Financial Advice

Home Staging Tips From the Experts

Do you need to sell fast to save for your next house? According to Professional Staging, a whopping 81 percent of buyers agree that home staging makes it easier to visualize the property for sale as their future home. Not to mention that after staging, a house will spend approximately 73 percent less time on the market.
 
Home staging is a great way to ensure your house is appealing to buyers and will sell quickly. But that doesn’t mean you have to hire a professional home stager. Although it can seem overwhelming, you can still stage your house effectively on your own. We asked the experts for their best home staging advice. With these professional tips, you’ll know exactly how to guarantee buyers will see themselves in your home.

Declutter

An experienced Realtor, Barry Richards, emphasizes how important decluttering is for house staging. Whether it is too many bold or personal decorations hanging from the walls or too much furniture, having a simplified environment is going to make it easier on the buyer. Richards explains this is often the case because “bold colors and unique decorations in a home will stand in the way of buyers with different tastes.” You want to ensure your tastes and possessions aren’t going to make it difficult for the buyer to “take emotional possession of a home.” Buyers want that freedom to envision themselves in the home, and it is easier to do that with “neutral colors and lack of personal pictures and possessions.” Give the buyer room to imagine!

Stick to the Basics

Realtor Michael Kelczewski states that a house presentation shouldn’t be “busy.” He expands, “Staging supports the creative envisioning of a prospective buyer. The objective jogs home ownership imagination, so attempt to place objects or furniture accordingly. Common mistakes over-stage a home, creating a “busy” presentation. I suggest sticking to the basic furniture, keeping attention to the property.” Having a simple presentation will, as Kelczewski explained, allow buyers to imagine what they would do with the house if they chose to go through with the purchase. You don’t want to have such a “busy” presentation that the only thing a buyer can see is what you have done with the home.

Identify the Most Important Rooms

Professional home stager and Realtor, Robin Leigh advises potential sellers to realize that “the most impactful rooms to stage for maximum appeal and scalability are the main rooms of the house, the living and dining rooms, the master bedroom and bath, and the kitchen and nook areas.” Leigh also explains that “the kitchen can get away with a minimal amount of accessories and bar stools at the counter; it just shouldn’t be left bare.” And most importantly, a seller should “stage the first rooms a buyer walks into. That is where they connect to the property.” First impressions go a long way with buyers. If they fall in love with the first rooms they see, it is more likely they are going to connect with the rest of the house.

Remember the Exterior

Evan Roberts, a Real Estate and Property Manager with Dependable Homebuyers, tells us to focus on the exterior and “curb appeal.” Roberts’ experience has shown that the exterior “appeal has a high impact on sales price, and staging the front of the house often costs the least.” He advises sellers to “spread new mulch in the garden, set up rocking chairs on the porch,” and add a ‘welcome home’ sign somewhere in the front yard to create “a welcoming start to a buyer’s showing.” Roberts ends by telling sellers to consider setting up flower planters on either side of the front door. He also thinks it’s an added touch if the color of the flowers matches the front door because it “adds a lot of character to a home’s curb appeal.”
 
Real estate professional Tara Nelson agrees that the exterior of the home is just as important as the interior. She specifically advises sellers to make the porch inviting, clean up the yard, and make the outside of the house feel homey.

Remove Personalized Wallpaper

Professional property stylist Karen Gray-Plaisted explains a specific and common mistake among sellers is not removing personal wallpaper. Although it may be a cute addition to your home, it most likely isn’t going to resonate with potential buyers. Buyers want to personalize things such as the wallpaper by themselves. That might also be a roadblock in their decision process because it screams “extra work” for them if they do decide to buy the property. What we are seeing time and time again from the experts is that depersonalizing your home to an extent is an essential home staging tip. 

Don’t Forget the Fireplace (If Applicable)

Jeff Miller, co-founder of the AE Home group real estate team in Maryland, advises home stagers to consider the fireplace. He says “everyone who tours your home sees [a room with a fireplace] as a gathering spot for all their friends and family. You need to make this room look inviting so that they can imagine making future memories in your home.” Miller explains his “go-to staging tool for the mantel is candles. You can buy a set of varying heights to add dimension for a low cost.” He also adds that finding a candle that matches the style and color of the room’s decor is a way to create “a consistent pallet.”

Make the Bathroom a Priority

Jessica Klingbaum, a real estate agent in New York City, draws our attention to how important the bathroom is to the selling of a house. You can’t, or more so you shouldn’t, go through the home staging process without making sure your bathroom looks pristine. Bathrooms can quickly and easily turn someone either on or off to the house, so it is important to take care of the grimy work. No one wants to buy a house with a less than spotless bathroom. “Re-caulk the tile, scrub the entire bathroom from top to bottom to make it sparkle and shine (as much as possible), reglaze your bathtub and/or tile, etc.” Anything you can do to make the bathroom more appealing is going to be worth it. Potential buyers will notice. 

Consider Introducing a Scent (Without Going Overboard)

Klingbaum also adds that it is important for your house to have a good smell that puts the buyer at ease and creates a homey atmosphere. She recommends using essential oils to create an immediate gratification the second the potential buyer walks through the door. This would also be a helpful tip to implement throughout the rest of the house, not just in the front room. The bathroom, for example, would be another perfect place to have some kind of diffuser or candle to make the room smell pleasant and seem cleaner and fresher. However, make sure you don’t have so many smells that it becomes overwhelming. Stick with the same subtle fragrance, and place it sparingly throughout the rest of the house.

Create a Calm Atmosphere

George Roser, Broker and Real Estate Agent, tells us another way to create an inviting atmosphere is to play soft music. Roser explains that it “not only sets a relaxing mood, but it helps to drown out any unexpected noise that may appear outside.” This would help keep the potential buyer focused and unaffected by possible distractions. But as Roser suggested, make sure it’s soft music; you don’t want to make it seem like you’re trying too hard or make it difficult to hear. The art of subtlety goes into almost every home staging tip. 

Let Less Be More

In the event that your home is already vacant, Realtor Bill Golden explains “staging can help, but it isn’t always necessary,” especially if the only way to fully stage the home is to poorly furnish it in a hurry. If you don’t have enough furniture and belongings to fill the home, consider using that to your advantage by focusing on other parts of the home, such as freshly painted walls or shiny wood floors. Allowing the home to be less “busy” will accentuate the other less obvious features of your home and create a more spacious area. This will also give buyers more of an opportunity to imagine their own furniture and belongs in the house. Lastly, just because your house is vacant doesn’t mean you can’t use the above tips to help stage your house just as effectively as a fully furnished house.

We hope these tips give you an idea of what home staging tips are going to be the most successful in selling your home. Once you have sold the old house and are starting to prepare the new one, consider looking into the best home warranty companies to protect your systems and appliances. This will not only be useful to protect your home, but if you ever have to home stage again in the future, you won’t have to worry about replacing anything because your systems and appliances will be covered. So, be aware of this and the other most worthwhile home investments and purchases because it will definitely save you in the long run. 

This article by McCall Robison first appeared on Best Company and was distributed by the Personal Finance Syndication Network.

The post Home Staging Tips From the Experts appeared first on Personal Finance Syndication Network.

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Financial Advice

Rest Home or Medical Alert System: The Better Use of Money

The older you get, the more likely you’ll need someone to take care of you. This presents a slew of different challenges, even financial complications. You might ask yourself any number of questions: “Should I pay to stay in an assisted living home?” “What about my independence?” “What about a medical alert system?” “What are the benefits of that?” If you’re not sure which option is right for you, here are a few important factors to consider:

Which Option Is More Cost Effective?

According to our research at BestCompany.com, top-rated medical alert companies typically charge a maximum of approximately $50/month for their most expensive programs. Some companies will occasionally charge an activation fee or equipment fee, but top-rated companies such as Medical Guardian and MobileHelp do away with those to give customers a consistent and affordable price.

In comparison, a nursing home is much more expensive. According to a study by MetLife in 2012, the average cost of a private room within a nursing home was $248/day! Now, there are less expensive options like assisted living and adult day care. According to similar studies, assisted living costs an average of $3,022/month and adult day care can be up to $100/day. It doesn’t take a master’s degree in mathematics to conclude that a medical alert system is more cost effective, but let’s quantify this in order to put it in perspective. We’ve broken the comparison down for you in the following infographic:

When you compare the two programs, the obvious choice regarding cost is a medical alert system.

But Is It the Best Choice for Me?

That depends. Just because a medical alert system is far less expensive doesn’t mean that it’s the ideal choice for everyone. Nursing homes and assisted living homes will usually offer additional services such as housekeeping, meal prep, recreational activities, and on-site medical assistance. You won’t get any of that from a medical alert system, except for a quick, on-hand response tool for medical emergencies. A medical alert system is recommended for an individual that still has the capacity to live independently.

Ultimately, this is up to you. Before you make a final decision, it’s important to assess your health and independence needs, and also to shop around.

This article by Best Company first appeared on Best Company and was distributed by the Personal Finance Syndication Network.

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Financial Advice

What Credit Score Do I Need to Buy a House?

When the time comes to buy a house, the first thing on your to-do list should be to obtain a copy of your credit report and credit score in order to get a clear picture of where you stand.

Your credit score will be a determining factor in the financing of your new home. Lenders look at your income, debt, and assets or savings when making a lending decision, but it’s your credit score that will ultimately determine whether you get approved for financing.

Lenders will look at your credit score as a measure or your creditworthiness, and your score will also determine the interest rate you’ll qualify for, which will directly affect your monthly mortgage payment. Because your mortgage will likely be the largest loan debt you incur during your lifetime and the term of the loan will be either 15 or 30 years, you’ll want to secure the lowest possible interest rate.

While you may still qualify for a loan even with a lower credit score, that score will equate to a higher interest rate and/or less favorable loan terms. Furthermore, lending requirements change with the economy. For instance, restrictions were drastically tightened after the housing market collapse of 2008 and lenders were rarely extending loans to anyone with a credit score under 720.

Let’s take a look at what qualifies as a good credit score and how different credit scores are used to determine the type of loan and rate borrowers can expect.

Credit score ranges

Most credit score algorithms — including the most commonly used FICO score, and the lesser-used VantageScore 3.0 — range from 300 to 850. The credit score average in the United States varies, but a score of 700 or above is generally considered to be good. Within the range of credit scores, there are different categories, ranging from bad to excellent:

  • Excellent Credit: 750+
  • Good Credit: 700-749
  • Fair Credit: 650-699
  • Poor Credit: 600-649
  • Bad Credit: below 600

These ranges offer a guideline, but each lender determines its own definition of excellent, good, fair, poor, and bad credit scores and how those are used for loan eligibility. For instance, one lender may approve applicants with credit scores of 680 or higher, while another may only approve those with scores over 720. Regardless of those definitions, borrowers will pay higher interest rates the further their scores dip below 700.

Different loans require different scores

Loan eligibility will also depend on the type of loan you’re applying for — for instance, VA loans typically require a minimum score of 620. For an FHA loan, borrowers must have a credit score of at least 580. Laxer credit requirements are based on the fact that FHA loans are designed to assist first-time home buyers by making it easier to qualify and by requiring a down payment of only 3.5 percent. While borrowers with lower scores may qualify, the down payment requirement goes up to 10 percent for borrowers with scores under 580.

USDA loans, designed for borrowers in rural areas, require a minimum credit score of 640. As an added benefit, both USDA and VA loans require zero down payment, allowing applicants to finance up to 100 percent of the price of their home.

Conventional loans, which require 20 percent down in order to avoid PMI (private mortgage insurance) usually require a credit score of 620 or higher. Jumbo loans — typically defined as any loan for more than $453,100 require a credit score of at least 700. If borrowers meet the credit score requirement, they are eligible to put only 5 percent down as opposed to the standard 20 percent.

Qualifying for a home loan with poor credit

If your credit score is lower than 580, it doesn’t necessarily mean you can’t get a loan, but it will be more challenging. Following these three tips will increase your chances of qualifying:

  1. Provide additional proof of credit responsibility. Particularly when your credit score is low, lenders will want to see plenty of documentation to prove that you can pay your mortgage and other bills on time, and that you are capable of saving enough money to pay down other debts. Before you begin the loan application process, you’ll want to gather the proper documentation: pay stubs, bank statements, tax returns for the past year, W2s, and investment or retirement account statements.
  2. Apply with a co-signer. If you are unable to qualify for a mortgage loan on your own, getting someone with good credit to co-sign can be a good option because it will significantly increase your chances of getting a home loan. It’s important to remember, however, that if you default on your loan, it will also negatively impact your co-signer’s credit.
  3. Repair your credit ahead of time. Of course, the best option is to clean up your credit well before you begin applying for a home loan. Working with a reputable credit repair specialist will enable you to check credit for free. Credit repair specialists can also provide you with a complete credit report evaluation and advise you on the necessary steps to improve your score. Often, loan applicants find that they can make positive strides in improving their credit faster this way than by trying to fix credit on their own, or just waiting for negative items to disappear.

Buying a home is an exciting step. Determining the credit score you need to buy a house is just as crucial as the other momentous details, such as saving for the house and deciding where to live. Even if credit issues are part of the equation, it’s important to understand that there are still options to help you secure the financing you need to make home ownership a reality. Once you have the credit worries out of the way, you can start tackling other things like unpacking and staying organized after moving, home maintenance, and home budgeting. There are so many exciting steps to look forward to after you get a handle on what credit score you need to buy a house. 

 

This article by Best Company first appeared on Best Company and was distributed by the Personal Finance Syndication Network.

The post What Credit Score Do I Need to Buy a House? appeared first on Personal Finance Syndication Network.

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Financial Advice

The Reason Housing Confidence Is Hitting Record Highs

As millennials begin reluctantly crossing the bridge from youth into adulthood, conversations about buying a home become more and more frequent. Concerns about the cost of rental fees and general living expenses –– especially in expensive metropolitan cities –– are high enough to convert even the most devoted of apartment dwellers.

As more young people increasingly trade in their skyline views and landlords for a mortgage and some backyard space, housing confidence is at an all-time high. But how can we quantify something as subjective as confidence? Enter the Housing Confidence Index.

The Housing Confidence Index

Each month, the Federal National Mortgage Association –– commonly known as Fannie Mae –– conducts the National Housing Survey (NHS). The NHS is the first scientific study of its kind, used to create a systematic analysis of current consumer views about the state of the housing market.

In this survey, representatives from Fannie Mae contact 1,000 individuals at random to ask over 100 live survey questions. These questions are wide ranging and cover topics including personal finance, housing, and job security. The results of the survey are compiled to determine the Home Purchase Sentiment Index (HPSI), referred to colloquially as the Housing Confidence Index. These results are presented in the form of yes-or-no beliefs statements with corresponding percentages:

  • I believe it is a good time to buy
  • I believe it is a good time to sell
  • I believe home prices will go up
  • I believe mortgage rates will go down
  • I am not concerned about losing my job
  • My household income has increased in the last 12 months

At first glance, these statements and their results may not seem particularly scientific, but remember that this survey is not intended to report on the state of the actual housing market, but rather the state of consumers’ confidence in it. Several mortgage, lending, and real estate companies –– including Zillow –– have attempted to follow in Fannie Mae’s footsteps by creating their own version of this survey, though none have succeeded in engineering something quite as widely used or impactful.

The Housing Confidence Index, April 2018

The results of the April HCI rose 3.4 points to 91.7 percent, the highest rating ever, and up 5 points from April in 2017. Here are the individual results of the April 2018 survey, as reported by Fannie Mae:

  • The net share of Americans who say it is a good time to buy a home decreased 3 percentage points to 29 percent.
  • The net share of those who say it is a good time to sell rose 6 percentage points to 45 percent, reaching a new survey high.
  • The net share of Americans who say home prices will go up increased 7 percentage points to 49 percent in April.
  • The net share of those who say mortgage rates will go down over the next 12 months increased 4 percentage points to 48 percent.
  • The net share of Americans who say they are not concerned about losing their job increased 5 percentage points to 76 percent in April.
  • The net share of those who say their household income is significantly higher than it was 12 months ago rose 1 percentage point to 18 percent.

Across the board, consumer confidence in housing rose from March to April, with the exception of one category: Americans who say it is a good time to buy, which dipped by 3 percentage points. It would be fair to wonder how housing confidence can be so high when an increasing number of people feel that it isn’t a good time to buy a house, but these attitudes have many variables attached to them. In this case specifically, we might be able to connect increasing apprehension to purchase a home with rising housing prices, which also correlates directly with the growing belief that it’s a good time to sell; as with the housing market itself, this survey is cyclical.

What Increased Housing Confidence Means for Millennials

From March 2017 to March 2018, home prices in the United States spiked by 7 percent, the biggest bump in four years. That means that home prices are increasing at a much greater rate than income levels. On its own, the Housing Confidence Index growth may seem like a good thing, but it has its fair share of potentially negative implications –– especially for millennials.

Millennial homeownership rose for almost all of 2017, but for the first quarter in 2018 it took a hit. A fiercely competitive market, limited inventory, and increased seller confidence has led to skyrocketing housing prices. Millennials, who often have less capital saved due to the aforementioned high cost of living, can be losers in this market. In addition, they are often first time home buyers, who lack the experience –– and the earnings from selling a first home –– to adequately keep up with some of their older competitors. It certainly doesn’t help that millennials want to stay in the metro cities they’ve been renting in, which generally go hand in hand with higher down payments and even more competition.

Moving Forward

The best thing millennials can do in this lucrative market is to create a home-buying strategy. Downsizing to a smaller apartment or taking on a side hustle are great ways to increase income to build or add to an existing nest egg. Millennials should also consider amending their home buying wish list, like considering living in a nearby suburb to the metro area of their choice.

Also, putting money towards small investments that will save you money later on is a great way for millennials to get a foot in the door for more savings down the road. For example, if purchasing a home does work out for you, consider investing in small precautionary measures such as a home warranty. This way, you pay little money out of pocket every month and you will save large amounts of money every year in home maintenance costs. Unexpected repairs and/or replacements of major appliances are expensive, and if you have a home warranty to take care of that for you, you won’t have to worry about the extra costs and you can put that saved money towards other things.

For home buying, it’s important to note that if you have a strong credit history and a good lender, it’s always an option to put down a lower percentage down payment and pay Private Mortgage Insurance (PMI). PMI gets a bad rap, as it increases monthly payments to protect the lender from liability. But, if you are able to reach 20 percent down after the first year of purchasing your home, PMI can be removed via refinancing. Most importantly, millennials should be realistic about what they can afford to pay for a house.

While Housing Confidence is getting stronger every day, confidence in your ability to become a homeowner doesn’t have to shrink. By making sacrifices, setting goals, and staying up to date on market trends, it is possible for millennials to save enough money to be competitive with other buyers with better budgets, and to realize their ambitions of purchasing a home in even the toughest of housing markets.

This article by Best Company first appeared on Best Company and was distributed by the Personal Finance Syndication Network.

The post The Reason Housing Confidence Is Hitting Record Highs appeared first on Personal Finance Syndication Network.

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Financial Advice

Is Home Automation Worth the Extra Cost?

Home security systems have been around for decades, but home automation has begun to be more commonplace with the introduction of smartphones. With the exception of a few companies, home automation features don’t come standard with most home security systems. So with the extra money you’ll be paying out of pocket every month, are the extra features really worth it? Allow us to explain what home automation is, what to expect, and if it’s really worth it.

What Is Home Automation?

Before we talk about home automation, we need to lay the foundation for understanding home security systems. If you’ve already signed a contract for a professionally-monitored home security system, you’re paying a monthly fee for features like door and window sensors. Once mounted, these door and window sensors communicate to a central station in your home. From this base station, you can arm or disarm your system. When your system is armed and a door or window opens, the corresponding sensor will send a signal to the base station, triggering an alarm and notifying authorities. Systems can cost as little as $19.99/month and will have basic features like door and window sensors, and may include extras like window stickers and a yard sign. Sometimes, these are enough to deter crooks.

While it’s nice to have a home that’s professionally monitored against burglars, carbon monoxide, and fires, what if you want something that’s on the cutting edge of technology? The home of the future probably sounds pretty appealing. This is essentially what home automation is, and luckily, home automation features are more approachable than you think. More and more companies are adopting home automation through tools like smartphones and voice-controlled devices such as the Amazon Echo or Google Home. When you pair your system with one of these tools, it’s almost like your home has a built-in super computer.

Typically, your home automation system will function off an app that can be installed to your Android, iOS, or Windows device. This way, you can manage all sorts of home features from your phone or tablet even if you’re halfway across the world. All you need is internet access. Here are some of the more common features for home automation:

  • Locks—Doors with specially-equipped locks can communicate wirelessly with your smartphone. Lock your doors after you pull in to work if you forgot before you left the house.
  • Thermostat—Adjust your home’s temperature from your phone. Sometimes, you can set it to a particular schedule.
  • Lights—Turn lights on and off through your phone. Like the thermostat, this can sometimes be automated. This is particularly useful if you’re on vacation and you want your house to look lived in.
  • Cameras—This is extremely common among DIY home security systems, but has become one of the most common home automation features. It’s a great tool to keep an eye on your pets. You can even get alerts if a camera senses movement.
  • Garage Doors—Open and close your garage door without a special garage door remote.
  • Appliances—This is rarer, but not unheard of. Imagine preheating the oven before you come home to cook your family’s prized chicken recipe before your guests show up.

Essentially, your smartphone app, Amazon Echo, or Google Home becomes an automation hub for all of these tools. You can adjust your thermostat, turn lights on and off, monitor security cameras, and more. Depending on the package, you can even set timers and schedules for your thermostat, lights, and other features. Make sure to consult with a professional home security representative from top companies so you know exactly what features you’re paying for.

How Much Will It Cost?

This depends on the provider. With some top companies, it can be as little as $12-22/month extra. With other companies, it can be difficult to say because they won’t post the pricing information outright on their website. This may not necessarily be a bad thing, though. When you go directly to a company and ask for a quote based on the needs of your home, they can give you personalized feedback on what package will best suit your needs.

But let’s grab a number for the sake of comparison. Home automation can cost as much as $144-$288 per year. This is as much as two dozen movie tickets or a month’s worth of groceries. For some, that might be just a bit out of their range because they can barely afford the payments on their standalone security system. For others, that’s chump change.

To be clear, almost every home security company these days will over some basic home automation feature standard. Usually, this is in the form of a smartphone app that can arm and disarm your home security system remotely. But when it comes to features such as remote lights, locks, and garage doors, that’s going to vary depending on the provider.

Is It Worth It for You?

By this point, you’ve probably already answered this question. Is it important to you to have these tools remotely available to you no matter where you are? Is this added peace of mind worth it? If you’re still on the fence, here are a few questions you might want to consider:

  • Are you a generally forgetful person when it comes to lights and door locks?
  • Are you trying to save energy?
  • Do you want to impress your friends, family, or neighbors?
  • Do you have enough expendable income to justify the upgrade?

If you answered yes to the majority of those, home automation is probably a good option for you. But before you reach for the phone to call your home security company, make sure they have the features you’re looking for. Top companies have different home automation packages, so you might find the features you’re looking for in a different company. It pays to do your due diligence before you sign on the dotted line.

This article by Best Company first appeared on Best Company and was distributed by the Personal Finance Syndication Network.

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Financial Advice

7 Reasons Younger Workers Need More Savings

When we’re young, it’s easy to convince ourselves that saving is something we’ll get to “later.” In fact, data show that building a healthy savings is even less of a priority for those under 35. The median savings balance for that age group averages $1,580, according to the Federal Reserve. And while that may seem like a healthy savings, in reality, it’s only about enough to handle an appliance breakdown or major auto repair.

Still, as many of us know too well, when it comes to saving money, the struggle is real. It’s not easy to save these days, especially for those just starting down a career path, and recent college graduates saddled with substantial student loan debt. That’s why so many younger workers are saving far too little. But there are some compelling reasons why this generation actually needs to be saving more than any preceding generations in America.

Let’s take a look at seven factors contributing to the need for more substantial savings accounts among younger workers:

1. The cost of living is increasing faster than wages

It’s a given that the cost of living rises as time goes on. However, in recent years average wages haven’t kept pace with the massive increases that are happening year over year in the United States. As of June 2016, the annual rise in rental prices was nearly four times the overall inflation rate. The median price to rent a two-bedroom apartment is currently $1,174, marking a 1.5 percent increase year over year — and that number is higher in the fastest-growing states.

2. They’ll face larger debt

In addition to basic living costs, the under 35 age group is also saddled with higher debts than previous generations. The Federal Reserve’s Survey of Consumer Finances found the average debt to be $82,500 for households with debt that have a head of household who is 35 years old or younger. The survey also found that mortgage debt on a primary residence in this age group hovers around $142,000.

3. Social Security benefits will run out

For years we’ve heard that Social Security is running out and won’t be there — at least not at 100 percent — for the younger generation. Recent estimates predict that it will be depleted by 2034. When that happens, according to recent predictions from the Social Security Trustees, the program would be able to provide just 77 percent of benefit payments. That means that the younger generation needs to plan to supplement their reduced benefits with other savings.

4. Retirement funds aren’t what they used to be

“Traditional” retirement options have changed in recent years. Twentieth Century retirement was built on several types of retirement accounts –– including pensions –– combining to supplement the golden years. Fast forward to 2018, however, and the majority of companies have eliminated pensions in favor of matching retirement contributions or nothing at all. The problem? As budgets tighten, fewer employees are contributing to 401(k) or other matched retirement accounts. In fact, two-thirds of Americans aren’t even saving money in a 401(k), according to recent data. Furthermore, only 4 percent of those earning below $50,000 and contributing to a 401(k) max out their contribution. 

5. Savings interest is low

Even for those who are saving what they can, interest rates on savings accounts aren’t yielding much extra. The average interest a person can expect to earn on a standard savings account is only about .03 percent and even high-balance accounts can’t expect to yield more than .10 percent.

6. Student loan debt is at an all-time high

College costs have grown exponentially, and most graduates are left with huge financial burdens to repay student loans before they can even consider financing a home. Approximately 70 percent of college students leave school with debt and the average borrower has $37,172 in student loans upon graduation. That’s a $20,000 increase from 13 years ago. 

7. They’ll live longer

In spite of all the doom and gloom, there is one positive reason why younger workers will need more savings: people are living longer. When Social Security began more than 80 years ago, the majority of Americans didn’t live much past 65. Recent data from the National Center for Health Statistics indicates that Americans can now expect to live 78.6 years. Better medical care and advances will likely push life expectancy even higher in the years ahead. This means younger workers will need more in savings to support longer retirement and increasing long-term care costs.

While it can seem impossible to save at this stage of life — particularly if your earnings are low and your debts are already high — it’s important to plan ahead and set aside as much income as possible for savings. There are several approaches you can take to help you save money on a tight budget, including the 50/30/20 method. This can be an effective approach to budgeting because it ensures you’re putting at least 20 percent of your take-home pay toward debt repayment and savings.

With a healthy savings plan in place, you’ll ensure that you can meet your future financial obligations and aspirations and maintain healthy credit scores for important investments, such as saving for a house. Being financially prepared will enable you to qualify for a mortgage and other loans in the future and to secure a more comfortable retirement. It will also guarantee you are prepared to make other smaller investments, such as a home warranty or a home security system, that will save you money down the road. It’s essential to be prepared for all kinds of purchases and investments if you want to handle the upkeep of your home, your possessions, and your financial well being.

This article by Best Company first appeared on Best Company and was distributed by the Personal Finance Syndication Network.

The post 7 Reasons Younger Workers Need More Savings appeared first on Personal Finance Syndication Network.

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Financial Advice

My Daughter Has a DWI and My Auto Insurance Rates are Sky High

Question:

Dear Steve,

I have gone to several brokers including mine since Mercury Insurance does not have its own brokers per say.

My broker has tried in vain to try and get my insurance down. Unfortunately, my daughter who is 22 received a DWI and at the time my rates jumped from apx $300+ a month to 800 a month on a 6-month policy.

I am buried with these costs and have tried to get my daughter off my policy to see if standalone she would get lower rates may be under an assigned risk group. I am running out of options, I’ve tried to have my homeowners insurance who is Nationwide put us under the homeowners umbrella but they said it couldn’t be done.

I don’t have a perfect driving record either but the only accident I ever truly had in my life was two years ago when a driver ran out of gas on the expressway and didn’t move his car to the shoulder and by the time I had a chance to avoid him it was a millisecond and too late to avoid hitting him, what luck!

Do you have any ideas? Do you need further information from me, a copy of my auto insurance policy?

Please advise.

William

Answer:

Dear William,

Well, now there is a topic I’m no expert in. But thanks for a change of pace.

Historically I do the same thing you do, shop around and utilize a broker with access to multiple insurance companies for both home and automobile insurance.

Certainly, the 22-year-old daughter on your policy creates an issue with a DWI. That would jack up the rates of any policy.

Keep in mind that both an accident and a DWI are evidence of greater risk to the insurance company. Your rates will go up with the level of predicted risk.

The obvious solution here, besides shopping around, is to boot your daughter off your policy and make her responsible for the increased cost of her own insurance as a result of her adult actions. It’s tough love but it shifts the responsibility where it should be.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

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This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

The post My Daughter Has a DWI and My Auto Insurance Rates are Sky High appeared first on Personal Finance Syndication Network.

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