Tenant? 6 Qualities Your Landlord Will Appreciate

You may think you’re the bee’s knees as a tenant, but your landlord might not agree.

A positive landlord-tenant relationship is crucial to any rental experience. Most landlords will go to great lengths to find and keep qualified, trustworthy tenants. Those who honor lease terms, respect the property and display financial responsibility.

However, your desirability as a tenant goes beyond a good credit score and a clean background check. There are certain qualities that will make you stand out as a tenant in your landlord’s eyes and certain qualities that are immediate red flags.

Are you the type of tenant that helps landlords breathe easier or the type they warn each other about?

Rent due on the 1st.

Rent due on the 1st.

Do you pay rent on time?

Sometimes, all it takes is making one payment on time each month to stay in your landlord’s good graces.

Your monthly rent payment is likely one of your largest expenses, and it’s also probably one of your landlord’s largest sources of income. Receiving this payment even a few days late can affect a landlord’s ability to pay their mortgage or other financial obligations related to a property management business.

If you’re simply having difficulty remembering to put a check in the mail each month, talk to your landlord about online payment options. This will allow you to set up automatic payments or instant bank transfers.

If you’re dealing with financial struggles, avoid lying to your landlord or making up excuses to avoid repercussions for late payments. Be honest and direct to maintain trust — most landlords will be willing to work with you.

Guests.

Guests.

Do your guests crash for months at a time?

Most rental leases veto long-term guests without first touching base with your landlord. This is mainly because these guests go unscreened and they’re not on the lease. Unapproved subletting or long-term guests can put you at risk, as well, since your name is on the lease and you are responsible for any potential damage they may cause.

If your landlord finds out about any unapproved roommates, you risk breaking your rental agreement and forfeiting your security deposit. Of course, your rental should feel like your home and you should host visitors as you please. But go ahead and give your landlord a quick heads up for any guests that are sticking around (check your lease agreement to see if long-term guests are defined as 7, 14 or 30 days).

Woman on the phone with landlord because her sink is leaking.

Woman on the phone with landlord because her sink is leaking.

Do you report maintenance issues right away?

Regular maintenance can make or break the profitability of a rental property, so your landlord will appreciate your help in protecting their investment. Issues like water leaks, electrical complications or HVAC system failure can quickly grow into larger problems if left unaddressed. Landlords have no way to keep tabs on these items themselves.

They’re trusting you as their tenant to report maintenance issues in a timely manner, even if they might not seem like a big deal to you.

Mopping.

Mopping.

Do you keep your space generally tidy?

Some tenants are cleaner and some tenants are messier. But keeping your rental in generally good condition is crucial to preventing pests and ensuring the return of your security deposit at the end of your tenancy. The best way to ensure the longevity of a rental property is to keep it clean and well maintained, free of dirt, garbage and pests.

Carefully read through your lease agreement to understand your responsibilities as a tenant when it comes to maintaining the rental property. If your landlord conducts regular property inspections, they’re likely to take note of the cleanliness and upkeep of your rental.

Commit to a deep clean of the entire unit on at least a seasonal basis to disinfect and keep less trafficked areas free of dirt and debris.

Eviction.

Eviction.

Have you gone through an eviction?

A prior eviction is one of the biggest red flags a tenant can have in a landlord’s eyes. It means you’ve directly violated lease terms in the past with no potential to resolve the conflict. It’s important to note that tenants may also be evicted for reasons that don’t have to do with rental behavior. For example, if your landlord wants to occupy the property themselves or complete substantial renovations.

Having an eviction judgment against you can make it more difficult for you to rent in the future and can also negatively impact your credit report. If you’ve gone through an eviction, it’s time to start working on your tenant appeal. Focus on building your credit score, pay any outstanding debt involved in the eviction and try to build a roster of strong references.

Remain professional and honest about the situation and consider offering an additional deposit or first and last month’s rent to show your new landlord that you will be a stable tenant moving forward.

Are you a good communicator?

While landlords value open communication and timely responses, no one wants a tenant who is constantly complaining or asking for above and beyond attention. Bring up maintenance issues right away, be available to answer landlord inquiries as needed and contact your landlord with any other questions or concerns that may arise. Prioritize your requests and understand what classifies an emergency. In most cases, you won’t be your landlord’s only tenant or only priority. Unless it’s a true emergency (fire, burst pipe, etc.), try to resolve the issue on your own before bringing in your landlord.

Keep up with being a good tenant

It’s never too late to start being a great tenant. If you’re struggling with your landlord-tenant relationship, check in with your landlord to see where you can improve as a renter to try and salvage the relationship.

Pay your rent on time and treat the property as if it was your own and you’ll be well on your way to a better relationship, plus a higher probability of having your security deposit returned and an overall great rental reference in the future.

Source: rent.com