“I can’t believe I’m going to be 30!” I told my Dad at the beginning of the year. As I had said the same thing when I turned 20, I knew he would reassure me that 30 actually wasn’t that old.
“Nope, 30’s old,” he said.
Getting older doesn’t bother me; I actually embrace it and all the experiences that come along with it.
That’s also something I say just to make myself feel better.
But it’s working. And as I enter into a new decade of adulthood, I’ve been thinking about my financial situation. How much savings should I have at 30? Financially speaking, am I where a 30-year-old should be? What financial goals should I have at this age?
Let’s find out.
How’s My Retirement Plan Going?
Ah, the age-old financial question — how much should you save for retirement? It’s been covered pretty extensively, and ultimately, it’s about what works for you, as there are so many variables to consider. Especially with my fluctuating income, it’s hard to set standards based on how much I earn. For now, I am saving based on last year’s income, even though this year’s might not be as high. I’d rather err on the side of saving too much, unless the difference becomes drastic.
Related >> How much do you need to save for retirement Related >>Retirement savings: How much do you need? Related >>The most important factor in retirement savings
But I should be saving even more for my retirement for two big reasons: 1) As I mentioned, my income may vary, so I should save a lot while I can. 2) I don’t have an employer to match any of my contributions.
But before I decide how much more, how much savings should I have at 30?
Fidelity says you should have a year’s salary saved in retirement by age 35. By age 45, you should have three times your income. Judging by that, I should probably have about half of my annual income saved today.
Our friends at Financial Samurai have this to say about where you should be with your retirement savings in your 30s:
“Whatever the case may be, by the time you are 31, you need to have at least one year’s worth of living expenses covered.”
Going by Financial Samurai’s standard, I’m good. My living expenses are relatively low, so I’ve already reached that milestone. But by Fidelity’s standard — half a year’s salary — I’m almost, but not quite, there.
If I put in about $200 extra a month, I should have roughly half a year’s salary in my retirement by the end of the year. I need to increase my contributions, but I’m already maxing out my IRA. And I hate to admit it, but, based on last year’s income, I’m not even hitting the old 10 percent standard.
And here I thought I was doing well.
To my credit, however, last year was a good year income-wise. I may be over-estimating my savings, as this year I might not earn the same amount. But again, I’d rather save too much than too little.
It’s due time to consider additional retirement options; I should probably already have opened a self-employed 401(k). Thus, Financial resolution #1: Save additionally for my retirement and open a new account.
Where Should I Keep My Medium-Term Savings?
As my 30th birthday approaches, I also happen to be at a fork with my emergency fund. I have more than six months’ worth of living expenses saved and still have enough to pay taxes at the end of the year, since I’m self-employed.
But as I get older, there are certain milestones I should start saving up for. A house? Children? Another cat? Who knows! I’m still not quite sure if I want any of those things within the next five years. But I’ll probably make a decision within that time frame, and I’d like to be financially prepared either way. Now is the time to start saving for whatever the near future may hold.
My 20s were spent getting out of debt and building an emergency fund. I feel like 30 is an age at which I need to start being proactive with how I’m saving. As J.D. once wrote:
“If you hide your money under a rock, your investing skill isn’t particularly good. Although you might think you’re protecting what you’ve saved, you’re actually losing money to inflation.”
Related >> Is investing optional?
So I’ve been investing in my investment education. I’ve diversified my IRA, and my ROI is pretty average. As a novice, I’m OK with average for now. But while I continue my investment education and also decide what it is I want to save for, I plan on doing a couple of things.
Between three and five years is the time frame that I think I might need this money — maybe longer. While I’d like to open an index fund, I’m a little concerned about the risk, especially if I end up wanting the money in the semi-short term. Opening a CD is an appealing option, but the rates aren’t that much better than my savings account.
I can open one or the other, or I can split my savings between both. It’s a decision that I’m in the process of making, and I’ll let you know how it goes. In the meantime, the point is, at 30, it’s about time to start saving smartly. Financial resolution #2: Decide where I want to park my medium-term savings.
Preparing for and Safeguarding the Future
It’s time to make a risk-management checklist. Oh, that’s right. Robert Brokamp already did this for me! He’s great like that.
It’s time to visit some items on this list. That’smy third financial resolution: Prepare for and safeguard the future.
I won’t rehash Brokamp’s entire list. Some items won’t apply to me for a while; some I’ve already got covered. But there are a few things that I’ll need to work on as the future nears.
Asset Protection
While I already have renter’s and auto insurance, taking an inventory of possessions is a great idea, and umbrella insurance is something to consider, too, although I don’t have that many assets.
“Your personal tragedy will be less tragic if you can prove to the insurance company what you owned,” Brokamp writes.
Indeed. Years ago, I worked at a small engineering company. Our building caught on fire one morning and burned to the ground. I spent the next six months interviewing everyone at the company and taking an inventory of every single asset. Amid so many other frustrations, my boss told me that we’d likely have to prove much of what we were claiming.
Thus, part of my third resolution is to follow Brokamp’s advice by taking an inventory of my possessions and looking into risk-management checkpoints for the near future.
Preparing a Will
I hate to admit it, but this is something I haven’t thought about much, despite its importance. Preparing a will, along with other important documents Brokamp mentions, is another financial goal as I turn 30.
I got out of debt and saved some money in my 20s, and maybe that deserved a pat on the back. But as I enter the next decade, it’s time to enter the next era of my finances. I’ve only listed a few major financial resolutions here, but some of them already seem challenging, and there are probably more I’ll discover along the way.
On the bright side, not only will my finances be in better shape, but some of these goals might make for decent GRS topics. Personally, I’m interested to learn more about self-employed 401(k)s and where to put my medium-term savings.
Are there topics you’d like to see fleshed out? Do you have any additional input on what a 30-year-old’s financial goals should be?
One of my money resolutions is to switch banks. I’ve been a long-time customer of a big bank that, in recent years, has stood out among headlines that reveal sneaky and unethical business practices. That’s not the only reason I’m switching, but it does help me want to change. So, it has got me thinking bank vs. credit union?
Some people think credit unions aren’t terribly convenient — maybe they don’t have online banking, or maybe it’s hard to find an ATM when you’re traveling. But I’ve found that, despite the potential inconveniences, there are advantages to consider when it comes to a credit union. Here are a few things I’m keeping in mind as I make my decision.
Interest Rates
The main draw I’ve often heard about credit unions is they offer lower interest rates on loans and higher Datatrac analyzed the average interest rate differences between credit unions and banks. When it came to car loans, banks’ interest rates were about two percent higher. When it came to mortgages, rates were very similar.
Savings yields
The National Credit Union Administration also regularly analyzes the average rates of credit unions and banks. Their latest data (June 2013) found that the average “regular savings” rate for a credit union was 0.14 percent. The national average for banks was 0.13 percent.
But when it comes to choosing what works for you, you’re probably less interested in average and more interested in best. According to Datatrac, the “bank high” savings rate is 1.06 percent. The credit union high is 3.00 percent, which is awesome, but not necessarily accessible.
For example, I researched the credit unions in my community that I might be approved to join. On the high end, those credit unions offered an APY of 0.25 percent. My current bank offers 0.50 percent, and the bank I’m considering offers 0.85 percent. So while credit unions have the overall reputation of having higher interest rates, I guess it really depends on what’s available to you in your community. But with a credit union high of 3 percent APY, it’s definitely worth looking into.
If you’re getting a car loan, it’s probably best to go with a credit union. But I’m not a big fan of car loans in the first place (though I understand people have their reasons), nor do I think I’ll need one anytime soon. At this point in my life, I’m only concerned with interest rates when it comes to saving. On average, credit unions have better rates, but I’m not sure I have access to the high rates mentioned on these reports.
Related >> Why I plan on driving my car into the ground
Fees
Credit unions are known for having low to no fees on their accounts. And while they may offer free checking and even checking with interest, I’ve come across a couple of banks that offer the same thing. Many credit unions require no minimum to open; the bank I’m considering doesn’t require a minimum deposit either.
Related >> Checking Accounts
What’s more, according to a July 2013 article from the Washington Post, credit unions have been hiking up their overdraft fees faster than banks.
“The report shows that banks have held the median overdraft charge at $30 a transaction for the past four years, while credit unions have upped their price from $25 to $28 a transaction in the past two years.”
Related >> Getting Over the Overdraft: How I Started Saving
On the other hand, “fees are still lower on average at credit unions as of the first three months of 2013.” I’m not planning on using overdraft protection, so this doesn’t really affect me, but I thought it worth noting. An article from The Street also confirms the misunderstood stereotype that credit unions = no fees.
“Unfortunately, many who make the switch assume mistakenly that just because they’re banking with a credit union, they’re not going to be charged fees. The truth is that credit union members are just as vulnerable to fees as bank customers — a fact that is rarely shared or acknowledged.”
Most people with credit unions love them and attest that they don’t pay fees. And I’m not saying most banks don’t assess ridiculous fees, but it does seem like the whole “no fee” thing with credit unions might be a little overrated. I’m not knocking credit unions; I’m just saying, if I switch, I don’t think fees will play a huge part in my decision.
Business Model
Structure
Here’s where credit unions win, by far — the way they’re structured.
Credit unions have a reputation of being more personal and focused on community, and there’s a reason for that. When you open an account with a credit union, you become a shareholder. In fact, the operators of credit unions are members themselves. As Michele Lerner explained in a Get Rich Slowly question:
“First, unlike banks, credit unions are financial membership organizations. You don’t open an account at a credit union, you become a member and use your deposits to buy shares in the business.”
Credit unions are also community-focused because a lot of their members belong to a similar group. My old company, for example, had a credit union. My university had a credit union. In Los Angeles, there are a lot of entertainment-industry-related credit unions.
Theoretically, credit unions are private cooperatives that are owned and operated by their own members, the advantage being that local money stays within the community. Many people like the idea of that and, according to credit union members, it usually translates to a better “customer” experience.
Profit
While banks want to make money and appeal to investors, credit unions are not-for-profit, and their investors are their members. Any profit made from a credit union is supposedly returned to its members in the form of low interest rates or lower fees (although there’s been some recent controversy over the industry overusing these profits on advocacy efforts).
Overall, though, a non-profit structure usually translates to: a) not feeling like your financial institution is trying to take advantage of you, and; b) not seeing your financial institution’s name next to the words “crooked” and “discrimination.”
While they’re certainly not immune to questionable practices, the structure of a credit union seems to provide a better overall experience, and most credit union members attest to that.
Overall, I suppose it depends on what you’re looking for in a financial institution. Both options — credit union or bank — have their advantages and disadvantages. There’s also the long term to think about. You might feel that, in the long term, the structure of a credit union may serve you better. In the long term, rates may be significantly better. Either way, in making a decision, there are a handful of things to consider. Loans, rates, business model, fees and convenience are all factors that could affect one’s decision.
I’m still deciding, so I’d like to read your thoughts. Do you use a credit union or a bank, and what are some benefits and drawbacks of each?
Do you want to live a great life? Do you feel like your life isn’t going the way you want?
Maybe your plan isn’t working, or you just want a change because anything is better than how things are currently going.
Or, maybe you just want to improve your life even more this year!
No matter how you’re feeling, I believe that everyone is in charge of their own destiny and that everyone can learn how to live a great life.
If you feel things are not going the way you want them to go, then change it! You can improve your life and how you perceive it by taking part in different actions.
For that reason, I’ve packed this post with my best and most actionable tips so that you can live a great life, and there are some new ones that are sure to make this new year your best ever. Enjoy, and I hope this year is a great one for everyone.
Related reads:
How to live a great life in 2023!
1. Reach your goals in 2023.
To make it a great year, you’ll want to set goals so that you can reach your dreams. Those who set goals are much more likely to be successful than those who do not.
To reach your goals, you’ll want to:
Review the previous year along with your previous goals and objectives.
Make sure your goal is SMART.
Write down your goals and objectives.
Create a plan to reach your life goals.
Break your goal apart into smaller goals.
Keep track of your goal setting progress and make changes (if needed).
Find small ways to stick to your goal.
Find ways to motivate yourself when setting goals.
Make reaching your goal a friendly competition.
Read further at The Best Way To Set Goals And Reach Success.
2. Smile more.
Smiling is contagious and is very important if you want to live a great life!
Studies have even proven that smiling can improve your mood, even if it’s a fake smile.
Smile at the next person you pass, smile when you’re talking on the phone, smile when your loved one comes home, smile in an interview, and more.
Related: How To Better Yourself – 23 Challenges That Will Change Your Life
3. Don’t be afraid of what people think.
I used to really care about what other people thought of me, but I’ve been able to let go of that and now I couldn’t be happier. This has really helped me learn how to live a great life.
You shouldn’t let the opinions of others affect you, drag you down, control you, and so on. Like I always say “Who cares!?”
Why should the opinions of others matter to you? And, because everyone is different, all that should matter is what is right for you.
Related content: Learn How To Set Resolutions — Make This Year The Best Yet!
4. Spend less time watching TV.
I bring this up a lot on Making Sense of Cents, but this statistic is just crazy-
the average person watches around 35 hours of TV a week.
35 HOURS!
Our minds are greatly influenced by what we see on TV. Plus, watching TV can be a big time waster and can be detrimental if you want to live a great life.
Instead of turning on the TV the next time you are bored or looking for something to do, you may want to do something more worthwhile, such as working out, spending time with friends and family, reading a book, and so on.
5. Be more confident.
A lack of confidence may:
Prevent someone from believing in themselves.
Lead to someone being too shy to do what they want or need.
Force someone to do things they hate.
Cause someone to ruin a meeting, job possibility, and so on.
Lead to unhappiness.
On the flip side, confidence can open many doors for you.
It can lead to getting the job you want, making more money, reaching your dreams, meeting new people, networking, traveling the world, and more.
Read more at Be More Confident And Get What You Want In Life.
6. Be thankful for what you have.
The next time something negative is bringing you down, I suggest you try to remember all of the positive and good in your life. You already live a great life, you just need to remember that.
This is the power of positive thinking at its best.
You can be thankful for your family, friends, job, a past experience, opportunities, and more.
Thinking about everything you are thankful for can make something negative seem very trivial. You may even laugh at yourself for being so negative!
7. Start investing.
I want you to start investing if you haven’t done so yet.
You want to invest your money so that you can:
Retire one day.
Prepare for unexpected events in the future.
Allow your money to grow over time.
Read more at The 6 Steps To Take To Invest Your First Dollar – Yes, It’s Really This Easy!
8. Be kind to others.
You should always be kind to others. This can help both you and others live a great life. Being kind can open your mind, help you stop dwelling on negative things in life, brighten someone’s day, and more.
You can be kind to others by doing things such as:
Say hello to every person you walk by today.
Open doors for others.
Smile at strangers.
Help someone with their groceries.
Volunteer somewhere.
Related post: 50+ Random Acts of Kindness.
9. Look for ways to save more money.
Looking for ways to save more money may allow you to pay off your debt quicker, improve your financial habits, help you reach your dream sooner, and more.
Plus, there are many, many different ways to save money. You don’t need to sacrifice your favorite things or live an unhappy life in order to save money.
It’s all about being realistic and finding a good balance between saving and spending.
Read more at 30+ Ways To Save Money Each Month.
10. Take a risk.
Have you ever thought about doing something particularly risky but were too afraid to go for it?
Well, it may be your year! Or, at least maybe you can start planning to take that risk?
Doing something risky every so often can get your heart beating and your adrenaline rushing. This can really make you feel alive and like you are in charge of your life.
11. Realize that it’s okay to fail.
If you’re taking risks or trying new things, there is a chance that you may fail.
But, that’s completely okay!
You won’t know if something will work or not unless you try it, and sometimes failure is just a part of the learning process.
Part of living a great life is failing every now and then. Accept that fate now and you’ll be better prepared when it happens.
12. Create a budget.
The average family carries a lot of financial stress. Most people have student loans, credit card debt, a mortgage, car loans, and sometimes other forms of debt.
However, not many people have a budget.
In fact, 68% of households in the U.S. do not prepare a budget.
Budgeting can help you take control of your finances, which can then help reduce stress and allow you to reach your dreams. Having a budget is crucial if you want to live a great life.
Read more at The Complete Budgeting Guide: How To Create A Budget That Works.
13. Say yes.
If you often find that you’re hiding from everyone and you feel like you are stuck, you may want to try branching out and saying yes more often.
Saying yes can open you up to more situations, help you grow as a person, and so on.
14. Say no.
If you say yes to everything, but you are ready to pull your hair out, then you may want to start saying no. No one wants to be walked on or spread too thin, and you also don’t want to be holding yourself back from the things that you truly want to do in life.
Saying no may allow you to have more time to focus on what you truly want from life.
15. Don’t let life pass you by.
It can be really easy to let life pass you by. Before you know it, years or even decades may be gone.
Too many people have the mindset of “Oh, in 10 years life will be so much better because of such and such.” And then, they just let their lives go by without ever thinking about the present.
Well, what about now?!
10 years is a long time!
Reaching a goal is great, but you should always make sure you are living life to the fullest (on a budget, of course).
16. Cherish moments with loved ones.
You should never take a moment for granted with those that you love. This will sound very doom and gloom, but you just never know what may happen to you or them.
Plus, spending time with your loved ones is always a great time, so why not just do it more?!
17. Pay off debt.
Paying off your debt can lessen your stress levels, allow you to put more money towards something else (such as retirement), stop paying interest fees, and more.
Debt can hold a person back significantly, and by paying off your debt you may be able to live the life that you’ve always wanted.
Let’s make this the year that we finally get rid of our debt or at least work our way towards eliminating it!
Read more at How To Eliminate Your Debt.
18. Exercise more.
Whenever I’m feeling a little stressed out, tired, or even grumpy, I try to fit in a workout. I know that even a small workout is better than none.
Exercising is great and it can improve your life because it can make you healthier all around. You will feel more confident, your mind will be clearer, you will be able to better cope with stress, and more.
19. Increase your credit score.
If you need a loan for anything in the future, you can do easy things to increase your credit score. Watch your utilization rate on your credit cards, pay your bills on time, watch the amount of hard inquiries on your credit report, and so on.
Your credit score is important because it can affect your interest rate and whether or not you will get approved for a loan.
Just a few percentage points can mean the difference of hundreds of dollars each month.
That means you can wind up saving THOUSANDS each year just by increasing your credit score. You can check your credit score for free with Credit Sesame.
20. Don’t keep up with the Joneses.
Whether you are five years old and want that new toy everyone is playing with, or if you are 50 years old and are feeling the need to upgrade your house, car, etc., everyone has experienced wanting to keep up with someone else.
The problem with this is that keeping up with the Joneses can actually make you broke.
When trying to keep up with the Joneses, you might spend money you do not have. You might put expenses on credit cards to (in a pretend world) “afford” things. You might buy things that you do not care about. The problems can go on and on.
This can then lead to an excessive amount of debt and potentially set someone back years with their financial goals, if not decades.
21. Do what YOU want to do.
What makes you happy, excited, joyful, and motivated? That’s what you should be doing with your life (as long as it’s legal)!
Stop thinking about what other people want you to do and start listening to your heart. Who cares about what others think? If you spend all your time thinking about others, you will just be wasting a ton of time!
If you want to live a life of adventure – Go for it.
If you want to start a family – Start planning one.
If you want a better job – Get one.
If you want to change the world – Do it.
22. Read as much as you can.
I’ll admit it, I don’t read as many books as I would like to.
I’m so focused on reading about personal finance, but I know I need to occasionally take a break and do some reading for pleasure.
Reading is great for many reasons, such as:
Providing knowledge.
Improving your memory.
Opening your mind.
Bringing out your creative side.
It is affordable entertainment.
And more!
23. Think positively.
I say this often, and I believe it.
Thinking positively can greatly improve your life and your outlook on life. Being positive can help motivate you, it can help you to not waste time on regret, and more.
Related article: Why I Believe Being Positive Can Change Your Financial Situation And Your Life.
24. Don’t waste time on being negative.
You are wasting your time when you are being negative.
Instead of wasting your energy on things like dwelling on regret and/or gossiping, you can be more productive by using this time for things that actually matter.
By being more positive, you will be able to better simplify your life.
25. Find free forms of entertainment.
Someone once told me how expensive it was to have fun. They were telling me about all of their debt and everything that goes along with it, then they also told me that their monthly “fun” budget was around $500.
Uhhh what?! $500? A month?!
If you are trying to get rid of high-interest rate debt, I can’t think of any reason for why you should be spending $500 a month to have fun.
There are many ways to have fun for cheap. Check out How To Have Frugal Fun for some of my ideas.
26. Stop letting money control you.
If you want to gain control of your life and make it a great year, then you need to gain control of your money.
This means you need to stop worrying about all of the things that are holding you back. Instead, create an action plan so that the littlest things do not tear you down or stress you out.
27. Get enough sleep each night.
According to the National Sleep Foundation, the average person needs around 7.5 hours of sleep in order to “function at their best.” However, the average person actually only sleeps around 6.5 hours.
Lack of sleep, according to HealthLine, can lead to issues such as:
Impaired brain activity
Memory problems
Moodiness
Depression
Cold and Flu
Type 2 Diabetes
Weight gain
High blood pressure
Heart disease
Due to this, you should aim for 7-8 hours of sleep every night.
28. Find something good in a negative situation.
There may even be some good in a bad experience, even though it can be hard to think about the positive while you are experiencing something negative.
Through the power of positive thinking, you can use a bad experience to learn something new about yourself, to realize you made a mistake, to come up with a new plan you never thought of before, and more.
Taking the negative and turning it into a learning experience can help prevent a negative situation from happening again. Or, maybe next time you’ll be more prepared!
29. Travel to a random place.
There are many wonderful places in the world. Traveling to a random place can help improve your confidence, open you up to new experiences, and may even make you a little uncomfortable- and sometimes that’s okay.
30. Create a bucket list.
If you don’t have a bucket list, I recommend creating one now! In case you are unaware, a bucket list is where you list all of the major goals you want to meet, places you want to visit, and things you want to do in your life.
Creating a bucket list can give you the motivation you need to work harder towards your dreams, it can give you a sense of direction, and a great feeling of fulfillment as you complete each amazing thing you want to do.
31. Welcome the unknown.
Some people like to ignore the unknown because they are afraid of it. However, you’ll never know what your future holds unless you try new things and welcome different experiences.
When looking forward, you should make a realistic plan for what may happen once you start taking steps to reach your goal. This may make the whole thing much more relaxing and less stressful because you will be more prepared for the unknown.
For example, if you want to leave your job for something else but are afraid of what may happen, one thing you might want to do is to make sure you have a well-funded emergency fund. This way, if it takes you a little longer to find your dream job or dream life, your emergency fund will be there to help ease some of the stress.
32. Be open to new things and tackle your fears.
When was the last time you did something new? So many people live inside their comfort zone when they actually need to branch out every now and then.
Yes, stepping outside of your box can be tough, but what if it completely opened your eyes and changed your whole outlook on life? Wouldn’t that be amazing?
If you want to learn how to live life to the fullest, this is something you need to do every now and then. You could even give yourself a goal to try something new each day, each week, or each month.
33. Become more organized.
Being unorganized can waste a significant amount of your time. It leads to late fees, stress, lost items, and more.
Here are some surprising statistics I found from Simply Orderly about being unorganized:
The average person spends 12 days per year looking for things they can’t find.
Every day, the average office worker spends 1.5 hours looking for things.
In a recent survey, 55% of consumers stated they would save anywhere from 16 to 60 minutes a day if they were organized.
23% of people pay bills late and have to pay late fees because they are unable to find their bills.
34. Be open minded to live a great life.
Being open minded is a great quality. There are billions of people in this world and everyone is different, so instead of judging others we should be more open minded.
And, everyone can stand to be a little more open minded.
Being open minded can help you accept changes, love others, be optimistic, learn from others, and most of all, it’s relaxing. Instead of worrying about what everyone else is doing, you can relax, have less stress, and just accept those around you.
35. Finally get rid of cable.
The average monthly cable bill is over $100. The average cable bill is around $200 a month.
You can read more about cutting cable here and how to save money by doing this. I recommend getting a digital antenna so that you can receive local channels for free!
We don’t pay for any form of TV (not even Netflix!), and we LOVE it.
36. Drink more water to live a great life.
According to Lifehacker, the average person should drink around 9 to 13 cups of water per day. This is just a baseline, though, as if you exercise or are in hot weather, then you should consume more.
However, not many people get anywhere near this amount of water.
Drinking water can help you lose weight, perform better, be happier, prevent headaches, help your skin, and is a must for your body to survive.
37. Make more money.
Here on Making Sense of Cents, I spend a lot of time discussing extra income, side hustles, side income, and how to make money online. I believe that earning extra income can completely change your life in a positive way. You can stop living paycheck to paycheck, pay off your debt, and more, all by earning extra money.
In fact, because of extra income and my blog, I was able to pay off $38,000 in student loans within 7 months, I was able to leave my day job in order to pursue my passion, travel full-time, and more!
Related blog posts:
38. Spend less time on social media.
The average person spends many, many hours on social media each week.
Between Pinterest, Facebook, Twitter, Instagram, Snapchat, and many others it can be quite easy to waste your entire day.
If you find that you are spending too much time on social media and that it is negatively impacting you, you may want to shut down the social media accounts that you are spending too much time on. You can even create a time block so you cannot access your accounts during certain periods of the day, and so on.
39. Declutter and downsize.
Decluttering and downsizing can help you:
To save money. In some cases, a bigger home can cost more due to higher utility bills, more clutter being bought, higher insurance, more maintenance and repairs needed, higher purchasing price, etc.
To have less clutter. The bigger your home, the more likely you’ll have empty rooms that you feel the need to put stuff in. Now that we live in an RV, we are much more mindful of what we buy. We think about every purchase in terms of weight, size, where we can store it, and more.
To spend less time on maintenance and repairs. If all other factors between two homes are the same (age, location, etc.), a bigger home is more likely to take up more of your time and money due to more things breaking.
To spend less time cleaning. A larger home is going to take a lot more time to clean than a smaller one.
40. Have regular family money meetings.
Talking about money and conducting regular budget meetings is an important task for every family and serious relationship to take part in. A family who has regular money talks and budget meetings is more likely to be financially successful and happier than a family that doesn’t.
Regular money meetings can lead to better communication between family members, a more unified financial goal, family members being more involved and motivated, and more.
Read more at Family Budget Meetings – Yes, You Need To Have Them.
41. Keep a journal.
While I don’t have a journal, I do have this blog, which acts as a journal in a way. Keeping a journal can help you reflect on your past, and it also allows you to see the progress you are making towards your goals and dreams.
Plus, spilling your heart out every so often is great for the mind and soul.
Related tip: If you’re looking for a life planner, I highly recommend checking out Erin Condren and looking at their life planners and monthly planners. This can be a great way to stay motivated so that you can reach your dream life!
42. Don’t be afraid to be successful.
When some people become successful and reach their goals, they occasionally start feeling guilty.
Yes, I know, this might seem weird. However, I understand this.
Sometimes I really dislike telling my friends and family how great life is and how much I love my business. I often feel guilty, but I just need to remember that a mixture of luck and hard work led me to where I am. Everyone has their down points, and I had them as well.
You shouldn’t be afraid to talk about your accomplishments, and you shouldn’t ever be ashamed of your success.
43. Sit silently.
When was the last time you just sat down in complete silence with no distractions? For the average person, this is probably a rare occurrence.
Sitting silently can help you reflect on your life and what’s going on in the world around you. It can also help you relax, destress, and clear your mind.
44. Have an emergency fund.
An emergency fund is something that I believe everyone should have. However, according to a report by Bankrate.com, 26% of Americans have no emergency fund whatsoever.
This same report stated that only 40% of families have enough in savings to cover three months of expenses, with an even lower percentage having the recommended six months worth of savings.
This is frightening to me, as having an emergency fund can really help you get through tough parts of your life.
An emergency fund can help you if you lose your job, if your hours are cut back, if you have an unexpected expense, and so on.
Read more at Everything You Need To Know About Emergency Funds.
45. Stay motivated.
Even with how much I love saving money, every now and then it becomes easy to get unmotivated and want to SPEND ALL THE MONEY!
I’m sure I’m not alone either.
While many choose to live a frugal life, it’s not always easy. Some have large amounts of debt to pay off, others find it hard to stick to a budget, and more.
Finding financial motivators will help you continue to work hard towards your goal, even when it seems impossible. Without motivation, one might give up on a financial goal quite easily. This is why it’s so important to learn how to stay motivated.
Read more at Paying Off Debt And Budgeting: Tricks For Staying Motivated.
46. Stop being afraid of your past.
Just because you may have failed at something in the past, this should not prevent you from aiming for your goals. I know people who have completely given up with reaching for hard goals because they weren’t successful in the past. However, that’s a horrible mindset to have.
If you have failed in the past, then you should use those mistakes as learning tools for the future.
What will you do to live an amazing life? What tips on how to live a great life do you have to share with us?
Save more, spend smarter, and make your money go further
It may not come as a big surprise since we all know that Mint users are financially savvy – but saving for a big purchase and paying off debt reign supreme for Mint users when it comes to their 2015 financial resolutions!
In a recent Mint survey, millennials revealed that their top financial stressor included debt (think student loans), saving for retirement, and over spending – while respondents age 36+ were most stressed out by not having enough savings for the future (you’re not alone)!
We hope the takeaways from the Mint user survey below will help encourage you to be good with your money and keep working towards your 2015 financial goals all year long!
Mint.com 2015 Survey Results:
In 2015, my primary financial goal is:
Saving for a big purchase (house, car, etc.): 35%
Paying off debt: 34%
Paying off student loans – 14.16%
Paying off credit card debt – 19.06%
Saving for an emergency fund – 22.20%
Saving for a vacation – 9.62%
How much do I save?
93% of respondents are saving at least once a year with 83% of all respondents putting money away every paycheck
What do I spend my money on?
59% of all respondents by far the biggest expenditure every month was housing
28% of respondents said their highest expenditure is food and beverage
What I find most stressful about finances:
The overall trend of financial stressors among respondents age 36+ was not having enough money or enough savings for the future
Interesting, a number of respondents over the age of 36 are still paying off student loan debt
Among millennials – the responses seem to vary including not making enough money, debt (including student loans), saving for retirement, over spending, and not having enough money to afford the things they want
Do the results above ring true for you? Let us know in the comments below!
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Already having a tough time sticking to your New Year’s financial goal to save more and spend less in 2015?
Well, we are here to help! We’re partnering with some smart and savvy consumer financial experts and Mint partners for a live Twitter chat to discuss some of the biggest spending trends and pitfalls and address how you can stick you your financial resolutions. After all, February is the new January.
So join us on Wednesday, February 4th at 12pm PT/ 3pm ET for a live, hour-long #HowWeSpend Twitter chat to learn more about how to make smarter spending decisions this year.
Host
@Mint
Participants
Mint’s own (@hperez), financial educator & #1 bestselling author (@TheBudgetnista), CNBC’s senior personal finance correspondent (@sharon_epperson), money-saving expert and Kiplinger.com columnist (@CHLebedinsky), bill pay tool and Mint partner (@MintBills), trusted name in consumer credit and resource for personal finance advice (@EFXFinanceBlog) and others.
How to participate
Make sure you follow Mint (@Mint)on Twitter so you can jump right in. Use the hashtag #HowWeSpend to search and select the “All” search option to follow the chat in real time.
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You may have shook your head when you first read this title. However, hear me out and continue reading to learn more about the habits of millionaires! The rich are rich for a reason- most of them know how to manage their money correctly.
Sure, there are stories about rich people who spend their money like crazy and end up in bankruptcy.
But, surprisingly, the average millionaire is frugal, and they know how to manage their money well.
Related posts:
Here are some examples of millionaires and billionaires who are frugal:
Warren Buffett lives in a house that he bought in 1958 for around $30,000.
Mark Zuckerberg drives an Acura.
John Caudwell (worth $2.7 billion) rides his bike 14 miles to work every day and even cuts his own hair.
Jim C. Walton (son of Walmart founder) drives an old truck with no air conditioning.
I have personally met several retirees who have millions and live in an RV. RVing is a ton of fun, but a lot of people just assume that RVers have no money. If only they actually knew! We made one friend while RVing who actually has a nice house and millions in the bank, but he lives in an RV that is worth less than $20,000. You never would have guessed!
If you want to learn how to become rich (whatever amount of money or lifestyle that means to you), continue reading in order to learn more about the money management habits of millionaires.
They wear the same outfits.
President Barack Obama once said, “You’ll see I wear only gray or blue suits. I’m trying to pare down decisions. I don’t want to make decisions about what I’m eating or wearing. Because I have too many other decisions to make.”
Many other successful people feel the same way, including Mark Zuckerberg, the late Steve Jobs, Albert Einstein, and many others.
The average family spends $1,700 a year on clothing, which is a lot of money. Plus, the average person wastes anywhere from 10 to 30 minutes a day when deciding what to wear!
Having multiple outfits can lead to wasting time deciding what to wear, as well as wasting money.
They have more than one source of income.
A lot of millionaires have many sources of income, and this is one of the many great habits of millionaires.
They may have a day job, a business, rental properties, dividend income, and more. This allows them to bring in more money.
They also do this because millionaires know that one source of income may not last forever, and they are also able to lessen their risk by having multiple income streams.
Read about some of the many ways to make money at 75+ Ways To Make Extra Money.
They have long-term goals.
Successful people and millionaires are known to set goals, especially long-term ones. They are extremely determined and without goals it would be hard to be successful.
Setting goals is important because without a goal, how do you know where you’re heading? Goals can help keep you motivated and striving for your best.
Please keep this quote from Statistic Brain in mind:
People who explicitly make resolutions are 10 times more likely to attain their goals than people who don’t explicitly make resolutions.
And, it’s true!
They have a budget.
Yes, even millionaires have budgets! Not all of them have a traditional budget, but trust me, they know where their money is going and they are watching their cash flow closely.
Tracking your money and knowing where it is going can help you see where you’re wasting money and what spending habits need to be changed.
They educate themselves on financial matters.
When millionaires are unsure of a financial decision or implication, they either seek out financial advice from an expert and/or they seek out the knowledge they need to know by educating themselves.
Millionaires are always learning.
They read numerous books, attend classes, read the newspaper, and more.
They know the value of experts.
Continuing from the previous habit, the rich are interested in educating themselves, but they also know when to hire help.
Knowing when to get help from accountants, lawyers, experts, and more can help them take advantage of confusing laws, areas where they aren’t experts, etc. This can prevent wasteful spending, bad investments, and unnecessary legal issues.
This helps them save time as well as money!
They don’t fall for lifestyle inflation.
Millionaires tend to live below their means. Yes, many of them still spend money extravagantly, but many aren’t living paycheck to paycheck in order to do so.
Many millionaires buy items used, they drive “normal” cars like Toyotas, and they aren’t trying to keep up with the Joneses.
This is drastically different from those who aren’t millionaires.
Here are some money statistics that may scare you:
68% of people live paycheck to paycheck.
26% have no emergency savings.
The average household has $7,283 in credit card debt.
The average monthly new car payment is around $480.
Many people try to keep up with others and fall for lifestyle inflation, which can prevent you from being good with money.
When trying to keep up with the Joneses, you might spend money you do not have. You might put expenses on credit cards so that you can (in a pretend world) “afford” things. You might buy things that you do not care about. The problems can go on and on.
They pay themselves first.
Millionaires pay themselves first.
Sure, they have more money to work with, but they always make sure to save money before spending it.
Paying yourself first is when you put money into savings as soon as you receive your paycheck. Doing this may allow you to save more money and cut back on unneeded spending, and it can help you prepare for the future.
They invest.
Millionaires make their money work for them, and that is how they stay rich.
Investing is important because it means you are making your money work for you. If you aren’t investing, your money is just sitting there.
This is important to note because $100 today will not be worth $100 in the future if you just let it sit under a mattress or in a checking account. However, if you invest, then you can actually turn your $100 into something more. When you invest, your money is working for you and hopefully earning you income.
For example: If you put $1,000 into a retirement account that has an annual 8% return, 40 years later that would turn into $21,724. If you started with that same $1,000 and put an extra $1,000 in it for the next 40 years at an annual 8% return, that would then turn into $301,505. If you started with $10,000 and put an extra $10,000 in it for the next 40 years at an annual 8% return, that would then turn into $3,015,055.
Learn more at The 6 Steps To Take To Invest Your First Dollar – Yes, It’s Really This Easy!
They still use coupons and haggle.
Yes, one of the many habits of millionaires is that they tend to still use coupons and even negotiate in order to get the best pricing!
What other habits of millionaires am I missing? Share in the comments below!
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If you’ve applied for credit recently – maybe for a store card over the holidays – you may have come across the term “inquiry.” Even if you’re not familiar with credit inquiries, it’s critical to understand what they are, how different ones work, and what they mean. Fortunately, we have answers to your credit-inquiry questions here.
What’s a credit inquiry?
A credit inquiry is a credit check. It’s a request to view your credit by lenders — retailers, financial institutions and others who are legally allowed to see your credit report.
Types of inquiries: hard and soft.
A hard inquiry happens when a potential lender looks at your credit report and uses that information to decide whether to offer you credit and what the terms of the offer might be. Think of hard inquiries as the types of credit checks that happen when you apply for credit, whether it be a credit card, mortgage, car loan or other type of financing. Hard inquiries must be made with your permission and in connection with specific transactions.
A soft inquiry, on the other hand, is more of a routine credit check that doesn’t need to be done with your permission. Importantly, soft inquiries won’t show up on the credit reports potential lenders request to evaluate your creditworthiness. Soft inquiries can happen for a variety of reasons. One example is when potential lenders check your credit report to determine whether to make you eligible for any pre-approved offers. Another happens when one of your existing creditors checks your credit to make sure you’re still creditworthy. A soft inquiry is also triggered every time you check your credit.
One other thing to note: if you would like to see credit reports listing all your inquiries, soft and hard, check your free annual credit reports at AnnualCreditReport.com.
Why inquiries matter.
The first thing you should know is the kinds of credit reports potential lenders see will only list hard inquiries, not soft ones. In that sense, hard inquiries are the ones that “count.” That’s because credit scoring models usually factor in the number of hard inquiries you have when they’re calculating your credit score. Generally, credit scoring models tend to associate a high number of hard inquiries, especially if they’re made within a relatively short period of time, with a high credit risk. It’s important to watch the number of hard inquiries you make because too many of them may affect your ability to get credit at the lowest-available rates.
Do inquiries remain on your credit report forever?
In short, no. They are automatically removed 2 years from the date they first show up on your credit report. As with other aspects of credit, the more time that passes, the less effect hard inquiries may have.
Loan shopping and inquiries.
Let’s say you’re shopping for a mortgage or car loan and want to find one with a good rate and other terms that work best for you. After all, especially with big purchases, you want to make sure you get the best financing you can. But every time you apply for credit, a hard inquiry happens. Does that mean you shouldn’t shop around for a loan?
Fortunately, no. Credit scoring models tend to account for this kind of activity. Generally, credit scoring will count several inquiries made over a relatively short period of time, like 45 days, as one single inquiry. That way, you won’t necessarily get penalized for causing several hard inquiries while shopping for one loan.
Bottom line.
Inquiries are a key, and often misunderstood, part of credit. But they aren’t everything. While you want to pay attention to how frequently you apply for credit, credit health encompasses much more than just hard inquiries. Keep an eye on your hard inquiries, but don’t lose sleep over them, especially if you’re paying your bills on time, not using too much of your available credit, and otherwise practicing healthy credit habits. In other words, keeping your hard inquiries in check should be just part of a healthy-credit new year’s resolution!
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How are you doing on your New Year’s resolutions and goals? Are you still on track? Many take no action and expect different results. Why do we keep doing the same things over and over and “hope” things will mysteriously “change”? Hope and change are more than words. They can win elections, but the proof is in the results. Are you getting the financial results you desire?
As finances affect almost every area of our lives, stewardship should be one of the areas that capture our greatest attention in the New Year. Yet as a portfolio manager and financial advisor for the past 16 years, I am finding this is the area most people neglect. They get “too busy” or “uninterested” or even “unsure” how to plan ahead.
With the troubled economy, many financial problems that were covered over during the prosperous times have now been exposed. It’s not difficult to survive when jobs are plentiful and credit is easy! However in today’s economy smart money moves are a hot commodity!
Now as important as it is to make wise decisions with your money, it is just as important to avoid the bad money mistakes. These money mistakes are what cause people to go deeper in debt, not save enough for retirement, and lose money in the stock market to name a few.
In 2011, this is your year to make things right! Out with the old and in with the new. If you’ve already started saving for your future, this is the year to supercharge your savings. If you haven’t started, well this is the year to start! In order to plan ahead, we have to make sure we have a plan to combat the four deadly forces that wreak havoc in our finances.
To Win The Battle, We Need A Game Plan!
To win at the money game, you will need to be aware of the dangers that lie ahead. You can never be bullet proof, but having plans in place can soften the blows that are sure to come. Let’s look at four problem areas that have the potential to blow up a financial plan.
Problem Area # 1: Ignoring Inflation
Inflation erodes your future purchasing power over time. $100,000 in 2011 will not buy less products and services in 2012, never mind twenty years from now Are equities the best investment choice during inflationary periods of the market? Quite often, the answer is “no.”
What about bonds? Think again! These usually do not do well either. So what’s the magic answer? When inflation appears, the assets that tend to perform the best are alternative investments such as private equity funds, real estate investment trusts and commodities. These may not only help you diversify your portfolio, but also help you fight the effects of inflation on your invested assets.
Interest rates are starting to rise and I believe hyper-inflation (high inflation) is right around the corner. As you invest, you’ve got to recognize the impact that inflation can have on your investments and plan accordingly.
We Are Planning Ahead Right Now!
At FaithBasedInvestor.com, we are loading up on investments that do well during inflationary periods:
• Precious metals: We will continue to hold investments that have inflation protection. Gold and silver should continue to be hot commodities. • Agriculture: We will continue holding companies and investments that have exposure to the food industries. • Energy: We will continue to hold and look for opportunities in the energy sector: coal, oil, and alternative energy solutions. • Foreign Currencies: We will diversify our domestic exposure (US Dollars) by using foreign currencies like the Yen, Swiss Franc, and Aussie Dollar. • Dividend Stocks: We will look to hold and seek out companies paying dividends. This will help us with cash flow and outpacing inflation. • Inflation-Protected Bonds: We will continue to hold U.S. and foreign bonds that have inflation protection.
Problem Area # 2: Ignoring Investment Fees
Investment fees represent the second wealth killer. These fees can add up to thousands or even millions of dollars over decades of compounding. 401(k) management and administration fees, mutual fund fees, and annuity expenses wipe out investor’s wealth each and every year. The Department of Labor recently showed that even a 1% increase in your fees can wipe out as much as 28% of the value of your 401(k) over time. Also look at your mutual funds. The average cost of most funds is north of 3% annually! (1.6% average expense ratio and 1.4% SAI Fees) For more on fees check out this article on 4 reasons why mutual funds are lousy investments.
Problem Area #3: Ignoring Taxes
The big appeal of 401(k)’s and IRAs is the ability to defer taxes, right? However, with the United States’ $14 trillion worth of debt, which likely direction do you anticipate future tax rates will go? 401(k)s, IRAs, and annuities are ticking tax bombs! The biggest problem with deferring taxes is this:
Let’s say you are successful managing your investments and grow a HUGE nest egg. Congratulations, right? Yes, it’s great to have more money! However, at retirement age when you pull this money out, all that growth and your tax deferred contributions now become fully taxable ordinary income when withdrawn. Say you save $5,000 and it grows to $100,000. The entire $100,000 is fully taxable. At a 40% tax rate, that’s $40,000 in taxes! The government allowed you the initial tax deduction of $5,000 for $40,000 or more in the future. Not a bad deal FOR THEM!
Now don’t hear we wrong. I’m not saving you shouldn’t have any tax-deferred investments. I just wouldn’t put all your savings here. I would have a combination of tax-deferred, tax-free, and taxable savings. It’s simply hedging your tax exposure.
Problem Area #4: Taking Far Too Much Risk For Too Little Of A Return
Many people tell you to buy an index fund and hold it forever… Or take a look at mutual funds with good five and ten year track records and you will do great! Good in theory, bad in practice for most investors. If you put $100,000 into an S&P 500 index back in 2000, that would be worth about $114,000 – a gain of nearly 14% in the S&P 500 fund from January, 2000 to January of 2011. Wow! 14% for 11 years worth of a roller coaster! Was this little return worth all of those sleepless nights?
Instead choose investments that are in line with your faith and values and you know inside and out. Most investors hand off their money to “someone else”, be it a mutual fund, advisor, broker, or money manager, without understanding what they are investing in, how much risk they are taking, what values they are supporting, and how liquid or illiquid the investment is.
Make This The Year To Get Educated
Don’t just take my word for it. Do the research, do your homework! Make this the year you will read up on finance and start making wiser decisions. What are your thoughts?
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The Christmas season is here and you want fun ideas to do!
To help make your life easier this year, I created a bucket list full of over 100 activities. You can use it as an actual bucket list or just enjoy scrolling through some fun things to do with friends and family before December 25th.
You will find everything from decorating ideas for your home (from simple snowflakes that are easy enough for kids to make) all the way to DIY recipes for Christmas treats.
Who doesn’t love a good list?
This Christmas bucket list is things you can do with your family around the Christmas season to make it more lively and enjoyable.
I made this list for my own kids, but I thought I would share it with you to use it too!
How can you make your Christmas bucket list more fun?
There are many different ways to make your Christmas bucket list more fun.
One way is to focus on new activities that you haven’t done before. Another way is to add food-related activities, which always make Christmas special.
You can also try incorporating some outdoor activities, even if it’s just for a (snowy) day.
And don’t forget about family traditions! They’re a big part of the holidays and can really enhance the experience.
No matter what you do, make sure you enjoy yourself (and not stress yourself out)! The holidays are a time for celebration and should be spent with loved ones. Merry Christmas!
Memorable Christmas Bucket List
While we love the classic Christmas bucket lists, we also are always looking for unique ideas to add to your holiday bucket list.
Some of these out-of-the-box ideas are pretty sweet and you may want to do them year and year again.
You can find everything from baking cookies to attending a German market to spending Christmas at a lodge. No matter what you choose, make sure you keep in touch with your family and friends during the holidays.
1. Go to Mexico. This is one of our Christmas traditions! There is something relaxing about enjoying the beach while Felix Navidad is playing in the background. (Gift hint… all of the beach gifts can be given to be used on the trip.)
2. Book a Wintery Mountain Stay. On the flip side, there is something magical about sipping hot cocoa while by the fireplace when giant snowflakes are falling outside.
3. Participate in a Neighborhood Luminaires Night. Organize one night for all of your neighbors to put luminaries outlining their driveways. It is a symbolic event with neighbors coming together in peace.
4. Roast Chestnuts. Just like in the famous song by Nat King Cole, it is your turn to roast chestnuts on an open fire.
5. Wrap Presents with Friends. For some wrapping presents is fun, for others it is a task. But everything is always sweeter to do with friends, so plan a time to wrap presents with friends. Appetizers and drinks are optional.
6. Order Matching Christmas Pajamas. This is a popular Christmas tradition for most families. Make sure you order your matching Christmas Pajamas in time. Some of my favorite places to find them are Kohl’s, Macy’s, and Amazon.
7.Wear Matching Christmas Pajamas. Depending on the age of your kids and spouse will depend on how well the matching outfits go over. Make sure to snap pictures!!
8.Kiss Under the Mistletoe. This is a fun Christmas tradition for kids and adults. Kids love this because it’s not just kissing their parents on the cheek, but they get to kiss everyone in the room! Adults love this too because it’s a great opportunity to get some alone time with your significant other.
9. Host a Progressive Dinner. This is a great idea to host a fun holiday party. For each course of a meal, you move houses.
For example, you start at house A for appetizers.
Then, move to House B for dinner.
Finally, wrap up at House C for dessert.
If you have more houses participating, then you can easily stretch to a 7-course meal.
10. Buy Ugly Christmas sweaters. This is a love-hate for many people. Are you totally into buying Christmas sweaters or do you want to shy away? Either way, it is always helpful to have at least one ugly Christmas sweater in your closet.
11. And then host an Ugly Sweater Christmas Party. Time to invite all of your introvert friends for an epic ugly sweater party. The winner walks away with a prize!
12. Go to a Christmas Eve Service. If you’re feeling a little more spiritual, there are many churches that offer Christmas Eve services. If it’s your first time going to one, consider this a good opportunity to introduce the whole family and get them interested in going.
13. Classic Christmas Movie Marathon. This is always a popular idea! Especially one that is next to free to do! Pull up the classic movies and enjoy!
14. Read Christmas Books. This is another one that is uber-popular in our house! We try to stick with Christmas-only books in the month of December. One of our favorites is JK Rowling’s latest book!
15. Go on River Cruises. The river is a great place to find some peace and quiet. You can go during the day or at night.
16. Stay Downtown. Whether you are looking in another state or in your own city, you’ll find a new adventure.
17. Snowman Building Competition. Set up a snowman building competition in your neighborhood and let the winners decide what charity to donate the money raised! Bragging rites until the next competition is held.
18. Shake a Snowglobe. Maybe even add to your snowglobe collection. There is a great children’s book called Snow Globe Family. That is a super fun read.
Classic Christmas Bucket List Ideas
This is the list you think of when it comes to Christmas things to do!
Whatever you decide to do this holiday season, make sure it’s something that will create memories that will last a lifetime.
19. Bake Christmas Cookies. This is the classic holiday bucket list idea. Here are some of our favorite Christmas cookie recipes.
20. Watch Christmas Hallmark Movies. Did you know there is a countdown to when the Hallmark Channel releases their Christmas movies?!?! Yes, this is a must-do for many people. In fact, you may want to buy them the same Hallmark socks we gave our moms.
21. Host a Christmas cookie exchange. Yes, please! Cookie exchanges are the best. In fact, it is one of the most popular Christmas challenges.
22. Go Christmas Caroling. Is it a tradition? Or is it just something that you love to do with your friends and family? Bring joy to your neighborhood or nursing home by singing traditional Christmas carols.
23. Volunteer. This could be serving at a soup kitchen, organizing an event for people who can’t afford gifts to “shop,” or lending a hand to a neighbor in need. There are many organizations looking for help.
24. Build a Snowman. Yes, this is the ultimate idea for families. Make sure you have the snowman supplies to dress up your Frosty the Snowman properly. Don’t forget the carrot nose!
25. Build a Gingerbread House. This is a classic activity for many kids and you can easily pick up a gingerbread house kit for under $10. However, it is not just for kids. Check out this family’s gingerbread house display!
26. Christmas Portrait Time. Thankfully, this time of year you can find plenty of Pinterest-perfect backdrops to take portraits at. You can take family photos or one of each person in your house. This accessory helps your amateur photos look professional!
27. Mail Christmas Cards. This may have been a long-standing tradition for many years and slowly making a comeback. You can take Christmas photos just for the occasion or a collage of photos. Order your Christmas cards here.
28. Read Twas the Night Before Christmas. This Christmas classic must be read at least once on Christmas Eve. Grab your copy of the classic book.
29. Find Creative Ideas for Elf of the Shelf. Let’s face it. You jumped on this tradition … hook.line.and.sinker. Now, you must keep up with all of the Pinterest perfect ideas.
Christmas Outdoor Bucket List
Time to get outside and explore. Fresh air is always helpful!
30. Go Sledding. This is a classic bucket list item. Check out a new sledding hill in your neighborhood.
31. Build a Snow Fort. This is personally one of my favorite activities, but Mother Nature must cooperate with tons of snow! Grab some shovels and start building a fort!
32. Snowball Fight Time. Who doesn’t love a good snowball fight?!?! Grab some friends and head out for an epic snowball fight. Even better if you built the snow fort prior to game time!
33. Go Ice Skating. This is a classic especially if you live in the upper midwest. There are plenty of recreation centers that make ice skating a reasonable cost activity.
34. Skiing. Fresh powder sounds like the perfect Christmas tradition. Just make sure to book your ticket early.
35. Plan a Wintery Picnic. Grab a blanket, lunch, some hot cocoa, and your Christmas Pajamas for an outdoor picnic this winter! Make this time special with a special picnic basket to use.
36. Go Snowboarding. Time to shred the slopes. Check out the latest snowboarding gear.
37. Time to Go Tobogganing. What is tobogganing exactly? Much like sledding except you hit the snow-covered slopes and artificial-ice-covered chutes with a toboggan.
38. Give the Gift of Nature. Take your family on an outing to see some beautiful nature! Get out in the fresh air and enjoy the beauty of nature.
39. Make a Snow Angel. This is the perfect activity for kids to do. Yet, very calming and peaceful if you decide to get down in the snow and create snow angels.
40. Hunt for the Perfect Live Tree. Grab your permit and go on a hunt for the perfect Christmas tree. Make sure to bundle up and wear snow boots!
41. Catch Snowflakes on your Tongue. Regardless of your age, this childhood memory needs to be done yearly for your Christmas bucket list. Drop all of your worries off your shoulders as you catch a snowflake on your tongue.
42 Skate on Outdoor Ice Skating Rinks. Skip the indoor rinks and head outside to skate. Even more romantic if the snow is falling.
43. Create a Winter Wonderland. This one is a do-it-yourself project that doesn’t require any crafting skills.
44. Go for a Holiday Walk. Take some time out of the hustle and bustle by taking a walk outside.
45. Neighborhood Christmas Light Competition. Another great idea is to put your home in a Christmas lights competition! This can be really fun if you have friends and family who live close by. All you need is some creative decorations and an appetite for holiday cheer.
Name That Entertainment Holiday Bucket List
Time for friends, laughter, and fun!!
These are the social must-haves on your entertainment holiday bucket list!
46. Host Christmas Eve Dinner at your home. If you have room, open up your home to friends or family who might otherwise be alone for Christmas. Our Christmas Eve tradition is fondue!
47. Christmas Party Night. Invite your friends and family over for a Christmas party night! This is a fun way to get everyone together in one place, have some laughs, and enjoy each other’s company.
48. Wear Christmas Dress Attire. Everyone wants an excuse to dress up. So, make sure you have a special occasion to year your Christmas cocktail dresses.
49. Find Entertainment from the Seasonal Classics. This could be watching The Polar Express (it’s on Netflix now!), listening to holiday music, or reading a children’s Christmas book.
50. Host an Advent Calendar Party. It is so much fun to count down the days before Christmas! This works especially well in a classroom setting. Each day is a new activity to count down the days until Christmas.
51. A Christmas Story. Watch A Christmas Story and then read a few of the lines with your friends!
52. Home Acting. Put on your own production of your favorite movie or theater production!
53. Misfit Toys. Collect a variety of small, inexpensive toys and have your guests guess which toy belongs to each guest. To make it more fun, be sure to include some items that are broken or missing pieces!
54. Mistletoe Bingo. Get your guests in the Christmas spirit by setting up a bingo board with different categories for them to fill out!
55. Birthday Party for Jesus. ‘Tis the reason for the season – the birth of Jesus Christ. Plan a birthday party to celebrate everything Jesus gave to us.
56. Holiday Game Night. Christmas is a time for fun and games, so why not have a Christmas-themed game night? Some popular game ideas include playing charades, Pictionary, or Cranium. You could also try some new games that you haven’t played before – like Elf on the Shelf or Monopoly.
Holiday Season Bucket List Around Town
One of the best things about the holiday season is there are SO MANY activities to do with no money. You can find something to do each day for free.
The paid events are classics that create lifelong memories!
57. Book a Limo to Check out Christmas Lights. What better way to enjoy watching the Christmas lights and not having to drive? Personally, this works great when sharing the limo costs with friends!
58. Attend a Local Craft Fair. These craft fairs are becoming a hot place to find personalized gifts. Plus it is a great way to give back to local small businesses as well as the high school teams and clubs who organize the craft fairs.
59. Book Tickets to a Lightshow. This is a hot commodity so make sure to book your tickets early – like around Halloween. That way you will get the prime time you want to attend the light show. Also, many areas have more than one popular light show to see!
60. Attend a Ballet Performace. While the Nutcracker is a popular dance performance, there are plenty of other ballets at this time of year.
61. Watch The Nutcracker Live. I have danced in and seen the Nutcracker so many times that I have lost count. However, I love the production, the costumes, and the music! Make it more magical by taking a young girl who has never seen the Nutcracker before and watching the production through their star-struck eyes.
62. Visit Your Local Christmas Market. Every town has one. A local store stocked with all things Christmas! Maybe even see if your area has a German Christmas Market and check out the varying traditions.
63. Attend a Holiday Tree Lighting Event. Right after Thanksgiving, there are plenty of local tree lighting ceremonies. Check with your city for dates and times.
64. Attend a Holiday Festival. The holidays are the perfect time to attend a festival with family or friends. By attending, you can enjoy the activities and experience new things that may be on your list for next year!
64. Attend a Christmas Parade. Get out and see the Christmas spirit in all of your favorite holiday traditions. Most cities kick off the holidays with a parade.
Christmas Bucket List in the Kitchen (Recipes a Must!)
Around the holidays, the kitchen is the hub of the activity. More money is spent on food and drink in November and December. So, you must include a few of these Christmas activities on your list.
65. Decorate Sugar Cookies. This is a great project that tastes delicious. It’s also really easy and you’ll be surprised how much your decorating skills improve each year.
66. Make Hot Cider. Hot cider is a great drink to have this time of year. This Christmas treat can be made in the oven or on the stovetop, with just enough heat that it’s still perfect for kids and adults. Plus it makes your house smell naturally festive.
67. Enjoy Hot Chocolate with Marshmallows. This is a perfect wintertime drink. Surprise the family with cute Christmas mugs.
68. Drink Egg Nog. This is a classic must-have during the holidays. There is something that warms your belly with the creaminess of egg nog. Make sure to buy your Egg Nog early as many stores ran out at Christmas time. Which eggnog flavor is your favorite?
69. Gourmet Hot Chocolate Bar. Set up a hot chocolate bar with all of your favorite toppings, like cinnamon, heavy cream, and gourmet chocolates. This will make the holidays even more special!
70. Snowy Ice Cream Treats! Make some delicious homemade ice cream and put it in bowls or cups and hand them out to your loved ones.
71. Visit a Bakery. These places are filled with great ideas! If you don’t have time, pick up one of their creations. Or try to make your own at home.
72. Make Your Own Gingerbread House Kit. This gingerbread house kit contains everything you need to make a gingerbread house this season.
73. Make Homemade Marshmallows. These are so simple to make and perfect for hot chocolate or in a sugar cookie recipe!
74. Make a Birthday Cake for Jesus. There is a huge reason to celebrate! So, let’s bake a cake and celebrate!
Crafty Christmas Bucket List
You don’t have to be super crafty for any of these projects. Simple ways to make decorations!
For many people, making their own gifts is a great way to give awesome Christmas gifts when you are broke.
75. Get crafty! There are thousands of Christmas crafts you can do during this season! Some ideas include making ornaments or wreaths, cutting out snowflakes, decorating a gingerbread house, or making your own Christmas cards.
76. Make DIY Christmas Tree Ornaments. Okay, I will be honest … there are so many great ideas for DIY Christmas Tree ornaments that I freeze on which project to actually complete. So, pick 1 or 2 that you know are within your crafty skills and get started!
77. Make Paper Snowflakes. This is a classic Christmas activity to do.
78. Make a Christmas Wreath and Decorations with your kids or family members. This is great for the whole family to do together, as it helps create memories that are sure to last a lifetime.
79. Wonder the Craft Stores. With no agenda and plenty of time! Let your mind wander and fill with amazing Christmas crafts you could make.
80. Make Salt Dough Ornaments. This is the simplest Christmas craft for the non-crafty person! Learn how to make salt dough from Katie.
81. Create Candy Care Garlands. The options are endless on this one! You can use big candy canes or mini candy canes to make your garlands.
82. Decorate a Christmas Photo Frame. This is a fun project that can be completed in just minutes! Take any old frame and spray paint it white. Then, add Christmas decorations around it or use spray painted puzzle pieces.
83. Knit Christmas Mittens. This is a quick and easy project to knit up for the holidays!
84. Make Your Own Snowmen. Make your own snowman out of rice or beans, it’s fun and easy.
85. Put Snowflakes on the Windows. This is a fun and easy way to decorate for the holidays.
86. Make Your Own Poinsettia Wreath. These wreaths can be made in no time at all!
87. Find Creative Ideas for Elf of the Shelf. Let’s decorate the elf and make its day bright!
88. Make Wreath Cards from Last year’s Christmas Cards. This is a great way to upcycle and make unique Christmas ideas. Watch this YouTube video to learn how.
89. Decorate Staircases with Ribbons. This is a simple trick to make your house look more festive!
90. Make Orange Peel Poppuri. This is a simple and quick recipe that will make your house smell fragrant.
91. Make Christmas Cards. This is the perfect time to make your own Christmas card with all of your family members, friends, and even pets! There are so many fun ways to customize these cards. You can be crafty with paper supplies or use a digital template.
Decoration Christmas Bucket List
The decor is the major component of the holidays! Make sure you are ready to get decorating!
92. Decorate the Christmas Tree. This “to-do” should be treated with a little more emphasis. Plan an event around decorating the tree and sharing memories while hanging ornaments.
93. Create a Themed Christmas Tree. Star Wars fan? Barbie lover? Marvel fan? Sports diehard? Time to unleash all of your passion and decorate a themed Christmas tree in honor of your fervor. Find some ideas to jumpstart your creativity.
94. Hang Chrismas lights. Even better make your house look better than the National Lampoon’s Christmas Vacation. Order your lights here.
95. Upgrade Your Christmas House Lights to a Christmas Light Show. Thankfully, technology has greatly approved and you do not need to be an engineer to figure it out. You can pick up this up and quickly set your lights to music.
96. Pick a New Scent for the Holidays. Personally, I like peppermint.
97. Buy Cute Christmas Dish Towels. This is a simple decoration tip from the pros. With this simple purchase, it looks like your house has been staged for the Pinterest perfect Christmas dinner.
Shopping Place for Holiday Activity
Every bucket list has gifts on it, so time to get your shopping done!
98. Create your Christmas Budget List. While this may not be on the top of your list, this is a very important money management tip to master. Learn how to make a Christmas budget that works for you.
99. Shop for Christmas Gifts. This is a great time to find gifts for your friends and family. No need to rush, but shop early if possible! Amazon has a ton of gift ideas that are easy on the wallet too! Find a list of the best Christmas gifts under $10 for kids.
100. Purchase Christmas Flowers just for You! Buy some fresh flowers from your local flower shop and enjoy them for the holidays!
101. Wear Christmas socks. Hello, we all love cool socks! Make sure you pick up some new Christmas socks for your holiday collection.
102. Start A Collection. If you are looking for some easy gifts, start a collection that can be added year after year! A few examples include Christmas ornaments, books about Christmas traditions from around the world, and ornaments made out of candy canes.
103. Shop A Christmas Store. Find a Christmas Store; they are worth a visit if you want to get into the holiday spirit! They have everything from traditional nutcrackers to more unique items like Santa toilet paper holders. No matter what your interests are, these specialty stores have something for everyone.
104. Give Money Creatively. Did you know you could give money besides just writing a check? There are over 45 different money gift ideas for you.
Christmas Bucket List for Family Activities
Entertaining the kids is a must! Thankfully there are so many things to do.
Plus you can see the magic of the season through their eyes!
105. Write a Letter to Santa. This needs to be done in the first part of December in time to reach the North Pole.
106. Make Reindeer Food. Fruit and vegetables make a great snack for the reindeer, so it’s easy to do this activity with your kids. You can also experiment with adding different spices into the mix such as cinnamon or nutmeg.
107. Watch the Holiday Funny Movie Marathon. This is a fun way to spend a cold or hot day. Pick out some of your favorite hilarious movies and get cozy in front of the TV! Laugh til you drop!
108. Make Winter Slime. Yes, every kids LOVES slime and what is better than just slime… WINTER SLIME! Pick up Iceberg Frozen Winter Slime for your kid’s Christmas Party.
109. Host a Kid’s Christmas Party. This is something we have done every year is to host a kid’s Christmas party. It is a simple and festive way to share in the Christmas season. Provide some simple Christmas crafts, hot chocolate (with marshmallows of course), and easy snacks.
110. Sing Christmas Carols. This is a fun family activity that will make you feel festive!
111. Visit Santa. This is an old-fashioned tradition that never gets old. Visit Santa and find out if you have been naughty or nice!
112. Make Paper Snowflakes. This activity is a must for kids. Simple and easy to make. Plus they will get lost in the activity for hours! Find paper snowflake ideas.
113. Make Rudolph Pancakes. One easy way to make your Christmas bucket list more fun is by adding some creative and festive tasks to ordinary things like making pancakes.
114. Talk to Santa Claus. It’s hard to believe, but there are actually people who talk to Santa every year and make sure he has everything he needs for Christmas Eve. You can talk to him on the phone or online, and it’s a great way for your kids to get in touch with their inner child.
115. Go for a Christmas Scavenger Hunt. This is a great family activity that will have your kids having fun and learning at the same time. You can make it as easy or as hard for them to complete, depending on their age.
116. Make a Christmas wish list and check it twice. Have the kids pick out gifts they would like for themselves as well as give to others.
117. Have a Holiday Movie Night with your Friends and Family. Make some popcorn, grab your favorite movie, and cuddle up on the couch for an evening of laughter!
Holiday Bucket List to Help Others
You don’t have to be a millionaire philanthropist to help others in your community. You can make a difference by doing small things that will go unnoticed, but still, provide assistance for those who need it.
118. Participate in Random Acts of Kindness. This is a fun way to do something nice for someone else this Christmas. It’s also a great opportunity to practice your own “random acts of kindness” you want to give back in the new year.
119. Polar Plunge: A Fun and Festive Way to Help Others. Create a team of people who will pledge money for every degree the temperature drops below freezing! Make sure to follow through and take the polar plunge!
120. Donate to a Food Bank. Make a donation to your local food bank or homeless shelter in order to help those who are less fortunate during this time of year. This is a perfect way to help those in need in the wintertime and continue the tradition year round!
121. Be Someone’s Secret Santa. This is a fun and heartwarming tradition that works well for your whole family. It’s simple, too: just give out the names of people you would like to be Santa Claus for in December and tell them not to let the person know who you are.
122. Donate Toys. There are a ton of organizations that accept donations of toys or other items. Find the best charities to donate your old toys and help those in need this holiday season!
123. Make a Financial Contribution to a Nonprofit. Most nonprofits receive the majority of their financial donations in the last months of the year. Maybe see if you could make it a part of your biweekly budget and give more often.
124. Visit the Animal Shelter for a pet adoption event. It’s not just cats and dogs that need homes on Christmas Eve! Many of our furry friends are forgotten about this time of year. Stop by a local animal shelter.
125. Adopt a Family for Christmas. If you’re not into the whole Santa Claus thing, why not take it upon yourself to give back to the community? Adopt a family for Christmas by purchasing gifts, food, and necessities that they might not otherwise have. There are many families in need this time of year and it’s truly an act of love and kindness to give back in this way.
126. Give the gift of music. If you’re a musician or know someone who is, offer to play at a nursing home or assisted living facility on Christmas Eve. If you’re not a musician, sponsor the music of a local choir or orchestra.
127. Give the Gift of a Smile. Visit an elderly neighbor and say hi. Smile to the person behind you in line. It takes more muscles to frown than smile.
128. Pick a Tag from a Giving Tree. Many companies set up a tree with tags of people who are in need. Then, their employees can pick a tag and purchase the selected item.
129. Baking for Others: A Fun Way to Help Others. Bake for someone in your neighborhood and donate the ingredients to an organization that feeds people in need!
130. Pray for Peace and Happiness. Don’t stop praying during these hard times. Pray for peace, happiness and prosperity around the world.
Something Else for Holiday Bucket List Items
These are the ones that are still awesome ideas but don’t fit in the above categories!
131. Empty your Christmas Schedule. This is a great way to destress, especially if you have been stressing about your holiday season.
132. Start Dreaming About Your New Year’s Resolutions. This one is my favorite! I love rolling over to a new year with fresh dreams.
133. Grab your Yearly Planner before January 1st. Yes! Especially with supply chain issues, I recommend getting your yearly planner in advance. Here is the current yearly planner I use.
134. Create Your Own Advent Calendar. It’s easy to create your own advent calendar. Use a simple white board and some markers to create your own countdown to Christmas.
Christmas Bucket List for Couples
These are the top 10 ideas from above just for couples!
Ice Skating at Night
Kiss Under the Mistletoe
Go on a Sleigh Ride
Romantic Movie Night
Catch a Snowflake on Your Tongue
Enjoy A Fireside Cuddle
Leisurely Stroll on a Snowy Mountain Area
Escape for a Night Away
Volunteer Together
Dream About Your Future
Christmas Bucket List Template
Okay, we gave you TONS OF IDEAS!
There is absolutely no way you can accomplish them all in one Christmas season.
So, here is a template to use to pick your top 25 activities to complete.
If you’re like us then setting up the tree is something that you always look forward to. From decorating the tree, baking cookies, and watching movies under it with your family this Christmas is sure to be a magical time for all of us!
What are some tips for creating an ultimate Christmas bucket list?
There are a few things to keep in mind when creating your ultimate Christmas bucket list.
First, make sure that it includes experiences that you will really enjoy. This is not the time for obligation or duty–the list should be filled with activities that you and your loved ones will love doing together.
Second, try to include a variety of different types of activities, from traveling and vacationing to visiting new places and trying out new experiences.
And finally, don’t forget to add some classic holiday traditions as well!
KEY TIP… Plan Your Day Ahead: What are you going to do tomorrow?
How can you make your Christmas bucket list more meaningful?
When it comes to the holidays, many people want to do as much as they can.
The Christmas bucket list is often a great way to make sure that you’re able to check off all of the items on your wish list. But sometimes, we can become overwhelmed by all of the things that we want to do. This year, consider making your bucket list more meaningful by doing activities that will bring you happiness and joy.
Idea #1 – Be Happy
One way to make your Christmas bucket list more meaningful is by only including activities that truly make you happy.
For example, if decorating the tree or going shopping for presents isn’t really your thing, then don’t put them down as items that you have to do this year! Instead, focus on doing things like baking cookies with loved ones or taking a walk in the snow.
Idea #2 – Spend Time Together
Another way to make your holiday season more special is by spending time together over a fire. Whether you build one in your backyard or take advantage of one at a local park, this is a great opportunity for conversation and reflection.
Consider lighting the fireplace and reading a good book together–or having some deep conversations about what’s been going on in each other’s lives!
Idea #3 – Make an Advent Calendar
Making your own advent calendar is a fun way to get into the Christmas spirit. You can make it as simple or as complex as you want, but the key is to include activities that will get you excited for the holiday season.
For example, one day you might do an act of service for someone else, and on another day you might bake cookies!
Now, start brainstorming ideas with your family and friends.
Idea #4 – Get Prepared
Take time to figure out what kind of holiday experience you want, which helps narrow down the items on your bucket list.
Another way to make your Christmas bucket list more special is by preparing for Christmas Eve the night before. One great idea is to create a box filled with all of the things you’ll need for the following day. This could include pajamas, breakfast foods, and even some presents!
Use the printable to prioritize which activities your family would like to do during the holidays.
Idea #5 – Make it Personal
Finally, why not add a personal touch to your Christmas this year?
Make your list as personal and meaningful to you as possible by only including activities that are important.
Instead of using store-bought wreaths and ornaments, try making them yourself! There are endless possibilities when it comes to homemade decorations, so get creative and have some fun!
This isn’t the time to make your season harder – only what you want to do.
What are some things you can do to make your Christmas bucket list more exciting?
There are many ways to make your Christmas bucket list more exciting!
One way is to add a variety of activities, from festive traditions to outdoor adventures.
You can also mix up the type of activities so that you have something for everyone in the family. Additionally, you can make a point to do new things every year and keep your bucket list updated.
This will help ensure that you have an enjoyable and memorable Christmas season.
What are some tips for making your Christmas bucket list more fun for everyone?
One way to make your Christmas bucket list more fun for everyone is to try and do something that is meaningful and fun for everyone in your family.
This could be anything from spending time by the Christmas tree together, to doing random acts of kindness this holiday season!
A great tip would be to have everyone include their top three ideas that make the family Christmas bucket list.
All in all, you want to start Christmas traditions that the whole family looks forward to each and every year. This may be as simple as starting a new family tradition or making homemade gifts for your friends and neighbors.
Which Holiday Activities do you Need & Love?
So many ideas, right?
Your head may be spinning, but only put the holiday activities on your list that you want to do.
If you’re looking for something special to do this year, consider checking out one of the many Christmas productions around the country. From The Nutcracker to A Christmas Carol, there’s something for everyone.
And don’t forget about all of the amazing light displays – they’re definitely worth seeing!
It’s the most wonderful time of year, so you might as well make your family traditions more exciting by adding some creative tasks to what is normally a boring list of chores.
What are some of your favorite Christmas traditions? I’d love to hear about them!
For more inspiration, check out our Christmas Pinterest board.
Merry Christmas!
Also, it might be time to start thinking about what do I want for Christmas?
Know someone else that needs this, too? Then, please share!!
Save more, spend smarter, and make your money go further
Refinancing your mortgage is a great way to save money. As both a real estate investor and homeowner, I’ve refinanced mortgages about ten times in the last ten years. My wife and I are in the process of refinancing our mortgage on our primary residence now, for the second time in 12 months.
Through this process, including one failed attempt at a refi, I’ve learned a lot about how the process works. I’ve learned that it’s easy to mess up a home refinance. So, with that in mind, here are seven ways to wreck your next mortgage refinance.
Failing to Shop Around for the Best Rates
While home mortgage rates typically fall within a tight range from one bank to the next, they can and do vary. Even a small variance of 25 basis points can have a significant financial impact over the course of a 15 or 30-year mortgage. It’s important to compare mortgage rates before locking in a loan.
Failing to Consider Fees
Costs are a critical component in determining whether it makes sense to refinance a mortgage. In some cases, banks will attempt to make their rates look very attractive by adding in significant costs to the loan. As a result, make sure you keep a close eye on the fees charged for the loan. Fortunately, costs for different loans are easy to compare because banks are required to provide you with a “Good Faith Estimate” that itemizes all of the costs of the loan.
Neglecting Your Credit Score
Your FICO credit score plays a significant role in determining the interest rate you can get. As a general rule, a FICO score in the mid to high 700’s will secure the lowest mortgage rates available, so long as you otherwise qualify for the loan. As your credit score goes down, however, the interest rates can rise significantly. If your credit is less than stellar, you should considering improving your FICO score before refinancing your mortgage if at all possible.
Acquiring More Credit During the Refinance
I learned this one the hard way. During our current refinance, we applied for and obtained a new credit card. While this did not scuttle our loan application, it required significant documentation about the new card and any balances on the card. In some cases, new credit or debt obtained after you have been approved for the loan could wreck the refinance. Avoid new credit if at all possible, and at a minimum, discuss the issue with your bank or mortgage broker before applying.
Ignoring Your Savings Account
I was surprised by how much money we need to have available for closing. While the fees for our loan are minimal, we are required to bring enough cash for prepaid items (insurance and taxes), as well as interest on the loan from the date of closing to the end of the month. These items can easily add up to several thousand dollars and banks are required to document where you obtained the cash for closing. In our case, they required a copy of our most recent bank statement along with an explanation of the source of any large deposit. As a result, it’s important to maintain sufficient savings to handle the closing costs.
Changing Jobs During the Refinance
Sometimes we have no choice but to change jobs and in some cases, an opportunity comes along that’s too good to pass up. If you are in the middle of a refinance, keep in mind that a new job will, at a minimum, add a lot of documentation requirements to your loan. If you can hold off until closing, that’s ideal. Otherwise, like taking on new credit, speak to your mortgage broker about the situation.
Yo-yo Refinancing
This is my term for those that refinance their house repeatedly. Having refinanced our house twice in 12 months, one could easily accuse us of committing this sin (a 30-year fixed rate south of 4% was too hard to pass up!). The key to remember, however, is that refinancing back into a 30-year mortgage adds a lot of time and interest to your mortgage. Before you know it, you’ll find yourself at the doorstep of retirement with a hefty mortgage still remaining on your home. One alternative is to refinance into a 15 or 20-year mortgage if you can handle the payments. You can compare the differences between a 15 and 30-year mortgage here.
We stuck with a 30-year mortgage, but my wife has informed me that it’s the last time she is agreeing to a refinance. I sure hope rates don’t go below 3 percent!
This article comes from Rob Berger, the founder of the popular personal finance blog, the Dough Roller, and credit card comparison site, Credit Card Offers IQ.
Save more, spend smarter, and make your money go further
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