Tally

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Have you ever gone over your budget only to find you’ve overspent on food? With food being the third-highest household expense behind housing and transportation, our food choices have a huge impact on our budget.

Learning how to budget groceries can help you save more to put toward your financial goals. Here are 28 ways to help you learn how to budget groceries.

1. Track current spending

Before you figure out what you should be spending on food, it’s important to figure out what you are spending on food. Keep grocery store receipts to get a realistic picture of your current spending habits. It might help to break down spending by category (via a spreadsheet or on paper), including beverages, produce, etc. Once you’ve done this, you can get an idea of where you need to trim down your grocery bill.

2. Allocate a percentage of your income

How much each household spends on food varies based on income and how many people need to be fed. Consider using our budget calculator if you’re not sure where to start. Try allocating 10% of your income to food as a starting point and then you can increase from there.

3. Avoid eating out

Recent data from the Bureau of Labor Statistics shows a 13% increase in food spending in the U.S. — a jump driven by rising purchases on dining out. Avoiding eating out where possible can help reduce your overall food spending. If you’re actively dating or enjoy restaurants with friends, be sure to factor eating away from home into your food budget — and stick to your limit.

4. Plan your meals

It’s much easier to stick to a budget when you have a plan. Plus, having a purpose for each grocery item you buy may help ensure nothing goes to waste or just sits in your pantry unused. Don’t be afraid of simple salads or meatless Mondays — not every meal has to be a gourmet experience.

5. Keep a fridge grocery list

Keep a magnetized grocery list on your fridge so that you can replace items as needed. This can help you buy food you know you’ll eat. Sticking to a list in the grocery store may help you stay accountable and not spend money on processed or pricey items.

6. Eat before you go to the store

If your mother gave you this advice growing up, she was onto something: according to studies, shoppers spend more when hungry. Eating before going to the grocery store may help you avoid tantalizing foods that can cause you to go overbudget.

7. Be careful with coupons

Getting 50% off ketchup is a great deal — unless you don’t need ketchup. Beware of coupons for items you don’t need. If the item isn’t on your list, you’re not saving at all, but rather spending on something you don’t truly need.

8. Embrace the bulk section

The bulk section of your grocery store may help you find inexpensive staples, discover new foods and bring variety into your diet. Take the time to compare the price of prepackaged goods versus bulk — bulk is likely cheaper.

9. Bring lunch to work

Picture this: you’re trying to stick to a food budget, and one day at work you realize it’s lunchtime but you forgot to pack a lunch. All the meal planning and smart shopping in the world won’t help if you don’t have food when you need it.

10. Love your leftovers

Instead of throwing your leftovers away, try to eat them to avoid wasting money. To keep things interesting, look for ways to repurpose foods — yesterday’s leftover taco meat can become today’s shepherd’s pie.

11. Keep an inventory

Keeping a list on your fridge of what you have on hand can help you avoid food waste and get creative when meal planning. And it’s a great way to get the most use out of grocery items that are sold larger quantities than you need for a single recipe. Not sure what to do with that giant bunch of celery or box of spinach you have left over from another recipe? Try out some online recipe blogs or sites that offer recipe ideas based off a few ingredients you input.

12. Freeze foods that are going bad

Another way to avoid wasting food is to freeze things that look like they’re about to go bad. Fruit that’s past its prime can be frozen and used in smoothies. Make double batches of soups, sauces and baked goods so you’ll have an alternative to ordering takeout when you don’t feel like cooking.

13. Use curbside pickup

About 29% of shoppers admitted that seeing an item that looked too good to pass up led to impulse purchases. Using curbside pickup can help prevent you from purchasing unplanned items.

14. Check the top and bottom shelves

Wise grocery stores know that eye level is where the most sales happen. In fact, consumers select about 80% more products at eye level than at the bottom shelf. So next time you’re out shopping, take a quick look up and down — you may find a better deal hidden out of sight.

Additional grocery saving tips

Need more ideas on how to save on your food bill? Here are some additional tips that can help.

  • Choose generic — One survey found that 50% of people said opting for generic products over name brand helped them save on groceries.
  • Drink more water — Recent data found that 17% of consumers cut back on purchasing beverages at the store due to rising inflation. Drinking more water may help you save what you would’ve otherwise spent on beverages.  
  • Pay with cash — Try going to the grocery store with cash — and only what you’ve budgeted for. Leave your credit or debit card at home. After all, you can’t spend what you can’t pay for.
  • Buy what’s in season — Food prices can vary depending on whether they are in season or not. When foods are out of season, they may be scarce — and therefore more expensive. Try to stick to buying foods that are in season.
  • Grow your own herbs — Herbs at your local grocery store might sometimes be expensive. Growing your own is one way to cut back on your grocery bill. 
  • Plan a meatless meal — Beef prices increased for three years straight from 2020 to 2022, and the USDA predicts other meat categories will rise in price in 2023. By planning a meatless meal every so often, you may be able to save some money on your grocery bill.
  • Buy cheaper cuts of meat — Not all cuts of meat cost the same. You may be able to save money by choosing chicken thighs over chicken breasts, ground chuck over sirloin and pork loin over pork chops.
  • Ask for a discount — This won’t always work, but if you notice your food is close to expiring, ask the cashier for a discount. You may be able to save yourself a few dollars. 
  • Learn how to preserve food — If you have some fruit that’s going bad in your home, you may be able to preserve it by making and canning jam. Hopefully the more food you can save in your home, the less you’ll need to buy at the store.
  • Keep a running tally while you shop — Jotting down the prices of items you put in your cart or quickly crunching the numbers in your phone’s calculator can help you stay more aware of how much you’re spending.
  • Buy canned food — Canned food is often less expensive than fresh foods, so buying canned could stretch your food budget.
  • Shop sales — If you notice a food you often eat goes on sale, stock up if you have room in your budget. While you may spend more than you normally would up front, you’ll save yourself from having to purchase the item at full price in the future.  
  • Use rebate apps — Some apps provide cash back on certain purchases. Check to see if the items you need to buy at your next shopping trip may qualify.
  • Sign up for your store’s loyalty program — Some grocery stores have points or loyalty programs that can provide you with extra discounts when you shop.

Bottom line

Sticking to a food budget can take planning and discipline. However, learning how to budget groceries by being resourceful and cooking healthily is a skill that can benefit you for years to come.

Earn cash back on select debit purchases with Credit Karma Money™ Spend.

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Source: mint.intuit.com

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Zero Based Budget template is a zero budgeting plan that helps you break down your expenses into categories. It provides an easy way to create budgets and track the spending in each category over time.

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.

Zero based budgeting is a process where every dollar that comes in goes to the number one priority.

It’s an effective way of prioritizing your money and executing properly, but it can be hard to know where to start when you are just getting started with this new system.

Budgeting can be a nightmare when you don’t have the mindset and tools to make it easier.

So many people struggle with money- they are overspending on things their family doesn’t need or doesn’t enjoy, which causes stress in their lives. But if your goal is financial freedom, it’s time to learn about a new budgeting system.

If you have a desire to:

  • Spend less than you make
  • Get out of debt
  • Save money faster
  • Become financially independent

Then, you are in the right place! Let how easy and simple zero based budgeting really is!

Decide what you want your budget to achieve: a zero-based budget forces you to think about what you want your money to do, rather than just accepting the status quo.

If you want to use zero based budgeting but aren’t sure where to start, this article will guide you through setting it up in an easy and effective way.

Zero Based Budget template is a zero budgeting plan that helps you break down your expenses into categories. It provides an easy way to create budgets and track the spending in each category over time.

What is zero based budgeting?

Zero based budgeting is a financial planning strategy where every dollar in the budget has a specific purpose. With this type of budget, it can be helpful for those looking to get their finances in order or who want more control over their spending.

A zero based budget is when you start from scratch every month and assign every dollar a job.

Income – Expenses = $0

You begin by calculating your income for the month, then subtracting your known expenses. What’s left is $0, which means you have to get creative with how you’ll spend the rest of your money.

You can use a zero based budget template to help make this process easier.

What are the benefits of using a zero based budget template?

Picture of a monthly budget for zero based budget

There are many benefits to using a zero based budget template.

Perhaps the most obvious benefit is that it allows you to see where every penny is going. This comprehensive view gives you a clear picture of your expenses and makes it easy to identify areas where you can cut back on spending.

In addition, using a zero based budget helps individuals worry less about their financial health. Since all living expenses are accounted for in the budgeting process, there is no need to panic if an unexpected expense pops up. This peace of mind can be very helpful when trying to stick to long-term financial goals.

A zero based budget template is also easy to follow. The basic plan can be executed without any difficulty, making it a great choice for people who want a simple way to manage their finances.

How to create a zero based budget template?

Picture of a notebook that says budget planning to create a zero based budget template

A zero based budget template can be helpful in tracking your money and achieving financial goals.

There are a variety of ways to create a zero based budgeting template, and no one size fits all approach. That is why we offer a zero based budget template in our shop that you can modify to your needs.

There are a few key things you’ll need to create your zero based budget template. The first is a list of your monthly income, expenses, and savings goals for the year. This will help you stay on track and plan ahead.

The next step is to individually itemize each expense and income. This may be time-consuming but it’s crucial in order to get an accurate picture of where your money is going.

After that, it’s important to track your spending and income on a monthly basis. This will help you see if you’re meeting your goals or not.

It is important to choose the proper zero based budgeting template for your needs.

What are the 5 steps in creating a zero based budget?

There are five steps in creating a zero-based budget. This system was made popular by Dave Ramsey.

We will quickly outline the five steps to make your first zero based budget. Then, we will go into detail on creating your own zero based budget.

  1. List your income
  2. List your expenses
  3. Subtract your income from expenses to reach zero
  4. Track your expenses.
  5. Make a new budget for the next month or pay period.

One way to ensure success by following a zero based budget is by taking small steps instead of making large changes all at once–this can be difficult for some people who are used to living paycheck-to-paycheck.

Another suggestion is to allow yourself some “fun money” so that you don’t feel too restricted while trying to adjust your spending habits.

By following these tips and using a zero based budgeting template, you can successfully get yourself back on track financially!

How to Create a Zero Based Budget

A picture of someone working their zero based budget.

Zero-based budgeting is a system of budgeting that has been gaining in popularity since the introduction of personal computers and spreadsheets. It encourages decision-making based on values and not numbers, which is important in a time when numbers are often used to make decisions.

Zero-based budgeting allows you to start with a clean slate and create your own vision of what the future looks like.

You will need to gather all of your financial information together, including your income, debts, and expenses.

Step # 1: List out your income

The first step in creating a zero based budget is to list out all of your income.

This should include job income, side hustles, rental properties, alimony, child support, and investment income. Once you have a complete picture of your income sources, you can start to make decisions about how to allocate your money.

It is important to decide how you plan to budget your money on a monthly basis, bi-weekly basis, or by paycheck.

Step #2: Tally up your expenses

Be sure to include any regular expenses you have as well, such as rent or mortgage payments, car loans, and credit card bills.

Think of all of the budgeting categories you need for absolutely everything.

This will help you track your spending more closely and make it easier to find areas where you can cut back. Some people recommend creating as many budgeting categories as possible, including for example:

  • Housing
  • Utilities
  • Food
  • Transportation
  • Entertainment
  • Health care

If there’s something that doesn’t fit neatly into a category, come up with a name for it that will help you remember what it is. For example, “clothes” or “misc.”

You’ll also need to factor in any debts you may have.

Step #3: Get your budget to zero

Once you have a full list of your expenses, it’s time to subtract that amount from your income. Then, figure out if you are close to zero.

This is where you will likely have to make adjustments.

There are two ways to get your budget to zero- either spend less than you make (aka cut spending) or make more money.

If you want to stay out of debt and save money, it’s important to do one or both of these things. It may be difficult at first, but with a little bit of effort, you can get your budget under control and start saving for the future.

Budgeting is an extremely important tool to have in your financial arsenal. It allows you to have more control over your money and can help you make more of it. By following a few simple steps, you can get your budget to zero and start saving for the future.

Step # 4: Track your expenses

In order to be successful with a zero based budget, you have to be willing and able to track your expenses. This means being mindful of every penny that goes in and out of your account – ALL month long!

By tracking your expenses, you’re ensuring that every penny goes into the right place. This enables you to see where your money is going and how you can save in specific areas.

Expenses tracking apps allow you to easily record, categorize, and analyze your spending. They let you see how much money you spend on different categories of items from groceries to travel and more. Some of the most popular apps are Simplifi, You Need a Budget, and Qube Money.

This also makes tax season less daunting because you’ll have a complete record of all of your transactions.

You can also use this information to refine a realistic budget that works for you.

Step # 5: Make a new budget for each month or paycheck

Creating a new budget every month is an important part of zero based budgeting. This helps ensure that you are always aware of your current financial situation and can make changes as needed.

It is best to create your budget before the month begins, so you have time to adjust as necessary.

A zero-based budget is a great way to get your finances in order. It can be tough to stick to, but it’s worth it because it forces you to pay attention and make adjustments.

This is why the budget by paycheck method has gained popularity in conjunction with the zero based budgeting system.

Tips to Make Your Zero Based Budget Successful

Picture of a budget and cash for tips to make your zero based budget successful.

It can be difficult to stick to a budget, but there are ways to make it happen.

Here are a few quick budgeting tips:

  • Make a list of your necessary expenses and stick to it.
  • Cut back on unnecessary spending.
  • Live within your means.
  • Find cheaper alternatives to your regular expenses.

In addition, here is what you need to make sure your money is spent where you want and not following the status quo.

You need to learn which payment type is best if you are trying to stick to a budget.

Know your End Goal

What do you want your money to do for you?

Too many times, we let life dictate how and where we want to spend money. Then, we are always chasing from behind.

To truly make your money work for you, decide on three core areas you want to spend your money. Then, make your budget reflect those values.

Understand the Flexibility of Zero Based Budget

Zero-based budgeting is a great way to stay flexible with your finances. There are no set rules to follow, and you can adapt as your life changes. The goal is to always be mindful of your spending and make sure that every penny counts.

Unexpected expenses are going to pop up from time to time, so it’s important to have some flexibility in your budget. That way, you can handle these unexpected costs without breaking the bank.

Put Most Important Expenses at the Top

When creating a zero based budget, it is important to start with the most important items and work your way down.

This ensures that you do not miss any essential expenses and that you are able to stick to your budget. It is also important to be realistic about what you can afford and to make sure that you are flexible in case of unexpected expenses.

Put in a Cushion or a Buffer

When starting a zero based budget, it is important to be realistic about what you can and cannot do.

Some people find it helpful to have a cushion in case of unexpected expenses, while others prefer to keep their spending as low as possible. It is important to find what works best for you and stick to it.

Additionally, remember that your goal should be to live within your means, not spend less than you make.

Look Ahead

When creating or following a zero based budget, it is important to be mindful of any upcoming events that may require more money.

This includes things like holidays, birthdays, and special occasions. If you know these events are coming up, you can plan for them in your budget and make sure you have the funds available.

Check out ideas for bill calendar strategies.

Sinking Funds

Picture of a jar with the various sinking fund categories on it.

One of the most important things to remember is that you need to plan for big-ticket items and one-off events. This can be done using sinking funds.

Sinking funds are special savings accounts that are specifically designated for planned expenses.

You put money into the account over time until you have saved enough to cover the expense. This allows you to avoid breaking your budget when something unexpected comes up.

Learn how to use sinking funds.

zero based budgeting Example

Picture of the zero based budget.

Zero based budgeting is a way of organizing your finances in which you spend money only on things that have an actual impact on your financial situation.

This method can help you stay mindful of how much you are spending and where it is going.

It can also help you to make better decisions about what needs to be paid off, saved for, or invested in.

Here is a basic zero based budget example:

Zero Based Budget template is a zero budgeting plan that helps you break down your expenses into categories. It provides an easy way to create budgets and track the spending in each category over time.

Can You Make a Zero-Based Budget With an Irregular Income?

Picture of a lady creating a budget

Zero-based budgeting is an excellent way to manage your finances when you have an irregular income.

Regardless of how much money you earn each month, you can create a budget that will help you save money and make the most of your income. With a zero-based budget, every penny has a purpose and you can be sure that you are making the most of your resources.

It is also helpful to “age” your money by at least one month. That means your April income will be paying your May bills.

The Best Zero Based Budget Templates and Apps

Zero-based budgeting is a methodology of budgeting that starts with the assumption that how much one has at the beginning of each period should be used to purchase only those things needed. This is different from the traditional budgeting practice of starting with how much one has at the end of the last period and using that as a basis for what needs to happen during the next period.

There are a number of zero-based budget templates and apps that are available on the internet. The following seven are some of the most popular:

1. Tiller Money

Tiller Money is a budgeting app that allows you to create a zero-based budget. This means that every dollar in your budget has a specific purpose.

It has a “Foundation Template” feature that allows expenses to be budgeted against goals in order to make sure the amount of money actually spent is at a minimum.

This allows you to create a zero based budget quickly and easily.

You can try Tiller Money for free for 30 days, and the annual cost is $79.

2. Simplifi by Quicken

Simplifi by Quicken is a budgeting app that takes a different approach to budgeting.

Rather than starting with your current income and expenses and trying to adjust them, Simplifi starts with your savings goals and works backwards. This can be helpful for those who have trouble sticking to a budget because it allows you to focus on your financial dreams rather than your current spending habits.

You can set up your own categories, limits, watchlist, and spending plan.

It offers all of the features of Quicken with the added convenience of being able to access it on your phone or tablet.

Another thing that makes Simplifi stand out is that it is ad-free (unlike Mint), which can be helpful if you are trying to stay focused while budgeting.

Enjoy your first 30 days free and then pay as low as $3.99 per month.

3. Qube Money

Qube is an app that helps you create intentional, smart spending habits.

With Qube, you have the freedom to manage your money with real purpose. Qube helps you stay on top of your finances by giving you a clear picture of where your money is going and how much you have leftover each month.

Qube Money is a budgeting tool that helps you manage your money by automatically ledger transactions and allowing you to divvy up your money into qubes. This makes it easy for you to see how much money you have in each category and click to spend.

Get started with Basic for free with 10 qubes. Upgrade to Premium for $6.50 per month.

4. YNAB

You Need a Budget (YNAB) is a popular method of budgeting that requires you to spend money from the previous month’s income. They stress “aging your money” to break the living paycheck to paycheck method.

Each month you start from scratch each month, accounting for all of your income and expenses.

YNAB is best known for its awesome support community and training.

It offers a free trial for 34 days, after which it costs $84 per year.

Best Zero-Based Budget Template For Debt Payoff

It is useful to make a debt payoff plan that starts from the zero level. This will allow you to track your progress and adjust your budget as necessary.

Using Tally is a great tool when paying off debt.

Time for you to Start with the 0 Budgeting Method

A zero based budget is a financial planning strategy where every dollar in the budget is assigned a purpose. This differs from traditional budgeting where the focus is on last month’s spending and last year’s income.

With a zero based budget, you start fresh each month and assign every dollar a job or responsibility. This way, you can ensure that your money is being put to its best use.

When you use a zero based budget template, you are able to track every dollar that you spend.

This comprehensive view gives you a clear idea of where your money is going and where you can cut back on spending. Additionally, using a zero based budget template makes it easy to see if there have been any areas where you could save money.

The best part is you are comfortable knowing that all of your living expenses are accounted for.

This means that you can spend money without worrying about jeopardizing your financial health.

Know someone else that needs this, too? Then, please share!!

Source: moneybliss.org

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About the series…

When most people talk about money management, they discuss tactics. Occasionally, you’ll encounter someone who elevates the discussion to strategy, rather than simply scattershot tactics.

But what’s missing from both conversations — both tactics and strategy — is a wider-lens look at how to become a better thinker; how to become a crisp, clear decision-maker.

How to think from first principles. How to better your brain. How to cultivate the wisdom to know the next move.

This series is an attempt to bring first principles thinking into the conversation around money. Welcome to the inaugural post.

[Quick recap] If you read the first issue of this series, you know I’m hyped about rethinking the FIRE philosophy into four pillars:

Financial psychology — This is the foundation of everything.

Investing — Let’s be honest: technically, you don’t need the “RE.” You can stop at “FI.” If you master your inner psychology and invest in your 401k, IRA and other brokerage accounts, you can live a wealthy and wonderful life. The “FI” is mandatory for everyone; the “RE” is optional.

Real estate — It’s a hybrid between owning an investment and running a business, so the “R” fits perfectly between “I” and “E.” Did someone say “mashup?”

Entrepreneurship — The last on the list because it’s the toughest, but this is where near-infinite potential lives. You’ll want to focus on F, I, and mayyyybe R first, before you tackle this tough cookie.

Financial Psychology

We recently re-ran one of my favorite episodes on the podcast: an interview with behavioral economist Kristen Berman, who states – among other things – that habits are overrated.

Wait … what? Habits are overrated? But … but … aren’t habits the cornerstone of, like, everything?

Nope, according to Berman. Habits are an excellent second choice.

Automation is more powerful than habits. The best upfront use of your time is to set up systems — e.g. automatic transfers and deposits. Habits are a fallback option for anything that can’t be automated.

Systems are likely to stick longer. Your automations don’t crack when you take a two-week beach vacation. Your habits, by contrast, might take the holidays off.

Systems rely on software. Habits depend on humans.

And in the end, the robots always win.

Investing

Successful investors tend to fall into two camps: those who are great at making returns, and those who are great at keeping their returns.

Those who are great at making huge returns are the ones who risk it all; they bet big on a handful of individual stocks, or they bought crypto in huge quantities during the early days, and their speculation paid off.

Our collective sense of survivorship bias applauds them.

But their risky behavior doesn’t stop. They double down again and again, until eventually they lose much of their returns.

Easy come, easy go.

By contrast, the investors who are great at keeping their returns often invest with a methodical, long-term, wide-lens approach.

It takes them decades, rather than mere years, to build their wealth. But once built, they tend to be more adept at keeping it.

SPOTLIGHT ON…

What tools are kick-ass at financial automation?

One of my favorites is Acorns, which automatically rounds up your purchases and invests the difference.

If you spend $1.73 on a coffee (wait, can you still get coffee for $1.73?? okay fine, if you spend $1.73 on … um … a bag of peanut M&M’s?), the tiny robots will round your purchase up to $2 and invest the difference, $0.27, into your Acorns account.

You can choose your favorite investing style (aggressive, moderate, conservative), or double the round-ups if you’re feeling spicy.

My personal tally? Welp, here it is:

So if I’m spending too much, or too often … at least I’m investing, too.

Check out Acorns here (you’ll also get a $5 bonus).

Real Estate

Many people have some variation of the following question:

“I’d like to buy an investment property. And I’d like to _____ [insert personal use here] _____ when it’s not rented out.”

For example, “I’d like to …”:

  • … use it as a summer/winter home.
  • … use it for a month or two every year.
  • … have my aging grandparents or parents live there.
  • … turn it into a home office temporarily or seasonally, like during the summers.
  • … let my kids live there after they move out.
  • … provide a home to my brother or sister while they’re getting back on their feet.

That’s fantastic. But that’s not an investment property.

There’s a difference between buying an investment property vs. monetizing a property while it’s not in use.

The former requires cold, hard math. Your personal preferences don’t enter the picture. You make spreadsheet-based decisions with Spock-like reason.

The latter’s existence is based on your personal preferences. Every decision, from location to layout to square footage, is influenced by your homeownership ideals.

On the surface you’re performing the same act. You’re purchasing a property, and then renting out said property. You’re advertising the vacancy, collecting rent checks, performing routine maintenance and repairs, and paying taxes as a landlord.

But there’s a huuuuge difference between the decisions you make when you’re selecting each type of property.

Many homebuyers get smacked upside the head with problems when they don’t understand which set of objectives they’re chasing.

They take their cues from the wrong group. They use the wrong formulas. They play the wrong game, follow the wrong rules, track the wrong scoreboard.

The home they purchase ends up being the wrong candidate for the job.

And that’s a six-figure mistake.

In our course, Your First Rental Property, we teach our students how to clarify exactly what they want in an ideal property, so that they never take cues from the wrong voices.

Entrepreneurship

Let’s keep this simple:

  • “Do I need business cards?”
  • No.
  • “Do I need a business plan?”
  • Meh. Maybe something that’s simple enough to scrawl on a napkin.
  • “Do I need a suit?”
  • Why, are you a funeral director?

Stop playing business. You’re not a little kid on a playground; starting a business by printing business cards is a grown-up version of make believe.

No matter what type of business you’re running — whether you’re dog-walking for extra income or freelance coding for the local university — you need two things:

  • Either a product or service
  • Someone who thinks your product or service is valuable enough to purchase

That’s it. Forget the business cards. Focus on (1) figuring out what product or service you can offer the world, and (2) telling the world* about it.

*You’ll want to narrow down “the world” into something more targeted. Like, tell Bob. Especially if Bob has a dog that needs walking, or if Bob hires freelance coders for the local university.

Wahoo!! You’ve finished reading Issue #2 of the First Principles series!

I hope this series inspires you to think, learn and take massive action.

Click here if you want future posts like this straight to your inbox with more thoughts, ideas and insights on a new take on FIRE.

See you soon!

Source: affordanything.com

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Now we’ll rank the top mortgage lenders in Wisconsin, based on the most recent year’s completed loan volume.

These are the largest lenders in The Badger State based on available HMDA data for 2021. Collectively, more than 800 lenders funded $70 billion there during the year.

Interestingly, it appears that Wisconsinites are big on using their own local companies instead of larger, national brands.

At least when it comes to home loans, as the top three mortgage companies are all headquartered in the state.

Read on to see which company led the way in mortgage origination last year in Wisconsin.

Top Mortgage Lenders in Wisconsin (Overall)

Ranking Company Name 2021 Loan Volume
1. Summit CU $2.7 billion
2. Associated Bank $2.4 billion
3. UW Credit Union $2.4 billion
4. Rocket Mortgage $2.3 billion
5. Wells Fargo $2.0 billion
6. Chase $1.9 billion
7. U.S. Bank $1.8 billion
8. Landmark CU $1.8 billion
9. Fairway Independent $1.7 billion
10. Johnson Bank $1.6 billion

As noted, a Wisconsin-based lender topped the charts in 2021, per HMDA data from Richey May.

It was none other than Madison-based Summit Credit Union, which funded $2.7 billion in the state of Wisconsin last year.

In second was Green Bay-based Associated Bank with a close $2.4 billion, followed by Madison-based University of Wisconsin Credit Union (UW Credit Union) with $2.4 billion.

This is interesting for a few reasons – one being that the top three are all Wisconsin-based, and the other that the top three consist of two credit unions and a bank.

That bucks the trend of nonbank mortgage lenders ruling the roost in many other states throughout the nation.

In fourth was the nation’s top mortgage lender, Rocket Mortgage, which funded $2.3 billion. They also happen to be situated fairly close to Wisconsin.

And in fifth was San Francisco-based Wells Fargo with $2.0 billion, formerly the top lender in the United States.

The rest of the top 10 included Chase, U.S. Bank, Landmark Credit Union (New Berlin, WI), Fairway Independent Mortgage (Madison, WI), and Johnson Bank (Racine, WI).

All told, six of the top 10 mortgage lenders in Wisconsin are based in the state, which is pretty impressive.

That might lead all other states in terms of the number of homegrown companies in the top-10 list.

Top Wisconsin Mortgage Lenders (for Home Buyers)

Ranking Company Name 2021 Loan Volume
1. Associated Bank $1.2 billion
2. Fairway Independent $1.1 billion
3. Chase $878 million
4. U.S. Bank $649 million
5. Summit CU $640 million
6. UW Credit Union $633 million
7. Johnson Bank $610 million
8. Wells Fargo $608 million
9. Rocket Mortgage $467 million
10. Newrez $442 million

If we look at home purchase loans only, Associated Bank took the top spot with $1.2 billion funded, followed by nonbank lender Fairway Independent Mortgage with $1.1 billion.

In third was NYC-based Chase with $878 million, trailed by U.S. Bank with $649 million and Summit CU with $640 million.

Others in the top-10 list for home buyers included UW Credit Union, Johnson Bank, Wells Fargo, Rocket Mortgage, and Newrez.

So when it came to purchase lending, five of the top 10 were Wisconsin-based. Still pretty impressive.

Generally, consumers tend to flock toward local companies when buying a home.

Top Wisconsin Refinance Lenders (for Existing Homeowners)

Ranking Company Name 2021 Loan Volume
1. Summit CU $1.8 billion
2. Rocket Mortgage $1.8 billion
3. UW Credit Union $1.7 billion
4. Wells Fargo $1.4 billion
5. Landmark CU $1.4 billion
6. Associated Bank $1.2 billion
7. U.S. Bank $1.1 billion
8. Chase $968 million
9. Johnson Bank $907 million
10. Freedom Mortgage $830 million

When it came to mortgage refinances, amazingly a Wisconsin-based lender still took the top spot, but just barely.

Summit CU funded roughly $1.8 billion in refis last year, just enough to beat out Rocket Mortgage’s similar tally.

UW Credit Union took third with $1.7 billion, followed by Wells Fargo with $1.4 billion and Landmark CU with $1.4 billion.

The rest of the best included Associated Bank, U.S. Bank, Chase, Johnson Bank, and Freedom Mortgage.

Once again, five of the top 10 were Wisconsin-based mortgage lenders, another feat for the home team.

Top Mortgage Lenders in Milwaukee

Ranking Company Name 2021 Loan Volume
1. Landmark CU $1.4 billion
2. Wells Fargo $954 million
3. Associated Bank $943 million
4. Chase $902 million
5. Newrez $662 million
6. Fairway Independent $638 million
7. UW Credit Union $591 million
8. Rocket Mortgage $591 million
9. U.S. Bank $560 million
10. Summit CU $524 million

Top Mortgage Lenders in Madison

Ranking Company Name 2021 Loan Volume
1. Summit CU $1.6 billion
2. UW Credit Union $1.5 billion
3. Fairway Independent $522 million
4. The Park Bank $394 million
5. Truist $349 million
6. Thompson Kane $288 million
7. State Bank of Cross Plains $278 million
8. Oregon Community Bank $254 million
9. Old National Bank $249 million
10. Rocket Mortgage $233 million

The Best Wisconsin Mortgage Lenders (by Customer Ratings)

Now let’s look at the top-rated Wisconsin mortgage lenders based on actual customer reviews, as opposed to mere loan volume.

While Summit CU is top overall, it’s hard to find mortgage-related reviews for credit unions. The same goes for banks, as they offer a variety of different services other than home loans.

If we consider mortgage lenders only, A+ Mortgage Services, Inc. out of Muskego has the best rating on Zillow, a 4.99/5 from over 400 reviews.

Several other Wisconsin-based lenders have 4.98/5 scores, including Waterstone Mortgage Corp., McGlone Mortgage, and Inlanta Mortgage.

Not far off is Fairway Independent Mortgage (4.95/5), Homefinity (4.95/5), and Go Mortgage (4.90/5).

Meanwhile, U.S. Bank has a 4.98/5 on Zillow, Wells Fargo and Chase have a 4.95/5, and Rocket Mortgage has a 4.48/5.

So the big guys and the local companies are all pretty well regarded. But take the time to research companies, ask for referrals from friends/family, and obtain multiple rate quotes.

Doing so should boost your chances of having a positive home loan experience.

(photo: Gary Todd)

Source: thetruthaboutmortgage.com

Apache is functioning normally

Thomas Short

Posted on: April 19, 2018

Today’s housing market is red hot. Homes are hitting record prices, and a nationwide shortage of housing isn’t making it easier.

On top of that, most loan programs have specific standards for deciding the home buyers they accept. For most home buyers, this might mean they need a higher credit score or larger downpayment.

Fortunately for VA members, there are hardly problems in today’s market. The VA loan, the main mortgage product available only to eligible members, has plenty of benefits that help home buyer’s in today’s market.

Here are a few reasons why a VA loan can help you get into a new home:

Check today’s VA loan rates.

Lenders are willing to take on more risk

Risk is a big part of the job for lenders, and it’s part of the reason some mortgage applications are rejected.

Lenders often evaluate risk by looking at the:

  • FICO score, or credit score
  • LTV, or loan-to-value of the loan
  • DTI, or debt-to-income ratio

Credit scores

Your credit score is straightforward, but most loan programs require a minimum score. FHA loans, which are well-known for having relaxed standards, require a minimum score of 620. Conventional loans have even higher credit score standards.

VA loans technically have no minimum credit requirement – part of the benefit of it being guaranteed by the VA. Loans with credit scores as low as 580 can get accepted, depending on the lender.

LTV

LTV is the portion of the loan that you’re financing. For example, if you’re buying a home and make a 10 percent downpayment, your LTV would be 90.

Because LTV represents how large of a downpayment is made, it’s an important number to track. According to Ellie Mae, the LTV of all closed loans in March was 79, meaning an average downpayment of 21 percent.

However, VA loans had much different numbers. The average LTV for VA loans was 98, meaning 2 percent down.

This is only possible because the VA doesn’t require downpayments, unlike other mortgage products. In a housing market where home prices may seem out of reach, being able to finance the entire home can make purchasing a home much more affordable.

DTI

Deb-to-income is the ratio between how much debt you have and how much of your income it takes. When lenders evaluate potential home buyers, they tally all their debt (from car payments to credit cards) and put it against their income.

After, lenders take would-be monthly payments of a loan and add it to the DTI calculation. As a result, DTI comes with two numbers: the first which is without a mortgage, and the second which is with a mortgage.

For closed loans in March, the average DTI was 26/39, showing that after the mortgage was approved, the average homeowner’s debt was 39% of their income. For closed VA loans, the average DTI was 26/42, meaning lenders allowed VA borrowers to take on more debt than non-VA borrowers.

All three of these factors were more relaxed for VA loan applicants, showing that it’s easier to get approved for a mortgage with a VA loan than other products – an important edge in a competitive housing market.

Click to get connected with multiple VA lenders.

Lower mortgage rates

On top of the hot housing market, mortgage rates continue to increase. This forces monthly payments higher, and it pushes some homes out of affordability.

VA members get another benefit here because VA loans tend to have the lowest mortgage rates out there. In March, the average VA loan had a rate of 4.50%. The next lowest, conventional loans, had an average rate of 4.72%. That’s a huge difference, especially when spread over 30  years.

These low rates help keep homes affordable, and it gives VA home buyers more houses to choose from when they shop. With low housing inventory in most areas, this is a helpful advantage.

Buying fixer-uppers

Not all homes on the market are move-in ready. With a VA renovation loan, VA home buyers can purchase these homes and get a loan to fix the homes up.

The VA renovation loan allows home buyers to borrow up to $35,000 on top of the value of their VA loan. This money goes toward repairs and improvements, making sure that the home fits the VA’s standards.

Fixer-uppers take more time to move in to, but many home buyers in today’s market can’t afford to buy a home and fix it. They also struggle to find financing to pay for both.

There are plenty of benefits with a VA loan, and many of them help home buyers in today’s competitive market. With summer just around the corner, many people are going to be looking for a new home – and a VA loan might give them the best chance at finding the right place.

Check your VA loan eligibility.

Source: militaryvaloan.com

Apache is functioning normally

If you’re struggling to save enough for a home down payment, a 401(k) loan might look like a quick and easy solution, especially if you have more money stashed in that account than anywhere else.

Among Americans with retirement accounts, including 401(k)s, the median account value was $65,000, according to the Federal Reserve’s Survey of Consumer Finances, based on the most recently available 2019 data. The median value of transaction accounts, such as savings, checking and money market accounts, was $5,300.

Many employer plans allow 401(k) loans, and the upsides can be attractive: Essentially, you’re borrowing from and paying interest to yourself. The loan generally doesn’t count as debt when lenders calculate your debt-to-income ratio.

But borrowing from retirement savings has downsides, and some financial planners advise against it, period.

“I generally hate the idea of people borrowing from a 401(k) to purchase a home, given the possible risks,” says JP Geisbauer, a certified financial planner and principal of Centerpoint Financial Management in Irvine, California.

Yet Nathaniel Moore, a certified financial planner and president of Agape Planning Partners in Fresno, California, says he understands why someone would be tempted. “If it means going from paying high rent to getting into a place you own, I get it,” he says.

Here’s what to consider if you’re thinking about it.

Rules for borrowing

Most 401(k) plans permit loans, but federal law doesn’t require them to. Log on to the website where you track your 401(k) to find loan information or contact your employer’s human resources department or plan administrator.

Some loan terms vary among employer plans, but all plans must abide by federal rules:

  • Loans are capped at $50,000 or 50% of the vested account balance, whichever is less —  or up to $10,000 if 50% of the vested balance is less than $10,000. If your balance is $200,000, you may be able to borrow up to $50,000. If your vested balance is $70,000, the maximum loan amount would be $35,000.

  • You have a set amount of time to repay the loan plus interest; otherwise, it will be considered a distribution or withdrawal. You’d pay income tax on a distribution and, if you’re younger than 59 1/2, an additional 10% tax penalty. The plan sets the interest rate, typically 1% or 2% above the prime rate. 

  • Generally, 401(k) loans must be repaid in five years, but a plan can give more time to repay a loan for purchasing a primary home. Payments must be made at least quarterly over the loan term. 

  • If you get fired or quit your job, the plan can require you to repay the full outstanding loan balance. If you can’t pay, the unpaid amount will be subject to taxes and, if you’re under 59 1/2, the 10% tax penalty. You can avoid the tax implications by rolling over the outstanding balance to an IRA or another eligible plan by the next annual federal tax filing deadline. About 4 in 10 Vanguard plans allowed participants to continue repaying loans after leaving their jobs in 2021, according to a 2022 Vanguard report. 

Risks of using a 401(k) loan

Even if you’re convinced a 401(k) loan is the way to go, it’s important to understand the risks at the outset.

One is the potential tax burden if you can’t make the quarterly loan payments or leave your job and can’t repay the outstanding balance on time.

You could also fall behind on saving for retirement. Besides losing potential investment gains on the borrowed money, the loan repayments could crimp your ability to contribute to your 401(k). In fact, some plans don’t allow employees to make regular contributions until the loan is paid off, says AnnaMarie Mock, a certified financial planner with Highland Financial Advisors in Wayne, New Jersey. Pausing contributions would be especially costly if you missed out on matching contributions from your employer.

But there’s another less-obvious risk, which Moore finds particularly troubling: Once you’ve taken one loan, it gets easier to tap into it again. “You’re reprogramming your mindset to where now the 401(k), which was designed to be protected and provide income in the future, is accessible,” he says.

Loan costs, repayment and alternatives

Take these steps if you’re thinking about borrowing from your 401(k):

Check your plan’s rules for 401(k) loans

Get details about the interest rate, fees, payment amounts and how long you’d have to repay the loan.

Calculate whether you can afford loan payments

Tally the loan payments along with other obligations.

“That 401(k) loan is going to get taken out of your salary right from the start, so make sure that with the new home expenses, your lifestyle expenses and saving, you’re not operating at a deficit each month,” Mock says. If the loan payments are unaffordable, she says, “the only other place where you’re going to be able to support that lifestyle would be from credit card debt, which is very expensive.”

Learn what happens if you leave your job

If the plan requires paying the outstanding balance in short order — as most plans do — strategize how to repay that sum to avoid tax consequences.

Consider alternatives

Finally, check out other options to help buy a house, such as low-down-payment mortgages and your state’s first-time home buyer programs, Mock advises. Perhaps one of those could eliminate the need for a 401(k) loan.

Some conventional loans have down payments as low as 3%. FHA loans, insured by the Federal Housing Administration, have down payments as low as 3.5%. And if you’re a service member or veteran, you may qualify for a zero-down-payment VA loan backed by the U.S. Department of Veterans Affairs. USDA loans for rural home buyers also don’t require down payments.

Still want a 401(k) loan?

Moore offers these tips:

  • Take only what you need, which may be less than the maximum you can borrow.

  • Be aggressive with repayment. Just because you have a certain number of years to repay the loan doesn’t mean you have to use all that time. “Try to pay it back as fast as possible.”

  • Beware of the tendency to borrow again. “You don’t want to get in the habit of looking at your 401(k) like a piggy bank.”

Source: nerdwallet.com