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Did you know?
From 2001 to 2005, the average homeowner saw the value of his or her house jump by more than 50 percent.
Kids are going to eventually turn into adults. Adults making financial decisions affect the entire economy. Finance classes are rarely taught in school, with most high schoolers graduating having no idea what credit scores, debt, mortgages, and investing even are– let alone, how to budget! This needs to change. Personal finance education starts at home. It can be a squeamish topic to bring up, especially if you aren’t as well off as you’d like to be. Most parents also just want to shield their kids from adult responsibilities for as long as possible. This is fine, but once they’ve grown up– then they have no idea what to do. Teach them well, and start early. Taya at Simply Frugal can help. Here are things every kid should know about money:
Money is Limited It’s important to teach kids that money is limited, and that people have to live within a budget and not rely on credit. As the saying goes, “Money Doesn’t Grow on Trees!”
Saving as a Habit Financial education for children should definitely include the importance of saving money in a savings account.
Everything Costs While young kids shouldn’t be worrying about the cost of living, it is important that they learn that everything has a price and a value.
Budgeting Skills How to set up a budget is not something we’re typically taught to do in school or at home. Yet, learning how to set up a budget is an important skill to pass on to your kids.
When most people are shopping for mortgages, the number one concern that they have is interest rate. Some will even completely base their decisions on that number alone, without considering other factors. And that is a huge no-no! While interest rate should be carefully examined (especially since they are hitting record lows currently), there are tons of other questions that one should ask when looking for a mortgage. Dan Moyle at the Amerifirst blog explains why it should not be the primary concern:
Interest rates — also called APR when you factor in all of the costs or fees that go with them — fluctuate a lot. Rates can rise or fall daily, even by the hour.
The more important question: can the lender get the loan closed efficiently and in a timely manner, like a month or 2 versus 90 days or more.
You should try to donate and volunteer to charitable causes as often as you can, but that need definitely rises during the holidays. However, while you’re out adopting angels from the Angel Tree, giving money to St. Jude’s, and volunteering at the food bank, be sure to keep an eye out for scammers. Even though people are generally more giving during the holidays, unfortunately this also leads to a rise in the number of rip-off artists. Some people will say anything to get your money, which is why it’s important to do your research before donating to a cause. Joanne Guidoccio at The Dollar Stretcher has some tips on how to be generous, but smart:
Get Off the Telephone No reputable charity will ask you to donate over the telephone.
Check the Numbers No more than forty percent of donations should be used to cover general administration and fund-raising costs.
Do Not Respond to Pressure You have a right to say no.
Double-Check the Name Some charities use names that closely resemble well-known, legitimate organizations.
Keep Records While it is necessary to save records of any donations for tax purposes, it is also important to keep records to avoid fraud.
Give Generously and Wisely Once you have identified worthy charities and causes, consider your own budgetary constraints.
If you’re a crafty person, the holiday season is a little easier for you. You can make beautiful, meaningful homemade gifts out of a few inexpensive supplies. For the rest of us, just going to a department store and buying stuff is much easier. But what do you do when you are both broke AND uncreative? Luckily, there are still tons of DIY ideas that are very straightforward and easy, even if you are the un-craftiest person alive. Check out these ideas by Ask Anna Moseley if you need to save on Christmas gifts this year:
DIY Picture Blocks
Vinyl Wall Art (all you need is a stencil!)
Advent Calendar (or regular calendar)
Wood and Stencil art
Her entire post includes detailed photo tutorials on how to make each craft, so be sure to take a look at it!
The very first time I ever went to an Aldi’s was last weekend with a friend. She insisted that the deals were simply too amazing to pass up. And partly, she was right! Once you get over the weirdness of it all, (paying to use a cart, no shopping bags, unheard of off-brands) you can really save a lot. But only if you buy the right things. For example, I got a whole head of lettuce for less than a buck, and a 5 lb bag of red potatoes for $1.50. However, I guess to balance out the crazy cheap produce, they jack up prices on other things. Kelly at Kansas City Mamas has put together this guide of what to buy at Aldi and what to avoid:
You should buy:
-Pretzels and chips
-Flour and Sugar
If it isn’t an ALDI store brand, you are better off buying it at a grocery store with a coupon.
If you don’t quite understand the housing market and what causes mortgage rates to be in a constant state of flux, this one is for you! This article by Ilyce R. Glink at Yahoo Homes does a great job laying out all the reasons for market ups and downs, and why rates will be high sky one month and back to normal a week later. Obviously, it’s affected by normal economic forces like supply, demand, appreciation and inflation, but did you know about the Secondary Mortgage Market that affects rates much more heavily?
The secondary mortgage market is where loans and servicing rights are sold by market leaders Fannie Mae and Freddie Mac and bought by investors such as mutual fund companies, banks, hedge funds, and teacher and municipal pension funds.
On Wednesday, the Fed announced it would keep interest rates at below 0.25 percent in an effort to further stimulate the housing market and, hopefully, the broader economy. The Fed plans to keep interest rates near zero until the unemployment rate drops to 6.5 percent, as long as inflation remains in check.
While the amount of foreclosures has hit a new low, it is still a problem for many Americans who simply cannot afford their own homes. Once you begin missing payments, the foreclosure process can be much quicker than you’d expect. That is why it is extremely important to stay on top of your payments. If you get behind or miss some, it is vital that you are proactive in making it up. George Souto at the Active Rain blog has some advice for those who may be in danger:
60 days late on a mortgage payment is the point of no return for homeowners.
One of the most important things that a homeowner needs to do as soon as they realize they will not be able to make their mortgage payment is to contact their Lender, and workout a REALISTIC payment plan which will allow them to stay current or catch up if they are already late.
Homeowners who are behind on their mortgage should also seek the help of a free financial counselor like the ones provided by the Department of Housing (HUD)
I’m usually very careful with my shopping habits. Before I go anywhere, I set a budget limit on how much I’m going to spend and (usually) stick to it. However, with all the great holiday sales cropping up, resisting impulse buys and unplanned shopping sprees gets tougher and tougher. Luckily, there are ways to keep shopping fever at bay. Kristin Wong at the Get Rich Slowly blog has some valuable advice:
‘Power shop’ “I power-shopped,” he said, meaning he’d walk around Best Buy, fill his basket up with Stuff and then put it all back. It seems kind of crazy, but it helped him let go of his desire to consume everything.
Focus on your goalsThe more focused I’ve become with my financial independence, the less obsessed I am with shopping.
Wait Because emotional shopping is usually impulsive, waiting helps you decide whether you really want something or you’re just spending to spend.
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