Looking for the best business ideas for teens? Whether you’re a teenager trying to find ways to make extra money or if you’re a parent trying to help your child start a business to learn about money, there are many positives of starting your own business young. Whether it’s in the summer, after school, or…
Looking for the best business ideas for teens?
Whether you’re a teenager trying to find ways to make extra money or if you’re a parent trying to help your child start a business to learn about money, there are many positives of starting your own business young.
Whether it’s in the summer, after school, or on weekends, having a small business can be a fun and educational thing to start.
I did many different things as a teen to make extra money, and they all taught me so much. There are many different ways for teens to make money, as you will learn below.
Best Business Ideas for Teens
There are many business ideas for teens listed below. If you want to skip the list, here are some ways for teens to make money that you may want to start learning more about first:
Below are the best small business ideas for teenagers to start.
Recommended reading:
1. Babysitting
Babysitting is an obvious job for teenagers, and it can be a great way to make money. I was a babysitter when I was a teenager and regularly earned over $1,000 a month by babysitting (mainly in the summer).
Starting a babysitting business is a smart choice for teens as it’s simple to start with very few costs. Your main investment is the time and effort you spend taking care of children.
To get started, you’ll need to let people know you’re available. Reach out to your parents’ friends, neighbors, or family members. After a while, word of mouth can help you find more jobs.
Safety is really important too, of course. So, you will most likely want to get certified in first aid or CPR. This not only makes you more trustworthy but also helps you handle emergencies.
2. Car washing services
Starting a car washing business can be a great business for a teen entrepreneur.
To start, you just need basic supplies: a bucket, a soft sponge, window cleaner, and cloths for drying and polishing.
With a straightforward service like car washing, you can operate right in your driveway or travel to clients’ homes for convenience.
3. Start a blog
Starting a blog is a great way for you to share your thoughts and ideas while potentially earning money. Your blog can cover any topic you’re passionate about, whether it’s fashion, sports, technology, or your daily experiences.
While I was around 21 years old when I started my blog, I know a few people who started theirs as teenagers.
A blog can be a great business idea to start when you’re young, as you can decide how to build your blog, how you earn an income, and the schedule you put toward it.
You can easily learn how to start a blog with my free How To Create a Blog Course.
Here’s a quick outline of what you will learn:
Day 1: Why you should start a blog today
Day 2: What topic to blog about
Day 3: Tutorial on how to start a blog on WordPress
Day 4: How to make money with your blog
Day 5: How to make passive income on your blog
Day 6: How to get pageviews to your blog
Day 7: Tips to see success with your blog
Out of all of these business ideas for teens, blogging is by far my favorite. It does take more time to start making money, but it’s very flexible and fits with any kind of schedule.
4. Tutoring and teaching
If you’re a teen who’s really good at a certain subject, tutoring could be a great way to start a rewarding business. You can use your knowledge to help others do well in areas you’re good at.
Your friends or younger students might find it helpful to have one-on-one sessions where you explain difficult topics in simple ways.
Subjects you may be able to tutor in include:
Math
Science
Foreign languages
English
Many tutors are teenagers, so this may be a great fit for you!
5. Photography
If you love capturing moments through a lens, starting a photography business could be a perfect fit for you.
Starting a business as a photographer can kick off with a relatively low investment. Initially, you might need to spend between $500 to $2,000 on equipment like a good camera, lenses, and editing software. But, if you already have a camera, then that is the bulk of the cost.
You can take pictures at events like birthdays or graduations, capture stunning portraits, or create art through landscape and wildlife photography.
6. Home care services in your neighborhood
When you start a home care services business, you’re stepping into a role that helps busy homeowners manage their households.
This can include a range of services that assist with the upkeep of a home, such as:
Housecleaning – You can offer to dust, vacuum, and clean the different areas of a home. People always appreciate coming back to a sparkling clean space.
Laundry – Washing, drying, and folding clothes are tasks that many would gladly outsource to you. Organizing wardrobes or ironing clothes can be added services.
Plant care – Have a green thumb? Offer to water plants, prune leaves, and take care of any garden needs.
Raking leaves – Raking leaves is a good business idea for teens, especially during the fall. Trees drop their leaves and many homeowners need help gathering and disposing of them.
Errand runner – As an errand runner, you’ll help people in your community with tasks they might not have time for, like grocery shopping, picking up prescriptions, or mailing packages.
When I was a teen, I had a friend who was a personal assistant for someone in her neighborhood. She would pick up their dry cleaning, take care of their plants, walk their dogs, and more.
7. Pet care (pet sitting and dog walking)
If you’re a teen who loves animals, starting a pet care business can be a great way to earn some extra cash. Pet sitting and dog walking services are in high demand and can be both fun and rewarding.
To start, you can join a dog walking app-based service. Rover is a user-friendly option that connects you with pet owners. You can create a profile, set your own prices, and specify the types of services you feel comfortable providing, such as dog walking or pet sitting.
You can typically earn between $15 and $30 for each hour spent with a pet, considering you might need to commute to the pet’s location.
8. Graphic design
If you’re interested in art and technology, you can start a graphic design business.
Graphic design is about creating visual content for companies and individuals. You’ll use software to make logos, social media graphics, posters, and much more.
As a teen graphic designer, your income will vary. Typically, you can make anywhere from $5 to $100 per project when starting. As your skills grow, so can your rates. The market for design work is expanding, making room for you to succeed.
9. Music and art lessons
Can you play piano, guitar, or violin? Or maybe you’re skilled in drawing or painting?
If you’re a teen with a talent for music or art, teaching art or music lessons can be a great business idea. Whether you play an instrument or paint like a pro, other kids and parents might pay for your expertise.
10. Sell handmade goods and crafts
If you like being creative and making things with your hands, selling arts and crafts can be a great business idea for teens.
Here are some crafts that teens can create and sell for extra money:
Jewelry – You can make necklaces and bracelets.
Homemade candles – Candles are simple to make and can be sold to people who like to add a cozy feel to their homes.
Paintings – If you like to paint or draw, you can create artwork to sell.
Slime – Slime is really popular and fun to play with. Teens can make and sell their own slime in different colors and maybe even add things like glitter to make it unique.
Soap – Homemade soap is always nice to have, and people love to buy it.
Stickers – Everyone loves stickers and this can be a fun way to make extra money on Etsy or in person.
You may be able to sell your homemade items at local craft fairs or online on Etsy.
Recommended reading: 16 Best Things To Sell On Etsy To Make Money
11. Providing technical support
If you’re good with technology, starting a technical support service can be a choice to look into. Lots of people have trouble with technology and need help. As a teen, you can meet this demand by selling your tech-savvy skills and knowledge.
Services you can sell include:
Software installation and updates
Virus and malware removal
Hardware troubleshooting
Help with using different programs and apps
You can market your business by telling your friends, family, and neighbors about your services, and even by creating flyers to distribute and post on local community boards and at local businesses.
12. Start a YouTube channel
Making a YouTube channel is a way for you to share what you love, your talents, and your ideas with the world. It can also become a fun way to earn some money.
Most people know about YouTube, and almost everyone has seen at least one video on the platform. According to YouTube, there are over 2 billion people who watch at least one video on YouTube every month.
Many people have goals of starting a YouTube channel and making money, but not many people ever actually start.
You can learn more at How I Grew From 0 Subscribers To Over $100,000 On YouTube In Less Than One Year.
13. Design and sell print-on-demand products
Starting a print-on-demand business lets you be creative and make money. You can make products that are inexpensive to create, such as posters or custom-designed mugs.
To begin, design things that show your interests or what customers like. After that, use a service like Printful to put these designs on different products. The company takes care of everything else, from printing to shipping.
14. Lawn care business
Starting a lawn mowing business is a great way for teens to make money and is one of the popular small business ideas for teens. It’s easy to get started, and you can make cash during spring and summer (or even year-round depending on where you live, like Florida, Texas, Arizona, and California).
All you need is a lawn mower, some fuel, and basic gardening tools.
You can talk to neighbors, family, and friends to find new lawn mowing jobs.
I know many families with teenagers who mow lawns to make money. Some even turn it into a full-time business as they grow up.
15. House sitting
For teenagers, starting a house sitting business is a smart way to make money. You’re responsible for looking after someone’s home while they’re away, which is a big job.
Trust is important due to this, and homeowners must feel sure that their property and pets are safe in your care.
When I was a teen, I had a friend who was a regular house sitter for several people. She would water their plants, walk their dogs, and stay overnight in their homes to make sure everything was fine with the house.
16. Sell printables on Etsy
If you want to earn money from home and be your own boss with low startup costs, creating printables could be a great option for you.
A printable is a digital product that can be downloaded and printed at home. You create them once and then sell them on a platform like Etsy for people to purchase. You don’t have to physically print anything; you’re just selling the digital download.
Printables include things like grocery shopping checklists, weekly meal plans that people can put on their fridges, gift tags, and quotes to be framed. These are digital products that users can download and print for their use.
Making money at home as a teenager through creating printables is great because you create one digital file download for each product, and then you can sell them an unlimited number of times.
I recommend reading about this further at How I Make Money Selling Printables On Etsy.
Important note: To sell on Etsy, you need to be at least 18 years old. If you’re between 13 and 17, you can still sell on Etsy with the proper permission and under the direct supervision of your parent or legal guardian. The Etsy account should be registered using the parent or legal guardian’s information.
17. Social media influencer
If you enjoy being in front of the camera and are good at connecting with people, you could possibly make money as a social media influencer.
This can include platforms such as TikTok, Instagram, and more.
Now, this is not a guaranteed way to make extra money as a teen, as not everyone makes it. But, you won’t know unless you give it a try.
It’s all about your image and your message (and some luck too, of course). Ask yourself, what are you passionate about? Fashion? Gaming? Fitness?
You’ll want to keep your posts consistent (for many platforms, this will include posting at least once a day) and your voice authentic. This is how you’ll attract followers who can’t wait to see what you post next.
You’ll also want to interact with your audience. Reply to comments, ask questions, and listen to what they want. An engaged audience is a loyal one, and brands notice this. The more you connect, the more your followers trust you.
As your following grows, companies might pay you to talk about their products. That’s because they see value in your ability to reach and engage with a dedicated audience.
You can learn more at How I Make Money On TikTok – How I Grew To 350,000 Followers and Made $60,000 In 6 Weeks.
18. Videography
If you love making videos, starting a videography business could be a perfect idea for you. As a young entrepreneur, you can begin this business idea with just a smartphone or a basic camera.
You can start this small business idea by practicing filming different events like school activities or community gatherings. This will help you to create a portfolio that highlights your unique style and skills.
19. Streaming
If you like playing video games and have a fun personality, you may be able to make money streaming. With platforms like Twitch, you can create a channel where you showcase your gaming skills or entertain an audience with your commentary.
Once you gather a following, you can monetize your channel through subscriptions, ads, sponsorships, and donations. Selling branded merchandise is another way to earn money.
Recommended reading: How Much Do Twitch Streamers Make?
20. Baking
If you love making treats that leave your friends and family asking for more, starting a baking business could be your path to success.
You could bake things like cookies, cakes, bread, and more.
Before selling, make sure you understand the legal requirements, such as if you need a permit or license.
21. Proofreader
A proofreader is someone who reads through written stuff like articles, books, or ads to find and fix any mistakes. Your job is to make sure everything’s correct before people see it.
If you love reading and often spot mistakes in written content, you might want to explore becoming a proofreader.
Freelance proofreading is a flexible and detail-oriented job that only requires a laptop or tablet, an internet connection, grammar skills, and a good eye for finding mistakes.
If you want to find online proofreading jobs, I recommend watching this free 76-minute workshop all about how to get started proofreading.
Recommended reading: 20 Best Online Proofreading Jobs For Beginners (Earn $40,000+ A Year).
22. Buy and sell flipper
Reselling items online on platforms like Craigslist, eBay, or Facebook Marketplace can be a great way to run your own business and make extra money.
Plus, it’s something that anyone can start because many of us own things that we could probably sell.
And, there are always things you can buy for a low price and potentially resell for a profit. You might even find free items that people are throwing away and sell those too.
There is a helpful free webinar that I recommend – Turn Your Passion For Visiting Thrift Stores, Yard Sales & Flea Markets Into A Profitable Reselling Business In As Little As 14 Days.
23. Answer online surveys
Okay, so this isn’t a business, but it is a way to make money online.
Taking surveys won’t make you rich, but it can help you earn a bit of extra money during your spare minutes throughout the day.
Companies pay you to take surveys because they want to know what people think about their product and their company. They want real opinions from real people.
Here are some of the survey companies that are open to teenagers (along with their minimum age requirements):
American Consumer Opinion – Age minimum – 14 years old
Survey Junkie – Age minimum – 12 years old
Branded Surveys – Age minimum – 16 years old
Swagbucks – Age minimum – 13 years old
InboxDollars – Age minimum – 12 years old
User Interviews – Age minimum – 16 years old
Things To Think About as a Teen Entrepreneur
As a teen wanting to start a business, it’s important to think about things like balancing schoolwork, managing finances, and making sure that you are staying safe.
Balancing school and business
Your school schedule is a priority, and finding a balance between it and your new business venture is important, so it’s important to plan out your week.
I recommend creating a visual where you can see your school time, study hours, and time for your business.
Example of a weekly schedule:
Day
School Hours
Study Time
Business Hours
Free Time
Monday
8 a.m. – 3 p.m.
4 – 6 p.m.
7 – 9 p.m.
Remaining
Tuesday
8 a.m. – 3 p.m.
4 – 6 p.m.
7 – 9 p.m.
Remaining
…
…
…
…
…
Sunday
None
Optional
Flexible
Flexible
Financial planning
It’s important to understand the basics of financial planning when it comes to your business so that you can make sure you are making money and not wasting money.
So, I recommend listing the resources and materials you’ll need along with their costs. This also includes keeping track of all your expenses and income using a spreadsheet or even just writing your expenses down.
Working safely
You should always be safe, and make sure not to fall for any scams or fall into business with someone that you do not want to. Keep parents up-to-date on what is going on in your business and make sure to meet strangers in public/safe places.
Frequently Asked Questions
Below are answers to common questions about starting a business as a teen.
What are some easy-to-start business ideas for high school students?
If you’re in high school and want to start a business, you can sell services like lawn care, dog walking, or car washing. These types of businesses require minimal money from you to get started and can be managed around your school schedule.
What are the business ideas for teens online?
For online business ideas for teens, there are many things you could do such as selling printables, starting a blog, online tutoring, selling handmade crafts on Etsy, and more.
What are the top business ideas for young adults?
The top business ideas for young adults include babysitting, car washing, lawn mowing, online tutoring, and starting a YouTube channel.
What types of businesses are suitable for 13 to 17-year-olds?
Teens between 13 and 17 can look into babysitting, pet sitting, tutoring, or crafting and selling homemade goods.
Business Ideas for Teens – Summary
I hope you enjoyed this article on the best business ideas for teens.
Starting a business when you’re a teenager can be fun and help you make some extra money. This can help you to save money for college, buy things that you want, hang out with your friends, buy clothing, and more.
Plus, it’s a chance to learn important skills and a good work ethic.
You can do different things to earn cash, like doing chores at home or trying out creative online projects. If you enjoy outdoor work, you can wash cars or take care of lawns. If you’re into technology, you might want to start a blog or a YouTube channel.
There are lots of options depending on what you like and what you’re good at!
What other business ideas for teens would you add to this list?
I might get a little sentimental today. This is the 20th anniversary of my — well, really our — weekly column. In addition to feeling old, I also feel grateful.
It was actually slightly more than 20 years ago that I was living in Southern California, working as a freelance writer, when an editor from the Orange County Register called. The paper was launching a monthly regional magazine targeting owners of luxury homes — think Laguna and Newport Beach — and he wanted a column that would be the antidote to potentially pretentious content.
“So,” I said, “you want a column that is not about rich homeowners and their chichi architects and their museum-quality art collections and the exquisite homes they build on the bluffs overlooking the Pacific and how the whole experience was one giant lovefest, and they had money left over?”
“Right,” he confirmed, “a reality column.”
He’d found the right writer. At that point, I had built two homes from the ground up, had the debt and cortisol levels to prove it, and had an arsenal of frustrations.
Still disbelieving, I added, “You want me to write about the tile mason with the drinking problem, the neighbors who won’t speak to you because you’ve had an outhouse and a Dumpster parked in your front yard for three months, the dogs who got so fed up with the construction they ran away in search of a rescue, and about how the remodel took three times as long, cost three times as much, and you weren’t speaking to your spouse at the end?”
“Exactly,” he said. “Sprinkle in some advice. Be the girl next door who has the same problems as everyone else but is two steps ahead, because you’ve made the mistakes and know who to call.”
Eighteen months later, my then-husband and I moved from Southern California to Colorado — just one of my many moves. And soon, I had a syndicated column. That former editor congratulated me, then ominously added: “It’s great to have a weekly column, but one day, you are going to run out of ideas.”
Until then, a dry well hadn’t been on my worry list. I flashed back to when I was in kindergarten and got in trouble for talking too much in class. I wound up in the principal’s office with my mother to discuss “the problem.” When the principal asked why I talked so much, the answer was easy. “I just have so many important things to say,” I said, which was unintentionally hilarious.
So here we are 20 years and 1,040 columns later, and I still have things to say and no shortage of topics. Because I have never been able to see where home design stops and home life begins, my columns are about both. Here’s a brief look back at some of the moments we’ve been through together:
The calamities: You were there when my two custom seven-foot sofas arrived with the upholstery fabric inside out, when the back patio in our new Colorado home fell three feet into a sink hole, and when our rescue dog on his first night with us tested our commitment on the one-day-old living room carpet. (Who gets a new dog and new carpet on the same day?)
The many moves: You were there through 10 houses and nine moves, including the move to Florida, where I had a stint as a live-in home stager and moved six times in four years.
The life changes: You were there when I sent each of my children off to college, entering some sort of self-imposed dorm-decorating contest in which I was the sole contestant. You were there through my divorce and remarriage, the loss of two parents and the gain of three grown stepchildren.
The micro and macro: Together, we’ve covered the minor (how to choose drawer knobs and tea towels) and the major (the meaning of home and belonging and how to leave a meaningful legacy.
Tom Brady, the NFL legend known for his incredible career and for leading his teams to a record seven Super Bowl wins, is making waves off the field in Miami’s real estate scene.
His latest venture? A jaw-dropping waterfront mansion in the ultra-exclusive Indian Creek Island, affectionately dubbed “Billionaire Bunker.”
Yes, you heard that right – Brady is setting up his new bachelor pad in one of the most coveted slices of paradise in Miami, and let me tell you, it’s nothing short of spectacular.
For those keeping score at home, Indian Creek Island isn’t just any neighborhood. It’s a veritable who’s who of billionaires and A-listers, with names like Jeff Bezos and Ivanka Trump calling it home.
And now, Brady, fresh off his retirement and stepping into his new life chapter, is about to join this elite roster.
Tom Brady’s megamansion in Miami’s ultra-exclusive Indian Creek Island
Brady’s future digs, a sprawling estate that’s been the talk of the town, sits cozily across the waterway from the abode of his ex-wife, Gisele Bündchen.
The supermodel paid $11.5 million for her new spread at 1400 Biscaya Drive in Surfside right after their split and is currently revamping the waterfront home too.
See also: Tour Tom and Giselle’s former marital home in Brookline, Massachusetts
So while the former A-list couple is keeping local construction crews busy, let’s take a closer look at the former New England Patriots quarterback’s sprawling Florida abode — and pin down what makes his newly built mansion a touchdown in luxury living.
Set at 26 Indian Creek Island Road, Tom Brady’s house in Miami has all the hallmarks of a celebrity megamansion to rival those of its deep-pocketed neighbors (Amazon boss Jeff Bezos paid $68 million for a teardown on the island).
We’re talking about a state-of-the-art gym (because, of course), a sleek study, and a waterfront pool and spa that screams relaxation with every ripple.
And for those balmy Florida nights? An outdoor kitchen, lush gardens, and a tree-lined driveway that leads to a motor court, ready to house Brady’s collection of high-end rides.
The property also boasts a plush pool cabana adjacent to an infinity pool lined with palm trees, creating a backyard oasis that’s second to none.
And for that extra touch of privacy and security? A large security house stands guard at the entrance.
Renderings of the mega-mansion have leaked, showing off the primary and guest suites, each with their own terraces.
You can take a peek inside thanks to these indoor renderings obtained by The Real Deal (swipe to see inside Tom Brady’s new house in Florida):
The interiors bear the signature of lauded designer Scott Mitchell of Scott Mitchell Studio, known for his standout designs, combining contemporary architecture with geometrical elements and juxtaposing soft, tactile textures against concrete and other natural materials.
Mitchell’s design style, which creates a sense of understated comfort, has drawn in some of the richest people in the US.
Beyond his long-standing collaboration with Tom Brady and Gisele Bündchen, he also counted billionaires Larry Ellison and David Geffen as clients, as well as former Walt Disney Studios boss Jeffrey Katzenberg.
It’s clear no expense has been spared in creating this slice of heaven. With construction in the final stages, sources hint that Brady is expected to move in come spring.
By the numbers: How much it’ll cost him
Now, let’s talk numbers because they’re just as impressive as the property.
Brady and Bündchen snagged the 2-acre lot almost three years ago for a cool $17 million. And as hefty as that might sound, it’s worth remembering that the lot sits in one of the richest neighborhoods in the United States.
Properties here typically sell for eight-figure amounts and are rarely up for grabs.
In 2023, a waterfront mansion just down the street from Tom Brady’s house listed for a whopping $85 million. We haven’t seen any other Indian Creek houses pop up on the market since.
But the land cost isn’t reflective of the overall value of the property — which sits north of $50 million.
The construction loan Brady took out from JPMorgan Chase to build his Indian Creek Island house sits at a whopping $35 million, The Real Deal reports.
But when you’re Tom Brady, with an estimated net worth of $500 million and a $375 million deal with FOX as an NFL commentator waiting in the wings, well, let’s just say he’s playing in a league of his own.
Indian Creek Island has long been a haven for the mega-rich, but Brady’s new abode is set to raise the bar even higher. And while he’s traded the gridiron for the good life in Florida, it’s clear Brady is still in the game – the real estate game, that is.
Hunkering down in the ‘Billionaire Bunker’
Indian Creek Island — known as “Billionaire Bunker” due to the high concentration of billionaires that own property here — is a high-security paradise for the ultra-wealthy, nestled on a barrier island in Biscayne Bay, Florida.
This exclusive enclave boasts under 50 waterfront properties, each sprawling over 1.25 acres, centered around a lavish 18-hole golf course.
Homes here are no small investment, with properties here selling for well above the $20 million market, with recent standout purchases consolidating the island’s air of affluence and privacy. Just a couple of homes have traded hands on the ultra-exclusive island in recent years, one being Bezos’ $68 million purchase, and the other another $50 million home.
DJ and producer David Guetta is also looking to join this exclusive club, reportedly snapping up a $69 million newly built house on the island.
The community is so secure that it has its own 13-person private police force patrolling by land and water, ensuring that residents like Tom Brady can enjoy their sanctuary without worry.
From what we’ve seen so far, the NFL legend’s new mansion is more than just a home; it’s a sort of statement that life after football can be equally exciting for the five-time MVP.
And honestly, we can’t wait to see the final reveal. Welcome to the neighborhood, Tom!
More stories
You can buy Tom Brady’s former Florida apartment – But it won’t come cheap
Where does Leo Messi live now? The soccer star’s Miami homes
Serena Williams’ house in Florida has many unique features, but no living room
Looking for the best business ideas for kids? Finding business ideas for kids is a great way for them to learn about starting their own business, being responsible, and understanding money from a young age. They get to understand how to set goals, handle money, and feel the joy of earning their own extra income….
Looking for the best business ideas for kids?
Finding business ideas for kids is a great way for them to learn about starting their own business, being responsible, and understanding money from a young age. They get to understand how to set goals, handle money, and feel the joy of earning their own extra income.
Whether it’s in the summer, after school, or on weekends, having a small business can be a fun and educational thing to start.
I did many different things as a kid to make extra money, and they all taught me so much. There are many different ways for kids to make money, as you will learn below.
Best Small Business Ideas for Kids
Here are the best business ideas for kids to start.
1. Sell arts and crafts
If your kid enjoys being creative and making things with their hands, selling arts and crafts can be a great business idea for them. It’s not only fun but can also help them earn some money.
Here are some crafts kids can make and sell:
Bead jewelry – They can make necklaces and bracelets with colorful beads.
Homemade candles – Candles are simple to make and can be sold to people who like to add a cozy feel to their homes.
Paintings – If they like to paint or draw, they can create artwork to sell.
Slime – Slime is really popular and fun to play with. Kids can make and sell their own slime in different colors and maybe even add things like glitter to make it unique.
Pet toys – If they love animals, they could make toys for pets. Choose materials that are safe for animals and design toys that pets would enjoy.
Soap – Homemade soap is always nice to have, and people love to buy it. This can be a fun item to make on their own.
Stickers – Everyone loves stickers and this can be a fun way to make extra money on Etsy or in person.
Recommended reading: 16 Best Things To Sell On Etsy To Make Money
2. Tutoring
If your child is really good at a subject like math or science, they can start a tutoring business. They can help other kids who might find those subjects tough.
Tutoring is something they can do after school when they’re finished with their own homework. It’s a great way to use what they know to help others and even make some money.
Learn more at The Best Online Tutoring Jobs.
3. Babysitter
If your child loves being around kids, babysitting can be a great way to start their journey into the world of small businesses for kids. It’s not just about watching kids; it’s about creating a fun and safe environment while parents are away.
Your child’s reputation is important, and they can start with their neighbors or family friends who already know and trust them.
To decide what they should charge, you can look at what other babysitters charge in your area, but consider how much experience your kid has.
I recommend having your child learn about basic first aid and child care, and you can find classes through community centers or the Red Cross.
Babysitting is what I did the most of as a kid. It was my first full-time job, actually. Starting at the age of 14, I was working around 40 hours per week in the summer taking care of a baby in my neighborhood (I found the babysitting ad on a local bulletin board!). I earned $10 per hour. The mother was a nurse, so I was working about 13 hours per day for a few days each week.
4. Pet sitting and dog walking
If your kid loves animals, starting a pet care service or dog walking business could be perfect for them. It’s more than just a job; it’s a way to care for pets when their owners can’t.
In this job, you might look after pets either at your own home (called pet boarding) or take care of them at their home.
Depending on their age, your child may walk the dog for 15 to 30 minutes a day, or more.
I was recently looking at a local bulletin board, and a parent put up an ad for their 10-year-old to walk dogs. The parent would be there as well (to ensure the safety of both the child and pet, of course), but it was a small business idea that the kid wanted to start. If your child is a little older, they may be able to do this on their own as well.
5. Lemonade stand
Starting a lemonade stand is more than just a fun activity; it can be their first step for starting a business as a kid!
Your child will probably want to start with a simple recipe, as lemonade does not have to be hard. They can try different flavors, like strawberry, to make your stand unique.
They will need pitchers, cups, ice, and a table.
Work out how much each glass of lemonade costs to make, and then decide on a price that makes a little profit but is still affordable for customers.
6. Mow lawns
Mowing lawns is a great way to start a small business as a kid. It’s simple to get going, and kids can make money during spring and summer.
They’ll need a lawn mower, fuel, and basic gardening tools.
Next, it’s time to set rates. Figure out how much to charge for each yard. A good plan is to look at what others charge and then set a competitive price.
Your kid can talk to neighbors, family, and friends to find new lawn mowing jobs.
I know many, many families who have kids who mow lawns to make money. I also know several people who have older kids who have turned this into a full-time business that has grown with them as an adult.
7. Rake leaves
Raking leaves is a great business idea, especially during the fall. Trees drop their leaves and many homeowners need help gathering and disposing of them.
To get started, your kid will need to have a sturdy rake, bags for leaf collection, and a pair of gloves to keep their hands clean and protect them from blisters.
8. Shovel snow
If you live in a place where snow falls, a kid can make money by shoveling snow. This job is great if they enjoy being outdoors and don’t mind the cold. Start by asking family and neighbors if they need help clearing their driveways and walkways.
They will need a few things to start:
A shovel: This is the main tool, of course!
Warm clothes and gloves: Stay warm while they work.
Your kid can hand out flyers or tell friends to spread the word. Social media can be a big help too. A simple post can let everyone in your neighborhood know that your kid is ready to help clear the snow.
9. Birthday party assistant
If your kid likes being around kids and celebrations, becoming a birthday party assistant could be a fun way for them to earn money.
They will help set up decorations (balloons, banners, and table settings), organize games (such as being ready to lead a game of musical chairs or a treasure hunt), and make sure the party runs smoothly (they might help serve cake and snacks to the little guests.).
10. Start a YouTube channel
Starting a YouTube channel can be exciting. If your child is under 13, remember, they can’t have their own account. But with a parent’s help, they can still share videos.
Your child can pick something they love, whether it’s science experiments, video game walkthroughs, or crafting tutorials.
They will want to post videos regularly – maybe post once a week to start.
Remember, it’s all about doing something fun and sharing what they love. Starting a YouTube channel takes work, but if they stick with it, they could make something really cool.
11. Lifeguard
If your child is looking for a responsible way to earn some extra cash, becoming a lifeguard could be a way to make money.
Not only does this gig teach important life-saving skills but it also teaches them responsibility and discipline. Many local pools or community centers offer lifeguard certification courses, giving them an excellent opportunity for young entrepreneurs to get valuable training.
Running a small lifeguard business can be a win-win situation for kids and the community. They can sell their services to local events, pool parties, or even provide private swimming lessons.
Note: In most states, you need to be at least 15-years-old to become a lifeguard.
12. Start a greeting cards business
Starting a greeting card business is something your kid can have fun with and get their creative juices flowing! They can make cards for birthdays, holidays, thank you, congratulations, or just to say hello.
They will need:
Art supplies, like colored pencils and markers
Cardstock or heavy paper
A printer (if they’re printing designs)
Digital design software like Canva (this is optional)
They could start by selling to family and friends or at school events. As they grow, they could try selling them at local markets or even online.
13. Neighborhood helper
As a neighborhood helper, they can sell their services to people around your community. This is a great way to help others and earn some money.
Your child can sell services such as:
Car washing: Wash cars for people in the neighborhood for a shiny finish.
Grocery running: Offer to pick up groceries for those who can’t go themselves.
Gardening: Help maintain gardens by planting flowers or weeding.
Lawn care: Keep neighbors’ lawns neat by mowing them regularly.
Pet walking: Walk neighbors’ dogs when they’re busy or away.
To get started, your kid should make a list of what they’re good at and what they might enjoy doing. Then, let neighbors know about their services with flyers or tell them directly.
If you have many kids, they could even involve multiple family members so that each kid has their own specialty or niche as a neighborhood helper.
14. Reseller
Starting a small business as a reseller means buying products at a lower price and selling them for a profit. They don’t need to make their own things; instead, they can find good deals on items, then sell them to others for more than they paid.
They can get items from yard sales, thrift stores, or their own home.
They can sell online on places like Etsy or eBay, or at school events and local fairs.
Recommended reading: 16 Best Selling Apps For Selling Stuff Online And Locally
15. Voice artist
Becoming a voice artist can be an exciting way for kids to explore and share their talent. If they enjoy speaking and have a unique voice, this could be a fun business idea for them.
They can sell services for character voices for cartoons and animations, narration for audiobooks or educational videos, commercial voice-overs for ads and marketing materials, and more.
They will need to start with a good microphone and recording software on a computer. They can practice by reading out loud and recording their voice.
To find work, they can join online platforms like Fiverr, where people look for young voice talent.
Recommended reading: How To Become A Voice Over Actor
16. Actor
If your child is interested in acting, the first step is to take acting classes, which can help them learn the skills they need to act in plays, movies, or TV. These can be found online or at a business near you.
Once they have some skills, they can try out for local theater productions and school plays, and join their school’s drama club. Being part of a production gives them practical experience and shows them what it’s like to work with a director and other actors.
17. Sell candy
Starting a candy business can be both fun and rewarding. With a love for sweets and a little creativity, your child can turn their passion into profit.
Candy is something that I see children selling all the time, and it completely makes sense – everyone loves candy! So, it is an easy item to sell.
They can sell homemade treats like chocolate-covered pretzels or gummy bears. Or, if you prefer, you can buy popular brands in bulk and sell them individually.
Next, consider where they will sell the candy. They may be able to sell at school, neighborhood, or local community events, and you should always ask for permission when selling in public areas or on someone else’s property.
Pricing the candy is important. You’ll want to make sure your kid covers the cost of what was spent and adds a little extra for their profit. Selling candy for $2 or $3 can make it easy for customers to buy without thinking twice.
18. Start a blog
If your kid is interested in working online, then they may want to try starting a blog. It doesn’t take a lot of money to get started, and it can teach a kid a lot about how to run a website.
I have met many teens over the years who have started a blog, and I think it’s a great small business idea!
Whether they want to share their hobbies, interests, or personal experiences, a blog gives them a platform to be creative and communicate.
Other business ideas for kids related to this include starting accounts on social media platforms like Instagram and Twitter, and starting a podcast.
Recommended reading: How To Start A Blog Free Course
19. Deliver newspapers
Newspaper delivery is a classic way for children to earn some money. It’s a job that can fit well into their schedule before or after school. Plus, they can get good exercise at the same time!
It’s usually pretty simple: they take newspapers and deliver them to people’s homes.
When I was younger, I had a friend who had a delivery route. Once, I went along with her and helped her deliver some newspapers. It was hard work but she ran it smoothly!
If your kid is interested in this job, start by checking with local newspapers. Call them and ask if they’re looking for delivery helpers. Some things they might need:
A bicycle or a reliable way to get around the delivery area quickly
A bag or basket to hold the newspapers as they deliver them
An early morning start if the paper is a morning edition
To dress for the weather, since they will be outside
They will learn responsibility by making sure the newspapers are delivered on time.
Sometimes there may be age limits, so if your child is younger, they might need to get a work permit. But often, kids as young as 11 or 12 can start with a bit of paperwork.
20. Sell used toys
Recently, I was on Facebook, and a parent was helping their child host a garage sale. They were letting their child take control of most of the sale, but the parent was posting about it in the group to get more traffic to their yard sale.
They were selling the kid’s used toys to help them declutter and make some extra money. I thought this was a great idea!
Kids can learn the basics of entrepreneurship by organizing and pricing their toys for sale. This activity not only teaches them about value assessment but also introduces the concept of supply and demand as they observe which toys are more popular among buyers.
People pay good money for used toys all the time, so this can be a great side hustle to get into.
21. Face painting
Face painting can be a fun and profitable small business venture for kids who love art and painting. They can start by setting up a face painting booth at local events or birthday parties.
Running a face painting business encourages kids to develop their entrepreneurial skills, from marketing their services to managing customer interactions.
22. Recycling collector
Kids who care about the environment can turn it into a business by collecting recyclables. With a passion for keeping things green, they can offer to gather recyclables from neighbors, schools, or local businesses.
This not only helps the environment but also teaches kids about reducing waste and recycling.
23. Vending machines
I have been seeing more and more parents starting vending machine businesses for their children.
Getting kids into the entrepreneurial world by running vending machines can be an interesting and educational small business idea. Whether they decide to place machines in school common areas or local community spaces, managing a vending business can help teach children valuable lessons in supply and demand, handling inventory, and understanding customer preferences.
Running vending machines also gives kids a chance to learn about financial responsibility as they handle income, expenses, and profit calculations.
Recommended reading: How To Start A Vending Machine Business
Frequently Asked Questions
In this section, you’ll find answers to common questions about starting a business as a kid.
What is a good business to start as a kid?
Starting a business that fits into their hobbies and interests makes a good choice. For instance, if they like technology, they might try starting a blog or YouTube channel. If they love the outdoors, then a lawn mowing or gardening business might be a better fit.
How can a kid make $100 dollars fast?
A kid can make $100 fast by selling their old toys or clothing items that they already have. You, the parent, can help them organize a yard sale or gather their items to sell in a Facebook buy/sell group.
What can kids sell to make money?
Kids can sell a lot of different things to make money, such as jewelry, paintings, greeting cards, homemade cookies, lemonade, used toys, and more.
What kind of businesses can young students start at school?
They can start businesses at school like a pencil and eraser store, a book swap service, or a snack bar (if the school allows it). Just remember to check in with the school’s rules to make sure their business idea is allowed on the school campus.
What steps can a child take to start their own business?
Here are steps a child can take to start their own small business:
Identify interests and skills – This will help them find a business idea that they actually like.
Research business ideas – Research different small business ideas suitable for kids and think about factors like their age, skills, and the resources available.
Create a business plan – Develop a simple business plan outlining the business idea, target audience, products or services offered, and basic strategies for marketing and sales.
Learn basic business – Introduce the child to basic business concepts such as budgeting, pricing, and customer service, and this can be done through discussions, educational resources, and more.
Decide on pricing – Teach your child about pricing by thinking about the cost of materials, time, and possibly profit. This helps them understand the value of their products or services.
Market the business – Your child could create posters, use social media with parental supervision, or spread the word within the local community such as by placing an ad on a local bulletin board.
Provide good customer service – I highly recommend making sure that you teach your child the importance of treating customers with respect and giving great service as this can lead to repeat business and word-of-mouth referrals.
Track finances – Teach the child basic financial management, including tracking income and expenses.
Celebrate achievements – Celebrate small victories and milestones to keep the child motivated and proud of their entrepreneurial journey.
Throughout this process, parental involvement is so important. Parents can guide, supervise, and provide a supportive environment for the child’s business, making sure it is a positive and educational experience (and safe!).
Can a 9 year old make a small business?
At around 9 years old, they can start businesses that use creativity and simple skills. For example, making greeting cards or friendship bracelets.
What business can a 10 year old make?
There are many things that a 10-year-old can do to make extra money. A 10-year-old can start a lemonade stand, sell crafts, do yard work, and more.
How can an 11 year old make cash?
There are many things that an 11-year-old can do to make extra money. An 11-year-old can rake leaves, walk dogs, sell baked goods like cupcakes, and more.
What are some simple business ideas for children under 12?
Younger kids can think about businesses like lemonade stands, which are simple to set up and manage. They also might create and sell craft items or start a pet sitting service for neighbors if they enjoy spending time with animals.
How can a teenager make money online?
A teen can make money online by blogging, offering online tutoring services, selling printables on Etsy, reselling items online, and more. I recommend reading 17 Online Jobs For Teens To Make Money to learn more.
How can children stay safe when starting a business?
When starting a small business as a kid, it’s important to think about safety and the rules they need to follow. For safety, always make sure they have an adult they trust to help watch over their business. If they’re selling something like food or crafts, make sure everything they use is safe and won’t hurt anyone.
For legal aspects, different places have different rules for businesses. They might need to ask for permission from someone (like you, the parent) or maybe need a permit.
They also need to make sure they have supervision, which means having an adult around to help them out and make sure everything’s going right. Monitoring what they are doing online, if they are dealing with customers, can be very smart because you never know who they are selling to or talking with.
Small Business Ideas for Kids – Summary
I hope you enjoyed this blog post about small business ideas for kids.
From traditional ways to make extra money like running a lemonade stand or mowing lawns to more modern business ideas like making and selling crafts or starting a YouTube channel, the possibilities for kid-run businesses are plentiful.
Starting a business as a kid can teach children valuable problem-solving and life skills. With the proper guidance and help, there are many different good business ideas that a kid can start.
I have been earning my own money from a young age, and it has taught me so much. I highly recommend helping your kids do the same!
Chicago, known for its rich architectural heritage, offers a treasure mine of historic homes in established neighborhoods that invite those with a passion for preserving the past. Buying and restoring historic homes is a rewarding venture, allowing homeowners to not only own a piece of the city’s history but also contribute to the preservation of its architectural legacy. Here are seven steps to help you buy and restore historic homes in Chicago’s established neighborhoods.
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Research and Planning
Before embarking on the journey of buying a historic home, thorough research is essential. Identify neighborhoods with a concentration of historic properties and delve into their architectural styles and historical significance. Chicago boasts neighborhoods like Hyde Park, Lincoln Park, and Logan Square, each with its own unique charm and historic appeal.
Working with Preservation Organizations
Chicago is home to several preservation organizations dedicated to safeguarding its architectural heritage. Collaborating with these organizations can provide valuable insights into available historic homes, preservation guidelines, and resources for restoration. Organizations like the Historic Chicago Bungalow Association and Preservation Chicago can be notable partners in your journey.
Navigating the Purchase Process
Purchasing a historic home involves navigating certain challenges, including potential zoning restrictions and adherence to preservation guidelines. It’s crucial to work closely with a real estate agent experienced in historic properties to ensure a smooth buying process. A realtor with knowledge of the local preservation ordinances can guide you through potential hurdles.
Restoration Process
Once the historic home is acquired, the restoration process begins. Engage with experienced contractors who understand the nuances of working with historic properties. Ensure that any renovations align with preservation standards and respect the original architecture. This process may involve restoring original features, such as molding, windows, and fixtures, to maintain the home’s historical integrity.
Grants and Tax Incentives
One of the significant advantages of buying and restoring historic homes in Chicago is the availability of grants and tax incentives. The City of Chicago, as well as the State of Illinois, offers various programs to support the preservation of historic properties. The Property Tax Assessment Freeze Program, for instance, provides a freeze on property taxes for eight years after substantial rehabilitation.
Chicago Landmarks Commission
If your historic home is located within a designated landmark district, the Chicago Landmarks Commission plays a crucial role. While it may impose certain restrictions, it also provides a framework for preserving the historic character of the neighborhood. Understanding and adhering to the commission’s guidelines is essential for a successful restoration project.
Community Engagement
Engage with the local community and neighborhood associations throughout the buying and restoration process. Building positive relationships with neighbors and community members can enhance the overall experience and garner support for your preservation efforts. Ready to embark on the journey of buying and restoring a historic home in Chicago? Give us a call today! One of the experienced real estate agents at Zoocasa will be more than happy to help you through the exciting home-buying process!
When closing on your home, you signed loan documents agreeing to specific mortgage terms. One of those documents likely included an agreement to maintain continuous homeowners insurance coverage. If your insurance lapses or gets canceled, your lender may step in and obtain lender-placed insurance (LPI) — also known as forced-placed insurance — to safeguard the property.
Let’s dive deeper into LPI’s role, how it works, and how you can potentially avoid it.
Understanding Lender-Placed Insurance
Several factors are causing insurance carriers to suspend new policies or not renew existing ones in areas they have deemed “high-risk.” Rising disaster losses, construction costs, reinsurance rates and restrictive state regulatory environments are to blame in areas like Florida, Louisiana, and California. This trend is leaving some homes unprotected.
Borrowers with lapsed or canceled homeowners policies or with policies deemed insufficient will be subject to a lender-placed insurance plan. It’s a policy paid for by the borrower.
What Is Lender-Placed Insurance?
A lender-placed insurance policy is a policy that’s added to your mortgage if there’s a lapse in insurance coverage safeguarding your home. The lender is placing a policy to ensure the property remains protected. This limited insurance typically comes with a higher cost and provides less coverage than a policy you can obtain on your own. For example, it does not protect against losses to personal property.
When and Why Is LPI Implemented?
Lenders utilize LPI to bridge any insurance gaps and uphold the continuous coverage required by your home loan agreement. This coverage ensures that the property remains protected, safeguarding the lender’s financial stake in it. The cost of LPI is debited from the escrow account and collected in the monthly mortgage payment.
Key Players Involved
Mortgage companies, insurance providers and borrowers all play distinct roles in the lender-placed insurance process.
Lenders
Uphold the homeowner’s requirement to maintain homeowners insurance
Initiate LPI to protect the home and their financial investment in the property
Charge and collect premiums, which are added to the homeowner’s escrow account, resulting in an increased mortgage payment amount
Insurance Providers
Provide LPI coverage at the request of a lender
Manage LPI policies, including collecting premiums from the lender, processing claims and maintaining coverage
Ensure compliance with applicable laws and regulations
Borrowers
Are responsible for maintaining adequate homeowners insurance coverage to protect their property and comply with the mortgage agreement
Should communicate with the lender to ensure the lender has the most up to date insurance information
Seek assistance from an insurance company, agent, or broker if they are facing challenges securing insurance
How Lender Placed Insurance Works
Borrowers need to understand the importance of fulfilling their obligation to maintain homeowners insurance. Here’s an overview of the steps involved when a borrower does not maintain the required property coverage:
Lenders regularly monitor a borrower’s insurance coverage. Upon discovering a lapse or inadequacy in the homeowner’s insurance, they will initiate the process of obtaining LPI. A lender typically will first notify the homeowner before purchasing LPI, and then will send a Certificate of Coverage to inform the homeowner once LPI is in place.
The LPI premiums are added to the homeowner’s mortgage balance, increasing the monthly mortgage payments. These premiums are often much higher than those of standard homeowners insurance.
Lenders will maintain LPI coverage until the homeowner secures adequate homeowners insurance.
Once the homeowner obtains satisfactory homeowners insurance, the lender discontinues LPI coverage and the associated charges from the escrow account.
Triggers for LPI Placement
Lenders initiate lender-placed insurance when there is a lapse in the required insurance coverage on a property that serves as collateral for a loan. Common situations that trigger this include:
1. Expired or Canceled Homeowners Insurance
If the existing insurance policy on the property lapses or is canceled, leaving the property uninsured, the lender may initiate LPI.
Why would a policy be canceled? Insurers may drop homeowners insurance for a variety of reasons. Often, underwriting standards change, and insurers decide not to cover properties in certain areas. Policies can also be canceled due to non-payment of premiums, frequent or fraudulent claims, or changes in property usage, such as turning a home into a rental property.
2. Incorrect Mortgagee Listed
LPI also may be triggered when the insurance company does not have the lender listed as the mortgagee. It is important to list the correct mortgagee so the insurance company can send automatic renewals directly to the lender.
3. Inadequate Coverage
A lender may impose LPI if a borrower does not obtain or maintain the insurance coverage required by the loan agreement. A great example of this is wind coverage. If a homeowner’s policy excludes wind, it may be deemed insufficient, requiring them to obtain a separate policy or additional coverage.
The Role of Lender-Placed Insurance
The primary role of lender-placed insurance is to protect the home and the lender’s investment in the property by ensuring it’s adequately insured against potential losses due to damage or destruction. It’s a backup measure if the homeowner does not maintain their homeowners insurance policy.
Cost and Coverage
There are significant differences between standard homeowners insurance and LPI in terms of coverage, costs and flexibility.
Comparison with Standard Homeowners Insurance
Coverage Limits and Scope: LPI provides limited coverage, often only covering the dwelling or sometimes only up to the mortgage balance. Standard homeowners insurance usually offers broad coverage, including liability, personal property and additional living expenses.
Premiums. LPI is often more expensive than insurance obtained directly by the borrower. That’s because homeowners have the flexibility to choose their own insurer and policy with regular homeowners insurance. Whereas lenders do not have the same ability to negotiate lower premiums for lender-placed insurance, as they are not the policyholders.
Flexibility: Standard insurance is chosen by the borrower, so the homeowner has more flexibility in deciding which provider and policy to select. With LPI, the lender has to select the insurer and policy, which may not be the best fit for each borrower.
Risks and Controversies
LPI is not uncommon but it does come with drawbacks, so reputable lenders make efforts to help homeowners avoid it. Some reasons to avoid LPI include:
Higher costs, which can place a financial burden on homeowners
Less comprehensive coverage than standard insurance, which leaves homeowners insurance with less protection in case of a loss
Lack of control since the lender chooses the LPI policy and terms
It’s important to note that LPI is considered a protective, backup measure. Lenders typically prefer that homeowners maintain their own insurance policies.
Alternatives to Lender Placed Insurance
It’s always in your best interest to maintain your own insurance policy, as it’s more affordable and provides more coverage. However, when necessary, LPI serves to fill gaps in coverage to keep the home protected. Let’s look at some strategies for potentially avoiding lender-placed insurance.
Maintain Homeowners Insurance or Replace as Soon as Possible
Homeowners should maintain their standard homeowners insurance policy. If your insurance lapses or is canceled, replace the required insurance on your property as soon as possible and send proof of insurance to us. Pennymac will update your insurance information within 3-5 business days from the time we receive the request and insurance confirmation. Once completed, the new insurance information will be displayed in the Escrow section of your online account.
Exploring Other Insurance Options
If you’re denied coverage due to being in a “high-risk” area, talk to your neighbors about what insurance companies they use. If you’re moving into a new home, your lender or real estate agent may suggest options. If you still need help securing insurance, find out if you live in a state that offers FAIR (Fair Access to Insurance Requirements) plans.
FAIR plans are government-mandated property insurance plans that provide coverage to individuals and businesses who can’t obtain insurance in the regular market. These plans typically include basic coverage for properties considered high-risk or difficult to insure due to factors such as location, age or type of construction.
If you’re turned down or non-renewed by your current insurance company or are otherwise in need of coverage, you may apply for coverage under the FAIR Plan through an agent or broker licensed to sell FAIR property insurance. You may want to contact your insurance agent/company to understand exactly what is and isn’t covered under the FAIR plan.
Keep in mind, though, that while FAIR plan insurance policies can be a lifeline for those with no other options, they may be costly and may offer limited coverage. It’s optimal to try to maintain your own homeowners insurance policy to adequately protect your interests and assets. If you have to carry a FAIR plan, talk to your insurance agent/company about obtaining supplemental coverage that may not be covered under the FAIR plan.
Communication and Transparency
Communication and transparency are essential for both the borrower and the lender. You should notify the insurance company promptly if you encounter difficulties maintaining mandatory insurance. Prompt and proactive communication can give you time to explore options that may help you avoid LPI.
Your lender also will be committed to ensuring you are promptly notified and receive information that is helpful regarding costs and coverage, and they should be available to help if you have concerns.
Take Steps to Avoid Lender-Placed Insurance
At Pennymac, our goal is to help you take action to avoid lender-placed insurance. If you’re facing a possible lapse of sufficient homeowners insurance coverage, visit mycoverageinfo.com/pennymac for information that can potentially help you avoid the extra expense and reduced coverage of LPI.
Most people have spent their entire lives living with other people, whether it’s their parents or a roommate. And while it’s great to have company in your home, sometimes the thought of having your own space sounds liberating. You can come and go as you please, you don’t have to worry about another person’s life, you can decorate with your favorite items and colors and relax in your pajamas until noon without being criticized.
However, living alone can also have its pitfalls, including concerns about security and nervousness around feeling lonely. While it’s legitimate to have a fear of living alone, there are ways to overcome it.
Reasons you may fear living alone
All of us at one point or another feel lonely or have had the fear of being alone. However, there are many different reasons people are afraid to live alone ranging from having anxiety, being scared or worrying about loneliness. These fears are amplified if you’re a woman.
However, we’ve got good news. There are several simple steps you can take to help make your abode more secure, boost your comfort level and enjoy your freedom to its fullest. But first, let’s examine some reasons you fear living alone and some symptoms that go along with it.
Mental health conditions and anxiety disorders
Mental health and different forms of anxiety can make the idea of living alone extremely difficult. Whether it’s a specific disorder or a fear from a previous traumatic experience, it’s a good idea to do some research on symptoms of phobias and how to overcome them with treatment.
And don’t worry, you’re not alone. In recent years, studies have shown that Millenials are the loneliest generation next to Gen X and Babyboomers.
Remember, it’s always good to keep an eye on your mental health and phobias and to do so, there are several different online medical resources — such as Healthline Media — that use academic research institutions and do peer-reviewed studies to help you better understand mental disorders and specific phobias. If you live outside the U.S., there are different resources for you, such as Anxiety Care UK.
Here are a few other anxiety disorders and phobias that could lead to feelings of anxiety about living alone.
Monophobia or Autophobia
Many people experience some form of anxiety or specific phobias and one type is Monophobia, or Autophobia, which is the fear of being alone. Autophobia is currently not an official diagnosis by the Diagnostic and Statistical Manual of Mental Disorders fifth edition, which has strict sourcing guidelines. However, it’s currently a subcategory of other phobias.
Understanding autophobia is difficult as this particular phobia can manifest differently from person to person. Some people might experience the fear of being separated from a specific person, while others might experience fear of being home alone or fear the feeling of being lonely.
However, it’s important to note that this phobia is different than just feeling lonely. According to Medical News Today, “Loneliness refers to negative emotions that arise when a person feels that they have too few social interactions or meaningful connections… Having autophobia involves severe anxiety triggered by the idea of spending time alone.”
This form of anxiety can manifest with different physical symptoms. Here are some of the common symptoms of this phobia including heart palpitations, chest pain, sweating, shaking and chills. There are different types of treatment for autophobia and other phobias, some of which include, cognitive behavioral therapy, speaking to a mental health professional and exposure therapy.
Separation anxiety disorder or severe anxiety
Severe anxiety is not the same as a phobia. As mentioned, there are several different anxiety disorders and one of them is separation anxiety. This disorder can come from underlying issues from childhood, such as parental divorce or other childhood experiences that can sometimes lead into adulthood. There are different anxiety symptoms ranging from the fear of leaving home to the fear of leaving a loved one.
As for every other anxiety disorder, there are different anxiety levels that can go anywhere from extreme distress to panic attacks. The good news is there are different forms of treatment that can help reduce your fear caused by separation anxiety symptoms.
If at a certain point you want to work on your specific phobias or fear, find someone who can provide medical advice who knows your medical history. While you can try to self-regulate, there are treatment plans a therapist can help you with to help you overcome fear, including providing medical advice, exposure therapy or avoiding anxiety triggers.
Safety
Even if you don’t have a fear of being alone, safety is a concern when it comes to living alone. It can even give you trouble sleeping or provide doubts about even considering living alone. And, wanting to feel safe isn’t a bad thing, especially when there are situations, such as burglars, that are an actual threat.
If it makes you feel better, you can go to extreme lengths to make yourself feel physically safe in your own home. Consider products such as AddaLock or alarms to make your home feel safer and take away your fear.
Community
Another reason some people don’t like the thought of living alone is the sense of loneliness or a loss of community. We all rely on relationships in our everyday life, whether it be friends or family. These relationships are what make our lives full and interesting. When you feel like you’ve lost that, it’s hard and isolating.
However, just because you live alone doesn’t mean you are alone. Living alone can actually be a great way to cool down and give yourself a place to regroup after being around so many people.
How to help overcome the fear of living alone, or autophobia
Whether you have a fear or phobia of being alone or are just worried about loneliness, there are ways to overcome it. The following 13 strategies will help you get over your fear of being alone.
1. Do small things alone first
If you’re not used to being alone, then it might be a good idea to start doing small things alone first. Take yourself to lunch and enjoy the bliss of eating solo or take yourself to a movie and rejoice in being able to eat the popcorn all by yourself. No matter what kind of activity you pick, this is a great place to learn how to be your own best friend.
2. Get to know your neighbors
Once you get settled in, spend a few days checking out who lives around you. Listen to your gut and introduce yourself to those who seem trustworthy and start to build a relationship. Elderly couples and other women living alone is a good start.
We’re not talking about spending time with them, you don’t even have to become best friends. But having a neighbor to turn to, whether it’s to borrow a cup of sugar or to ask for help in an emergency, will go a long way toward helping you feel comfortable living alone. It would be an added bonus if you ended up with some new friends who would help with loneliness.
3. Keep friends and family in the loop
Whether you’re headed out on a date, going for a run in the park or traveling with your girlfriends, let your friends and family know your plans. You might consider using one of these free personal security apps, which will notify your emergency contacts if you don’t arrive at your destination. Plus, they offer a handful of other security features, like GPS tracking.
4. Keep your eyes wide open
Stay alert, stay alive. This is especially true when you’re entering and exiting your apartment. Be aware of the people in your surroundings and if a person gives you bad feelings, trust it and get to a safe place immediately.
When you’re in the parking lot of your apartment or condominium, keep your keys in hand and walk with confidence and focus. You may consider calling a friend and talking on your phone until you’re safely inside your car or in your home.
5. Purchase a security system
You don’t have to have a phobia or fear to have a security system. Security systems are no longer reserved for sprawling suburban estates. These days, well-respected security companies like Ring, ADT, FrontPoint and Protect America offer effective, budget-friendly security systems that are perfect for apartments, condominiums and lofts.
Opt for a wireless system so you don’t have to drill holes. As a bonus, wireless security systems are notoriously easy to install and when you’re ready to move, many providers will let you take your system with you.
Don’t open the door to anyone who knocks or rings the doorbell. Look through the peephole or ask the person for identification. If you feel uncomfortable opening the door, ask them to return at a later time. Or, you can call a neighbor and ask them to keep you company as you let the person visiting in.
6. Get a four-legged companion to ease autophobia
Nothing beats being greeted by a wagging tail after a long day at work. In addition to warming your heart and curing your loneliness, Fido can deter criminals and help alert you to danger. Of course, you’ll want to check with your landlord to make sure they allow pets before picking up your new furry friend.
7. Don’t blab about what you’re up to
Having some fear is good when it comes to keeping you safe. Whether it’s a friendly cashier or a new acquaintance, be wary of telling anyone you don’t know well that you live alone.
And while it’s tempting to update Facebook or Instagram with your whereabouts, doing so can put you in harm’s way. Avoid social media updates that can clue people into the fact that you live by yourself.
8. Give your home a lived-in look
Letting your mail pile up in the mailbox can tip off criminals you’re not home. If you’re going out of town, ask a trusted neighbor to keep an eye on your apartment. Consider putting interior lights on timers, so your apartment always appears occupied.
9. Cozy up your residence
Living alone is fabulous when you crave solitude, but it can get a bit lonesome. Make your residence a comfortable and lovely space, with pictures of friends and family and sentimental items like a favorite throw blanket or a beloved scented candle to combat loneliness.
Turning up the tunes can boost your spirits and mask those random creaks so you feel more at ease. Of course, you don’t want to upset your neighbors, so keep the volume reasonable. And don’t overdo it in the late hours. Voilà, home sweet home!
10. Pump up your social life
Loneliness is a state of mind more than anything else, but it doesn’t hurt to keep an active social life. Consider hosting a dinner party or inviting a few girlfriends over for a happy hour. Good company and laughter will make your house feel like a home in no time.
11. Lock doors and windows
No one wants to feel like they’re living in a high-security prison, but keeping doors and windows locked can offer you a valuable sense of security and ease your fear of living alone. Many apartments have sliding glass doors, often with subpar locks. Secure a sliding glass door with a metal sliding glass door lock or pole to help secure it. Remember to lock your door when you step out, even if it’s just for picking up the mail or keeping the trash out. It only takes a moment for someone to sneak in, so it’s better safe than sorry.
Before you move in, don’t hesitate to check that all door and window locks work properly. If they don’t, have the landlord fix them before you sign the lease.
12. Get informed about crime trends
Discovering what type of crime is happening in your neighborhood can help you feel more secure in your apartment because you’re more aware. There are a number of free crime-mapping websites, such as CrimeMapping.com, that reveal the location and type of crime, as well as the date of occurrence.
13. Have an exit plan
Create an exit plan in case of an emergency, such as fire, natural disaster or a break-in. If you will be out of your home for a few days, know whom you can stay with. Include your friends in the plan, so they can support you when needed. Keep all the items you want to take with you in the same room to create a calm and controlled setting in an emergency.
Living alone is fun!
Living on your own is a fun, exciting adventure. Make sure to take care of your mental health and make the most of this experience by using these tips to avoid the fear of living alone.
On a salary of $40,000 per year, you can afford a house priced at around $100,000-$110,000, assuming you have some money — say, $10,000 or $15,000 — for a down payment and are not already carrying debt, such as a car loan or student loan. The number can change quite a bit when you factor in your specific numbers:
• Your debt
• Your down payment
• Your taxes, insurance (and homeowners association dues, if applicable)
• Your interest rate
• Your loan type
• Your lender
Understanding how these factors play into home affordability can get you closer to finding a home you can afford on your $40,000 salary.
What Kind of House Can I Afford With $40K a Year?
On a $40,000 salary, you want to get the nicest home you can. But what amount of home mortgage loan you qualify for depends on a number of factors, including your debt, income, interest rate, down payment, type of loan, and lender.
Understanding Debt-to-income Ratio
You may have heard that debt can seriously derail your plan to buy a house, but you might not know exactly how it does that. Here’s the scoop: A potential lender will calculate your debt-to-income (DTI) ratio by adding all your monthly debts and dividing that number by your monthly income.
Your DTI ratio determines how much home you can afford. If you have more debt, you can’t afford a bigger monthly housing payment, which means you’ll qualify for a smaller home loan. For example, if your total debt amounts are $3,000 each month and your income is $6,000 per month, your debt-to-income ratio would be 50%. This is well above the 36% guideline many mortgage lenders want to see. 💡 Quick Tip: To see a house in person, particularly in a tight or expensive market, you may need to show the real estate agent proof that you’re preapproved for a mortgage. SoFi’s online application makes the process simple.
First-time homebuyers can prequalify for a SoFi mortgage loan, with as little as 3% down.
How to Factor in Your Down Payment
A down payment can also drastically impact home affordability. If you have a larger down payment, you’ll be able to afford a higher-priced home. With a down payment of 20% or more, you’ll be able to avoid the added expense of private mortgage insurance (PMI), which will in turn increase the loan amount you’ll be able to qualify for.
Try using a mortgage calculator to see how different down payment amount can affect how much home you’ll be able to qualify for.
Factors That Affect Home Affordability
To complete the picture of home affordability, you’ll also need to consider these factors:
• Interest rates A higher interest rate means you’ll qualify for a smaller home purchase price. A lower interest rate increases how much home you’ll be able to afford.
• Credit history and score You’ll also see that your credit score directly affects home affordability. With a good credit score, you’ll qualify for a better rate, which means you’ll qualify for a higher mortgage.
• Taxes and insurance Higher taxes and insurance can also affect home affordability. Your lender has to take into account how much you’ll be paying in taxes and insurance and include it as part of your monthly payment.
• Loan type Different loan types have different interest rates, down payment options, and credit requirements, which can affect home affordability.
• Lender Your lender may be able to approve you at a higher DTI ratio — some lenders will allow the DTI to be as much as 50%.
• Area The cost of living in your state is a top factor in determining home affordability. Price varies greatly around the country, so you may want to consider the best affordable places to live in the U.S. if you’re open to moving.
How to Afford More House With Down Payment Assistance
If you make $40,000, how much house you can afford also depends on what programs you’re able to qualify for. Down payment assistance programs can help with home affordability. These programs offer a grant or a second mortgage to cover a down payment. These programs are often offered by the state or city you live in. They may be restricted to first-time homebuyers or low-income borrowers, but these programs are worth looking into. Examples include Washington state’s Home Advantage DPA and Virginia’s HOMEownership DPA. Look for programs in your state, county, and city. You may also want to read tips to qualify for a mortgage. 💡 Quick Tip: Backed by the Federal Housing Administration (FHA), FHA loans provide those with a fair credit score the opportunity to buy a home. They’re a great option for first-time homebuyers.1
How to Calculate How Much House You Can Afford
There are some guidelines lenders use to qualify borrowers for a mortgage. Knowing how home affordability is calculated can help you understand what income you need to make and what debts you need to pay off to qualify for a mortgage. Lenders often follow the 28/36 rule, looking for a housing payment less than 28% of a borrower’s income and total debt payments less than 36% of your income. Here’s how to calculate it.
Back-end ratio (36%): The back-end ratio is your debt-to-income ratio. Add together all of your debts (including the new mortgage payment) to make sure all debts are under 36% of your income. If your monthly income is $3,333 ($40,000/12 = $3,333), your debts (including the mortgage payment) should be no more than $1,200 ($3,333*.36).
Front-end ratio (28%): With a monthly income of $3,333, this number works out to $933.
The 35/45 Rule: It’s possible to qualify for a larger mortgage based on the 35/45 guideline, which is used at the discretion of your lender. With a monthly income of $3,333, the housing allowance (35% of your income) increases to $1,167 and the total monthly debts (45% of your income) increases to $1,500.
An easy way to calculate how much home you can afford is with a home affordability calculator.
Home Affordability Examples
For homebuyers with a $40,000 annual income (a $3,333 monthly income), traditional guidelines of a 36% debt-to-income ratio give a maximum house payment of $1,200 ($3,333 * .36). Each example has the same amount for taxes ($2,500), insurance ($1,000), and APR (6%) for a 30-year loan term.
Example #1: Too much debt
Monthly credit card debt: $100 Monthly car payment: $300 Student loan payment: $300 Total debt = $700 total debt payments
Down payment = $20,000 Maximum DTI ratio = $3,333 * .36 = $1,200 Maximum mortgage payment = $500 ($1,200 – $700)
Home budget = $54,748
Example #2: Low-debt borrower
Monthly credit card debt: $0 Monthly car payment: $100 Student loan payment: $0 Total debt = $100
Down payment: $20,000 Maximum DTI ratio = $3,333 * .36 = $1,200 Maximum mortgage payment = $1,100 ($1,200 – $100)
Home budget = $141,791
How Your Monthly Payment Affects Your Price Range
As shown above, your monthly debt obligations affect how much house you can afford. With a lot of debt, it’s hard to make a mortgage payment that qualifies you for the home you want.
It’s also important to keep in mind how interest rates affect your monthly payment. By paying so much interest over the course of 30 years, even small fluctuations in interest rates will affect your monthly payment. That’s why you see your neighbors scrambling to refinance their mortgages when interest rates drop.
Recommended: Home Loan Help Center
Types of Home Loans Available to $40K Households
There are different types of mortgage loans available for households in the $40K range:
• FHA loans: With Federal Housing Administration loans, you don’t have to have perfect credit or a large down payment to qualify. In fact, you can apply for a FHA loan with a credit score as low as 500.
• USDA loans: If you live in a rural area, you’ll definitely want to look at United States Department of Agriculture loans. You may be able to qualify for a USDA mortgage with no down payment and competitive interest rates.
• Conventional loans: For borrowers with stronger financials, conventional loans are some of the least expensive mortgages in terms of interest rates, mortgage insurance premiums, and property requirements. They’re backed by the federal government, and if you’re able to qualify for a conventional mortgage, it could save you some money.
• VA loans: For qualified veterans and servicemembers, the U.S. Department of Veterans Affairs loan is quite possibly the best out there. There are zero down payment options with great interest rates. If your credit is hurting, you still might be able to get a loan since the VA doesn’t have minimum credit score requirements (though the individual lender may).
The Takeaway
With proper planning, a salary of $40K should be able to get you into a home in many U.S. markets. However, you’ll want to make sure you keep a close eye on your credit score and save up for a down payment or find programs to help with one. Over time, the small, determined steps you take will lead you to your goals.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
Is $40K a good salary for a single person?
You work hard for your salary, and a $40,000 salary for a single person is a good start, though it is below the median income for a single person, which is $56,929, according to data from the U.S. Census.
What is a comfortable income for a single person?
Comfortable depends on the cost of living where you live and your personal needs, but it can range from around $45,000 per year in Mississippi to $112,000 in Hawaii.
What is a liveable wage in 2024?
Your liveable wage depends on your area, working household members, and children. For example, it can range from $15.89 per hour for a single living in Beaumont, Texas, to $44.99 per hour for a household with three children in St. George, Utah.
What salary is considered rich for a single person?
A salary of $234,342 would put you in the top 5% of all earners in the U.S.
Photo credit: iStock/stevecoleimages
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
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.
Now that we’ve been working from home for a while, everyone has more or less figured out what works. But there are still a few basic pieces of Zoom etiquette that people need to master.
Whether you’re hosting a video call or attending one, here are some Zoom etiquette tips to keep you from being “that guy” on your calls.
1. Mind the background noise
Be mindful of the background noise on your end. Things you might have grown accustomed to and don’t notice are noisy and distracting for those on a Zoom call with you.
Think about appliances that are running, like the dishwasher, washing machine and dryer, and fans and HVAC units can make noticeable noise. Consider either turning them off or moving well away from them during your call.
And one of the most obvious, yet overlooked, pieces of advice is to close the door while on a call. If you’re working where other people live or work, a closed door is a respectful signal to not bother you and keep noises from outside the room from being heard.
2. Clean up your background
What’s going on behind you during calls? Can others see cars passing by the street through your front window or the sink full of dirty dishes in your kitchen? Your visible background can say a lot about you and leaves an impression on Zoom calls. Try to keep a neutral background when possible and keep it clean so you don’t show off your messes.
Zoom does offer virtual background options, but unless you’re desperate, try not to use it all the time. Virtual backgrounds are fun and quirky at times, but they can create distrust or seem improper if overused. It’s alright to use them in an emergency when you’ve got a couch full of laundry behind you, but if it’s not necessary, it’s best to let everyone see you in your work environment at home.
As a word of warning, it’s appropriate to show everyone where you’re working in your home, but do it with caution! Yes, your bed is comfortable, but do you really want people seeing your bedroom? Instead, try setting up your camera in such a way that it doesn’t look like you’re lounging in your bedroom, like positioning yourself so only a wall is visible.
3. Check the lighting
Especially when working in a small space, lighting is challenging. An overhead light can create harsh or awkward shadows on your face. Natural light always shows up best through your webcam, but if you don’t have natural light that adequately highlights your face, you might want to consider alternative options like a ring light.
4. Use a dedicated office space
It’s important to have a specific office area in your home in general, but it’s especially helpful for taking calls. It can help you minimize distractions and avoid potential mishaps.
If you’re always taking calls from the same spot, you’ll know what parts of your house show in the background, how to minimize noise and adjust lighting and keep messes and distracting items out of the way. Or, if you have a pet, consider having a bed next to your Zoom location, so they know there’s a place for them and won’t jump into your lap mid-call.
5. Dress to impress
When you’re at home and have your closet only steps away, it’s tempting to change into comfortable clothes for work. When on camera, it’s best to have slightly more professional attire. This doesn’t mean you need to wear a suit and tie or a dress, but it’s best to put on something other than your sweats and an old hoodie. Try setting timers a few minutes before calls so you know when to change.
And just because people are only seeing the top half of your body doesn’t mean you should skip the pants — we all know that some Zoomers are flying fast and loose with pants, which is a dangerous game to play. If for some reason you do need to stand up or move during your meeting, you don’t want everyone seeing your unmentionables in a professional environment.
6. Watch the chat
Zoom’s chat function is a great tool for sending comments while other people are speaking and for sharing links. Sometimes, these comments are important or someone is sharing a link to a document you need to view. Check the chat throughout your meeting so you aren’t completely lost and others don’t think you weren’t paying attention.
7. Mute yourself
Even if there’s no background noise where you’re working, mute yourself when you’re not speaking. Unexpected things happen, like a doorbell ringing or noise you’re unaware of.
8. Turn off your camera when appropriate
While it’s nice to show everyone your face, turning off your camera is sometimes appropriate. If you’re getting up from your desk to grab something from another room, turn off your video. Seeing someone get up and leave for a minute may cause others to wonder what’s going on, and it can distract from the actual meeting at hand.
Or, if you’re moving yourself during the call from one room to another, you should also turn off your video. Your coworkers don’t need to feel like they’re on a roller coaster or traveling through hyperspace while you’re walking through your home.
Finally, turn off the camera if you’re eating, even if it’s just a quick snack. It’s poor Zoom etiquette and, frankly, gross to others if you’re eating while on a call.
9. Be careful while screen sharing
We’ve all had someone inadvertently show a confidential or personal message in a Zoom meeting, whether it was via notifications or poor planning when sharing their screen.
If you’re showing your screen to others on a call, make sure the screen you share is free from messaging platforms or other irrelevant windows. It’s also smart to mute your notifications while screen sharing, too. If you have difficulty remembering to turn off your notifications, try installing something like Muzzle that will silence your notifications for you when you share a screen.
10. Look into the camera
Many of us are using more than one monitor and are on a zoom call while viewing other documents on different screens. Even if what you’re viewing on another screen is relevant to the meeting, it’s better to look into the camera so people know you’re actively present in the meeting and not distracted.
11. Test video, microphone beforehand
Do a quick test of your audio and video before your meeting starts. It only takes a minute or two and can help you avoid awkward moments of realizing you have a mess behind you or wasting time at the beginning of the call to figure out why the sound isn’t working.
12. Use reactions
Zoom has a few reactions you can use when you don’t want to unmute yourself or make too much noise. These are emojis that you can click that will show on your video window for a few seconds. It’s much easier when you have a large meeting to show you understand something by giving a visual “thumbs up,” rather than verbally saying “I got it” and everyone wondering who said what.
13. Try multiple windows
In your Zoom settings, you can set it to display on two windows. This is especially helpful for meetings where people are sharing a screen because you can see the gallery view for people’s faces, as well as a screen share. That means no more scrolling through everyone on the top or side of the screen during calls!
14. Ask for permission to record
One of the greatest benefits of using Zoom for meetings is that you can record entire meetings and refer back to them later or send them to people who couldn’t attend. But, before you hit the button to record, make sure you’ve asked those in the meeting if it’s OK. Chances are, everyone will be fine with it, but it’s still good Zoom etiquette to ask so that others are aware.
15. Beware of taking calls from your patio
When the weather is good, it’s nice to take calls from outside. When you’re working from your balcony or patio, be aware of your noise level as neighbors might have opened windows to let fresh air in and they can hear you. This is bothersome to the neighbors who are trying to work or take calls themselves, and it could give away information about your company that shouldn’t be shared.
You should also monitor the noise in your background. It’s relaxing to hear birds chirping or feel a breeze, but it’s annoying to everyone else on your Zoom call.
16. Take precautions with common areas
Whether you’re in a conference room, business center or other shared common space, take precautions and be considerate of those around you. That means practicing social distancing, wearing a mask and being as quiet as possible — including when using the printer and coffee machine. No one wants to be interrupted in their meeting by someone printing out a 100-page document nearby.
Practice good Zoom etiquette
Most of us have had something unexpected happen during a Zoom call — and that’s OK! The great part about this pandemic is that it has shown us we’re all human. Even the CEO of the big company is dealing with pets, unexpected doorbells or visits from their little ones while they’re working. Life happens.
That being said, it’s still a work environment and we want to avoid being too unprofessional. Be conscious of Zoom etiquette and you’ll (hopefully) avoid being the distraction during calls!
On a salary of $45,000 per year, you can afford a house priced at around $120,000 with a monthly payment of $1,050 for a conventional home loan — that is, if you have no debt and can make a down payment. This number assumes a 6% interest rate.
These numbers change—sometimes dramatically—depending on a few factors, including:
• How much debt you have
• What your down payment is
• How much you’re paying for taxes, insurance, and homeowners association dues, if anything
• What interest rate is available to you
• What type of loan you get
With the median home price in the U.S. topping $400,000, you might be wondering how everyone else affords a home in your neighborhood. We’ll cover every aspect of home affordability for a $45,000 salary to help you work toward getting the home you’ve always wanted. 💡 Quick Tip: A VA loan can make home buying simple for qualified borrowers. Because the VA guarantees a portion of the loan, you could skip a down payment. Plus, you could qualify for lower interest rates, enjoy lower closing costs, and even bypass mortgage insurance.†
What Kind of House Can I Afford With $45K a Year?
The kind of home you can afford depends on more than your $45,000 salary. It’s also based on your debt-to-income (DTI) ratio, interest rate, down payment, type of home loan, and lender.
First-time homebuyers can prequalify for a SoFi mortgage loan, with as little as 3% down.
Understanding Debt-to-income Ratio
Your DTI ratio is a key factor in determining how much home you can afford. The more debt you have, the lower your housing payment needs to be. This directly translates into a lower priced home. So, what exactly is a DTI ratio? It is the proportion of monthly debt you need to repay in relation to your gross monthly income.
For example, if your total debt amounts are $2,000 each month and your income is $6,000 per month, your debt-to-income ratio would be 33%. This falls under the 36% threshold mortgage lenders look for with conventional home mortgage loans.
However, keep in mind that the $2,000 has to include your new mortgage payment. If your debts cost $500 each month, your monthly mortgage payment cannot be more than $1,500.
How to Factor in Your Down Payment
Your down payment also plays a significant factor in home affordability. Generally, the higher down payment you have, the more home you can afford. If you purchase a home far below what you can afford, your monthly payment will be much lower.
If you make a down payment of 20% or more, you’ll also be able to save on mortgage insurance premiums, which are typically required on most loan types for homes purchased with a down payment lower than 20%.
If you play around with a mortgage calculator, you can see how a larger down payment can affect your monthly payment and home price.
Factors That Affect Home Affordability
Beyond your debt, income, and down payment, there are a number of other factors that go into home affordability. These include:
• Interest rates The interest rate you have on your home dramatically impacts how much home you can afford. When interest rates are high, your monthly payment is higher. When interest rates are down, you pay less interest on your loan, which means you can afford a more costly home. Remember that if rates drop significantly a mortgage refinance is always an option.
• Credit history and score The interest rate that you’ll qualify for is dependent on your credit score and history. A better credit score will qualify you for the best interest rates, which means your monthly payment will be lower, which can increase your buying power.
• Taxes and insurance Taxes and insurance factor into your home’s monthly payment. They will be calculated into the home’s PITI (payment, interest, taxes, insurance) and included as part of your monthly debts.
• Loan type The type of loan you get affects home affordability. This is due to the different interest rates and down payment options available to specific loan types. VA loans from the U.S. Department of Veterans Affairs, for example, come with a lower interest rate and don’t require a down payment.
• Lender Lenders may have discretion to increase the allowable debt-to-income ratio. Some can go as high as 50%.
• Location Some areas are more affordable than others. Thinking about moving? Take a look at a list of the best affordable places to live in the U.S.
Recommended: The Cost of Living By State
How to Afford More House With Down Payment Assistance
One of the best tools for increasing home affordability is with down payment assistance programs. These programs provide funds for the down payment (and sometimes closing costs) to help make homes more affordable for buyers.
Some programs offer down payment assistance in the form of a grant that does not need to be repaid, while others finance a second mortgage which may need to be paid when the home is sold (but sometimes is forgiven earlier). In Colorado, for example, there’s the CHFA Colorado Down Payment Assistance Grant. Virginia offers the Virginia HOMEownership Down Payment and Closing Cost Assistance program (DPA)
Search your state, county, and city to see what programs are offered for your area. You may also want to read tips to qualify for a mortgage.
How to Calculate How Much House You Can Afford
Calculating how much house you can afford is smart, especially if you’re a first-time homebuyer and making early plans to buy a home. There are some guidelines lenders use to qualify borrowers for a mortgage, including:
The 28/36 Rule: This guideline states that no more than 28% of your income should go to your monthly housing payment and your debt-to-income ratio should be no more than 36% of your income
When calculating DTI (also known as the back-end ratio), your lender will add all of your debts (including the new mortgage payment) to make sure all debts will fall under 36% of your income amount. If your monthly income is $3,750 ($45,000/12 = $3,750), your debts (including the mortgage payment) should be no more than $1,350 ($3,750*.36).
Lenders will also calculate the front-end ratio, which should be no more than 28% or your income. With a monthly income of $3,750, this number works out to $1,050.
The 35/45 Rule: Some lenders may go by the 35/45 guideline, which allows for a housing payment up to 35% of income and 45% of total DTI ratio. This expanded allowance is up to the lender, but may allow for qualification of higher purchase amount and payment.
With a monthly income of $3,750, the housing allowance (35% of your income) increases to $1,312.50 and the total monthly debts (45% of your income) increases to $1,687.50. An easier way to calculate how much home you can afford is with a home affordability calculator.
Home Affordability Examples
Let’s take a look at two examples of homebuyers with $45,000 incomes in differing scenarios. All assume the same taxes ($2,500), insurance ($1,000), and APR (6%) for a 30-year loan term (just for illustrative purposes).
The $45,000 annual salary is divided by 12 to get a $3,750 monthly income and the maximum DTI ratio works out to be $1,350 ($3,750 * .36).
Example #1: $45,000 income but lots of debt Monthly credit card debt: $300 Monthly car payment: $350 Student loan payment: $300 Total debt = $950 total debt payments
Down payment = $20,000 Maximum DTI ratio = $3,750 * .36 = $1,350 Maximum mortgage payment = $400 ($1,350 – $950)
Home budget = $38,069
Even with a $20,000 down payment, it could be hard to buy a home in this scenario.
Example #2: $45,000 income with little debt Monthly credit card debt: $50 Monthly car payment: $0 Student loan payment: $0 Total debt = $50
Down payment: $20,000 Maximum DTI ratio = $3,750 * .36 = $1,350 Maximum mortgage payment = $1,300 ($1,350 – $50)
Home budget = $171,925
💡 Quick Tip: Don’t have a lot of cash on hand for a down payment? The minimum down payment for an FHA mortgage loan is as low as 3.5%.1
How Your Monthly Payment Affects Your Price Range
The monthly payment you qualify for affects the total price you can pay for a home. If monthly debts are too high, for example, you’ll likely qualify for a lower-priced home. The monthly payment is also affected by interest rates. Because interest is amortized over 30 years (on a 30-year mortgage), the amount of interest you pay is significant, even if you manage to score a lower rate.
Recommended: Home Loan Help Center
Types of Home Loans Available to $45K Households
When you’re looking for home loans, you’ll see these different types of mortgage loans available:
• FHA loans Loans backed by the Federal Housing Administration are geared toward buyers with low down payments, low credit scores, and other situations that require a lender to be more flexible.
• USDA loans United States Department of Agriculture loans are for those who live in rural areas. They offer zero down payment options and low interest rates.
• Conventional loans Conventional loans are loans that are not part of a government program, but they are backed by government-sponsored enterprises, Fannie Mae and Freddie Mac. They’re usually less expensive than FHA loans, but your application does need to meet certain guidelines to qualify for conventional financing.
• VA loans VA loans offer zero down payment options, the lowest interest rates on the market, and flexible credit requirements. If you qualify for a VA loan, you’ll likely want to go with this option.
The Takeaway
There’s no way around it — affording a home in today’s housing market is tough. If your $45,000 salary is all you have access to, you’ll need to save, improve your credit, research down payment assistance programs, enlist a partner, move to a less expensive area, or find other creative ways to afford a home. But don’t give up. It can be done. Your hard work will pay off with a mortgage for a home of your own soon.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
Is $45K a good salary for a single person?
A $45,000 salary for a single person is a good start. How good it feels to earn $45,000 will depend on the cost of living where you live and the friends and neighbors you’re surrounded by.
What is a comfortable income for a single person?
A comfortable income for a single person depends on your lifestyle and habits. The median income for a single person is $56,929, according to data from the U.S. Census. A single person in Cobb County, Georgia, would be able to cover their expenses for about $40,000 per year while the same person in New York City would need $53,342.
What is a liveable wage in 2023?
The Massachusetts Institute of Technology’s Living Wage Calculator takes into account your area, working household members, and number of children. For example, a single living in San Francisco has a living wage of $26.63. A household with three children where only one spouse works in St. George, Utah has a living wage of $44.99 per hour.
What salary is considered rich for a single person?
To be in the top 5% of earners, you would need a salary north of $234,342.
Photo credit: iStock/500
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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.