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A Parent’s Guide to Setting a Successful Budget for a College Student
The post A Parent’s Guide to Setting a Successful Budget for a College Student appeared first on Penny Pinchin' Mom.
 You are getting ready to send your child off to college. Before you start helping them pack their belongings, there is one thing you need to do.
You need to help them create a budget. You need to teach them how to manage their money so they can learn the tools theyâll use long after they graduate.
WHY DO COLLEGE STUDENTS NEED A BUDGET?
The truth is everyone needs a budget. It does not matter your age. If you are dealing with money, a budget is necessary.
- Allows you to control your money. Rather than your money telling you what it wants to do, you get to tell your money where it needs to go. You are always in control when you have a budget.
- It teaches financial skills. A budget helps ensure that expenses such as rent, tuition, food, insurance, transportation, and housing are paid â before spending money on the fun stuff. (It also helps to make sure you donât spend more than you make.)
- Makes you aware of where your money goes. When you use a budget, you see how you spend. It is very simple to see if too much is going toward dining out when you should be building your savings.
- Helps you track your goals. You need to cover expenses but you should also work on building savings at the same time. Your budget allows you to not only see those goals but track them in real time.
DOESNâT A BUDGET MEAN YOU CANâT HAVE FUN?
Not at all! If anything, your budget will allow you to have guilt-free fun.
For example, the budget may allow you to spend $50 a week dining out. That means you can go to dinner with friends once (possibly twice) a week and enjoy yourself. You wonât be left wondering how you are now going to make rent.
WHAT TYPE OF BUDGET SHOULD YOUR STUDENT USE?
There are various methods of budgeting such as the 50/30/20 and the zero-based budget. For most college students, the zero-based is the simplest and easiest to follow.
The reason is that you track everything. You give every penny a job. That means if you earn $1,500 for the month that you âspendâ the entire $1,500.
You will first cover the needs (food, shelter, transportation) and then your wants. If there is money âleftoverâ after this is done, it can be added to your savings.
You can use other types but if you have never budgeted before, using this method is the simplest.
WHAT SHOULD A COLLEGE STUDENT INCLUDE IN A BUDGET?
The budget will vary for each person, as the income and expense will be different. However, these are the most common categories that need to be included in a budget:
- Rent
- Renterâs insurance
- Car payment
- Car insurance (also saving for annual renewal fees)
- Food
- Clothes
- Utilities (phone, electricity, gas, water, etc.)
- Tuition
- Fees
- Entertainment (movies, games, concerts)
- Dining out
- Emergency fund savings
Again, you may have items that are not included above or see some that you do not need.
However, the most important thing of all is that every penny is given a job. Account for everything you will spend each month so you never have too much month and not enough money.
HOW DO YOU KEEP TRACK OF YOUR BUDGET?
For most college students, apps or digital trackers are the best options. But, before you rush and sign up, keep the following in mind.
- Cost. Many apps are free and they will work perfectly fine. Other apps have a monthly fee attached to them. If you plan to use one of them, make sure you include that as one of your regular expenses. However, do not let the cost alone be a single factor when it comes to clicking the sign-up button.
- Security. Your security trumps all else. You need to make sure the app uses encryption as well as two-factor authorization.
Some of the best apps include:
- Mint
- You Need a Budget (YNAB)
- PocketGuard
- Mvelopes
However, your student may also like the traditional paper and pencil method â and that is OK as well.
Find the right one that works best for your student. That is all that matters.
TEACHING THEM TO BUDGET
Knowing you need a budget and where to track it is just the beginning. You need to teach your child how to budget.
Start by looking at each category that they need on their budget. You may already know the cost for each category but if not, you may need to make phone calls or do research to know.
For example, you know the rent for the apartment is $850 a month but how much are the average utilities? Ask the manager for these costs so you can include them in the budget.
Next, decide how much they want to allow themselves to spend on food. Show them how much a meal costs for a single person at each restaurant you eat at so they can create an average.
You will then have them decide how much âfun moneyâ they want to include as well. You can base this on them wanting to go to the movies two times a month, one concert a month, or attending three events.
Now you can see the expenses for your student. Add their income to the budget and deduct the expenses. They will see if they are operating in the black (money left over) or in the red (spending more than they make).
Show them how to adjust the numbers by increasing their savings or lowering the amount they can spend on clothes â until the budget equals zero. Zero meaning they are spending every penny they earn.
And making them keep track now will help ensure they stay on track well into the future.
The post A Parent’s Guide to Setting a Successful Budget for a College Student appeared first on Penny Pinchin' Mom.
Source: pennypinchinmom.com
How to Transfer Your 401(k) When Changing to a New Job: 401(k) Rollover Guide
Itâs easy to forget about old 401(k) plans when changing to a new job. Some people simply forget about it because the company that manages it never reminds them. Others didnât forget about their old account, but theyâve been putting off the rollover because it sounds hard.
Many companies donât make the process easy for customers to roll over their 401(k) accounts from previous jobs. But it can be worth the inconvenience.
By not rolling it over, you might be losing some serious cash. Thatâs rightâlosing money, so itâs easy to miss. Here are a few key reasons to prioritize a 401(k) rollover.
3 Reasons to Transfer Your 401(k) to a New Job
There are three main reasons to rollover a 401(k):
1. To reduce fees. If the fees are too high with your previous employerâs 401(k), rolling over a 401(k) can be advantageous.
2. To maximize your money. If you arenât happy with the investment options in your old 401(k) and your new employer accepts rollover 401(k)s, you might be able to save money while investing in a broader range of investment vehicles.
3. To streamline your investments. If you leave your 401(k) where it is, you may not think about it very often. Itâs important to keep tabs on all of your investments so you can make sure they are on track and appropriate for your time horizon and goals.
You May Be Paying Hidden Fees
There are all sorts of fees that go into effect when you open a 401(k), including recordkeeping fees, maintenance fees, and fund fees. Expressed in a percentage, these fees inform the expense ratio of a plan.
Employers may cover those fees until you leave the company. Once youâre gone, that cost might shift to you without you even realizing it.
Fees matter: When you pay a fee on your 401(k), youâre not just losing the cost of the fee; youâre also losing all the compound interest that would grow along with it over time. The sooner you roll your plan over, the more you could potentially save.
You Might Be Missing Out on Better Investments
401(k) accounts grow at different rates depending on which assets you invest in. If the retirement savings plan at your new companyâor an individual retirement plan (IRA)âoffers a selection of stocks and bonds that better aligns with your financial goals, it might be time to initiate a rollover.
The money thatâs sitting in your old 401(k) could potentially grow at a faster rate if you roll it over into a new plan or into an IRAâitâs certainly worth investigating the growth rates of each. Keep in mind that investors can lose money when investing, too, so it always makes sense to consider your personal risk tolerance when deciding how to invest your retirement accounts.
You Could Lose Track of the Account
Itâs not your fault, itâs just logistics. Itâs harder and more time-consuming to juggle multiple retirement accounts than it is to juggle one. Until you retire, youâll be managing two (or more) websites, two usernames and passwords, two investment portfolios, and two growth rates for decades.
And if you leave this next job to go to a third (or a fourth, or a fifth), the 401(k) plans could pile up, creating even more tracking work for you. Plus, when youâre no longer with an employer, you might miss alerts about changes that may occur with an old retirement plan.
What to do With Your 401(k) After Getting a New Job
While itâs generally allowed to leave your account in your former employerâs plan when you switch jobs, there are other options.
• Cash out the account. If you take this route and youâre younger than 59½ years old, you will owe taxes and might also owe early withdrawal penalties depending on how you use the money.
• Roll over the 401(k) account. You could roll the account into your new employerâs retirement plan (if allowed) or into an IRA.
Cashing Out Early
Should you choose to cash out your 401(k), you will have to pay taxes on the money, and perhaps an additional 10% early withdrawal fee.
That said, there are some circumstances when the 10% fee is waived (but not the income tax), such as when the funds will be used for eligible education expenses, certain medical expenses, or expenses related to a first-time home purchase, among other circumstances.
Rolling Over a 401(k) to Your New Employerâs Plan
The process of rolling over a 401(k) might seem intimidating or inconvenient at first, especially if youâre moving onto your second job and this is the first time youâll be rolling over a 401(k). In actuality, the actual process of rolling over a 401(k) isnât too complicated once youâve decided where your existing funds are going to go.
Advantages of Rolling Over Your 401(k)
Rolling over your 401(k) to a new plan can be advantageous to your overall financial plan. Here are a few ways this transition might be beneficial to your financial well-being.
One Place for Tax-Deferred Money
Transferring your 401(k) to your new employerâs plan can help consolidate all of your tax-deferred dollars into one account. Keeping track of and managing one account may simplify your money management efforts.
A Streamlined Investment Strategy
Not only does consolidating your previous 401(k) with your new 401(k) make money management easier, it can also streamline your investment strategies.
Financial Service Offerings
Some 401(k) plans offer financial services, such as financial advisor consultations, to help employees achieve their retirement goals. If your previous employer didnât offer this service and your new plan does, taking advantage of this offering may help you achieve an investment plan that meets your exact goals rather than a standardized option.
Access to a Roth Option
An increasing number of employers are offering a Roth 401(k) option in addition to the traditional 401(k) option. With a Roth 401(k), the money you contribute is after-taxâit doesn’t minimize your taxable income. But when you take distributions in retirement, you won’t have to pay taxes on the withdrawal amount. As long as the account has been open for five years and you’re over 59 ½, you can receive tax-free distributions.
A Roth 401(k) option can be appealing if you feel your income in retirement will be higher than your current income. If your new employer offers this benefit and you think it will be advantageous to your financial situation, then rolling over your 401(k) to a Roth 401(k) plan may make sense.
How to Roll Over Your 401(k)
So, how do you transfer your 401(k) to a new job? If you decide to roll your funds into your new employerâs 401(k), youâll most likely need to:
1. Contact the plan administrator to arrange the rollover. You may need to choose the types of investment you would like before you initiate the rollover. If not, you can take a lump-sum transfer and allocate the funds gradually to different investments of your choosing.
2. Complete any forms required by your employer for the rollover.
3. Request that your former plan administrator send the fund via electronic transfer or a check so you can move the funds directly to the administrator of the new plan.
Itâs possible that you might have to wait until your employerâs next open enrollment period to complete the rollover, but you might consider using that time to research the planâs investment options so youâll be ready when the time comes.
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Rolling Over a 401(k) Into an IRA
If you choose to roll your 401(k) funds into an IRA thatâs not employer-sponsored, a direct rollover is the method that takes most of the guesswork out of the transfer. This means that the funds will be taken from your previous account and rolled directly into the new account.
Doing it this way should avoid your previous lender sending you a check and resulting in any unforeseen early withdrawal tax situations.
Opening a new retirement account online is fairly straightforward, but there are some steps to opening an IRA that might be worth reviewing before you start. Once your funds are rolled over, youâll be able to choose the investments that work for your retirement goals.
401(k) Rollover Rules
When requesting a transfer, you may either select a direct and indirect rollover. With a direct rollover, the check is made out to the financial institution (for your benefit). Because the funds are directly deposited into the new account, no taxes are withheld.
With an indirect rollover, the check is payable to you, with 20% withheld for taxes. Youâll have 60 days to roll over the funds (80% of your previous plan) into an IRA or other retirement plan. If you want to contribute the full amount of your previous plan, you can add money to bring the lump contribution back up to the balance before rollover. At that point, youâd be able to count the 20% withheld as taxes paid.
The Takeaway
There are many benefits to rolling over a 401(k) after switching jobs, including streamlining your retirement accounts and directing your money so that it suits your individual financial needs and goals. While some may view it as inconvenient, itâs actually a straightforward process whether you want to roll over a 401(k) into your new employerâs plan, or into an IRA.
Not sure which rollover strategy is right for you? SoFi Invest® offers retirement savings plan options. With a SoFi Roth or Traditional IRA, investors have access to a broad range of investment options, member services, and our robust suite of planning and investment tools.
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The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individualâs specific financial needs, goals and risk profile. SoFi canât guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term âSoFi Investâ refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated InvestingâThe Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (âSofi Wealthâ). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (âSofi Securities).
2) Active InvestingâThe Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Digital AssetsâThe Digital Assets platform is owned by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, http://www.sofi.com/legal.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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The post How to Transfer Your 401(k) When Changing to a New Job: 401(k) Rollover Guide appeared first on SoFi.
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6 Fun, Inexpensive Ways to Revamp Furniture
Dresser Storage
If your country kitchen is running out of room, consider a dresser. Even though you’re used to bureaus being only for bedrooms, it can be a valuable addition to a kitchen for storing napkins, utensils, and more. Repaint the dresser in colors to match your kitchen and you’ll have guests asking where you got your newest piece of kitchen furniture.
Don’t Discard Dingy Dressers
If your furniture is weathered or out of style, that’s not necessarily a reason to replace it. There are plenty of ways to spruce up old dressers, chairs, and tables. Everybody loves quilts, so why not drape one over that old chair that needs re-upholstering? You can also try using colorful fabrics on the fronts of nightstand and dresser drawers. Just get some scrap cloth from your last project or from a fabric store, and attach it to the dresser drawers with a staple gun. To have even more fun with it, we like to paint part of the piece and color-coordinate it with the cloth we’re using.
Handled With Style
If your cabinets are getting old and worn, you can revive them just by replacing the knobs and handles. A good variety should be available inexpensively at your local hardware store. They’ll make your kitchen or bathroom look brand new!
A Gift for Decoration
Dress up an inexpensive set of plastic drawers by covering them in wrapping paper. Choose some paper you love (you can even pick several coordinating designs), and cut the pieces to fit the size of the drawers. Then spread a crafting glue/sealer, such as Mod Podge, on the plastic and smooth the wrapping paper onto it, being careful to eliminate bubbles. Allow to dry, and apply a coat of sealant on top. Not only does the paper look beautiful, but it also hides the contents of the drawers, making everything appear neat and tidy.
Matching Not Necessary
You’ve probably noticed this at the restaurants you frequent, but it’s becoming more and more acceptable nowadays—even hip—to eat your meals on vintage, mismatched chairs. Instead of spending a fortune on a dining-room set, go for the mismatched look and hunt for your chairs at thrift shops and used furniture stores.
Brighten Up the Bookshelf
If you’re looking for an easy, inexpensive way to add a pop of color to a room, look no further than the bookshelf. You can paint the interior back “wall” of the bookshelf a color that either contrasts or coordinates with your decor. It will add a modern touch for not a lot of money!
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Source: quickanddirtytips.com
5 Neglected Expenses That Can Ruin Your Vacation Budget
5 Neglected Expenses That Can Ruin Your Vacation Budget
With the weather warming up, summer vacation isn’t too far away. If you haven’t already, it’s time to start a vacation budget and account for everything you’ll be paying for that week.
After all, you don’t want to have to cut your relaxation time short because you forgot that you actually have to pay for gas.
But there are other financial surprises too, ones that perhaps you don’t think very much about when sitting down to create your budget. Here are a few that maybe you have not taken into account just yet, but absolutely need to.
Let Mint.com help you create the perfect vacation budget. Click here to get started!
Parking
Despite free public parking not being a popular idea among money-hungry companies for a while now, a lot of us still forget that we have to pay for the damn thing. This may be a few bucks or a few dozen bucks, but either way you can’t forget it when budgeting for your vacation.
Do the research to find out the charges for each place you’re staying or going to. Going to see a ball game? How much does the park charge to park? Going to take the train into the city? How much do they charge and, if need be, how much does valet parking cost?
Add those up, and you might be surprised how much not actively driving your car can run you.
Wi-Fi
These days, Wi-Fi is just about everywhere, and just about everydiv uses it. While the airport Wi-Fi might be free, the hotel you stay in might want a few bucks extra for use of their signal. This is especially true in nice, upscale hotels, where Wi-Fi access could run you $10-$20 a day.
So either annoy your family by checking into some rinky-dink motel, where Wi-Fi is free but everything is roach-ridden and moth-eaten, or factor in the money necessary for Junior to use his iPad on the coziest bed he’s ever slept on.
The Food Bill
Even though it’s part of our daily lives, many people don’t think about food when punching out their budget. And if they do, they vastly underestimate how much stomach fuel actually costs.
This goes for vacations as well. You should find out what restaurants in the area typically charge, so you don’t get blindsided by the high cost of steak. If you’ve rented out a house with a kitchen and fridge, take some time to deduce how much you and your family spend on food at home.
Then, take that total and add a bit more to the food budget. It’s vacation time, after all, and for many, relaxing and unwinding means more burgers and s’mores than during a regular workweek.
Checked Bag Fees
If there’s one thing all travelers can agree is pure evil, airlines charging people to check in their bags has be it. Some airlines, such as Southwest, will let customers get away with some checked bags for free, but expect to fork over $25 or more for each additional one.
Checked bag fees need to be part of your budget every time, because it’s never, ever going away. Airlines make too much money off of it to abandon it simply because we don’t like it.
Either pack minimally, ensuring that you can get away with nothing but carry-ons and maybe one or two checked bags, or put a couple hundred bucks aside in the budget for the over packers in your family.
Spontaneous Activities
There was an episode of Full House where Danny Tanner attempted to script the family’s Hawaiian vacation to the letter — every activity planned ahead of time, strict time limits on said activities, and naturally every penny accounted for.
This almost never happens. Vacations aren’t nearly that organized, and you will have some unpredictable moments, not to mention costs that you didn’t see coming. Maybe your children see an ad for horse riding trails and immediately start begging you to let them ride the horsies.
Sadly, horsies aren’t cheap, but this is a vacation, so why not let them indulge?
The trick is to not indulge too much. Don’t do everything that sounds fun, because the inevitable overdraft charges on your bank account won’t be very fun. Leave enough room in your budget for unplanned, spontaneous activities, and stick to that window as closely as you can.
This way, you and your family will have a great, fun vacation, and you won’t still be paying for it months and months later.
Mint.com can help create a complete vacation budget just for you and your family. Click here to sign up and start!
The post 5 Neglected Expenses That Can Ruin Your Vacation Budget appeared first on MintLife Blog.
Source: mint.intuit.com
4 Tricks for Budgeting on a Fluctuating Income
If you have an irregular income, you know how great the good times feelâand how difficult the lean times can be. While you can’t always control when you get paid or the size of each paycheck if you’re a freelancer, contractor or work in the gig economy, you can take control of your money by creating a budget that will help you manage these financial extremes.
Antowoine Winters, a financial planner and principal at Next Steps Financial Planning, LLC, says creating a budget with a variable income can require big-picture thinking. You may need to spend time testing out different methods when you first start budgeting, but, âif done correctly, it can really empower you to control your life,” Winters says.
How do you budget on an irregular income? Consider these four strategies to help you budget with a variable income and gain financial confidence:
1. Determine your average income and expenses
If you want to start budgeting on a fluctuating income, you need to know how much money you have coming in and how much you’re spending.
Of course, that’s the basis for any budget. But it can be particularly important if you’re trying to budget on an irregular income because you may have especially high- or low-income periods. You want to start tracking as soon as possible to build up accurate data on your average income and expenses.
For example, once you have six months’ worth of income and expenses documented, you can divide the total by six to determine your average income and expenses by month.
Many financial apps and websites can help with the tracking, including ones that can connect to your online bank and credit card accounts and automatically pull in your transactions. You may even be able to pull in previous months’ or years’ worth of data, which you can use to calculate your averages.
If you’re budgeting on a fluctuating income and apps aren’t your thing, you can use a spreadsheet or even a pen and notebook to track your cash flow. However, without automated tracking, it can be difficult to consistently keep your information up to date.
2. Try a zero-sum budget
“There are several strategies you can use to budget with an irregular income, but one of the easiest ones is the zero-sum budget,” says Holly Johnson. As a full-time freelance writer, she’s been budgeting with a variable income for over seven years and is the coauthor of the book Zero Down Your Debt.
With a zero-sum budget, your income and expenses should even out so there’s nothing left over at the end of the month. The trick is to treat your savings goals as expenses. For example, your “expenses” may include saving for an emergency, vacation or homeownership.
“There are several strategies you can use to budget with an irregular income, but one of the easiest ones is the zero-sum budget.”
Johnson says if you’re budgeting on a fluctuating income, you can adopt the zero-sum budget by creating a “salary” for yourself. Consider your average monthly expenses (shameless plug for tip 1) and use that number as your baseline.
For example, if your monthly household bills, groceries, business expenses, savings goals and other necessities add up to $4,000, that’s your salary for the month. During months when you make over $4,000, put the extra money into a separate savings account. During months when you make less than $4,000, draw from that account to bring your salary up to $4,000.
“We call this fund the ‘boom and bust’ fund,” Johnson says. “By building up an adequate amount of savings, you will create a situation where you can pay yourself the salary you need each month.”
3. Separate your saving and spending money
Physically separating your savings from your everyday spending money may be especially important when you’re creating a budget on an irregular income. You may be tempted to pull funds from your savings goals during low-income months, and stashing your savings in a separate, high-yield savings account can force you to pause and think twice before dipping in.
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An easy way to put this tip into action when creating a budget with a variable income is to have all of your income deposited into one account, then disburse it into separate savings and spending accounts. “Transfer a set amount on the first of every month to a bill-paying account and a set amount to a spending account,” Winters, the financial planner, says.
“The bill pay account is used to pay for all of the regular expenses, like rent, insurance, car payments, student loans, etc.,” Winters says. These bills generally stay the same each month. The spending account can be used for your variable expenses, such as groceries and gas.
When considering your savings accounts, Winters also suggests funding a retirement account, such as an Individual Retirement Account (IRA).
If you’re budgeting on a fluctuating income as a contract worker or freelancer, you may also want to set money aside for taxes because the income and payroll taxes you’ll owe aren’t automatically taken out of your paychecks.
4. Build up your emergency fund
“The best way to weather low-income periods is to prepare with an adequate emergency fund,” freelancer Johnson says. An emergency fund is money you set aside for necessary expenses during an emergency, such as a medical issue or broken-down vehicle.
Generally, you’ll want to save up enough money to cover three to six months of your regular expenses. Once you build your fund, you can put extra savings toward other financial goals.
When you’re budgeting on a fluctuating income, having the emergency fund can help you feel more at ease knowing that you’ll be able to pay your necessary bills if the unexpected happens or when you’re stuck in a low-income period for longer than anticipated.
A budget can make living with a variable income easier
It can be challenging to budget on an irregular income, especially when you’re first starting. You might have to cut back on expenses for several months to start building up your savings and try multiple budgeting methods before finding the one that works best for you.
“Budgeting requires a mindset change regardless of which type of budget you try,” Johnson explains.
“The best way to weather low-income periods is to prepare with an adequate emergency fund.”
However, once in place, a budget on an irregular income can also help free you from worrying about the boom-and-bust cycle that many variable-income workers deal with throughout the year.
The goal is to get to the point where you can budget with a variable income and don’t have to worry about when you’ll get paid next because you set your budget based on your averages, planned ahead during the high times and have savings ready for your low times.
The post 4 Tricks for Budgeting on a Fluctuating Income appeared first on Discover Bank – Banking Topics Blog.
Source: discover.com
The Financial Truths COVID-19 Has Taught Us

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
Source: thepennyhoarder.com
How to Plan a Budget If Your Home Is a Fixer Upper
When your home is a fixer-upper, it can be difficult to even know where to start with a renovation. The list can be overwhelming—fix the patio, change out the mustard yellow carpet, buy furniture, paint the house. With a never-ending to-do list, planning a budget can seem virtually impossible.
By sorting through your list of wants and needs and focusing on essentials, you can outline a budget that won’t keep you up at night. Here are some tips on how to plan a budget for turning your fixer-upper into your first dream home.
1. Sort through the “wants” and “needs.”
Where do you even start with a renovation budget? With a limited fixer-upper budget, it’s essential to make functionality the first priority. When the roof is leaking and your fridge is dead, this is where the budget begins. First, determine what infrastructure items require repair or an essential upgrade, as these are typically big-ticket items. Next, focus on beautifying projects that will reap benefits in the long run, like bathrooms and kitchens. Hold off on budgeting fancy appliance upgrades and expensive decor if you already have working items—these can come at a later time after you take care of all the essentials.
2. Consider purchasing used over new.
Give your budget more flexibility by going for used over new with certain big-ticket items. Used appliances, for instance, can be found in great condition from other remodels or homeowners upgrading to the latest technology. Used furniture is also a fantastic way to keep your fixer-upper budget low. Don’t forget—sofas, vintage chairs, tables and more can be easily reupholstered and refinished. They’ll look brand new for just a fraction of the cost.
3. Be ready to DIY with a gift card.
As a first-time buyer, there’s a 99 percent chance you’ll be diving into the realm of DIY. Learning one or many DIY skills will not only come in handy with home repairs in the future, but it’s a fantastic way to keep labor costs low. If you’re worried your DIY supply budget will get out of hand, however, shop with a gift card to your local hardware store. That way, you’ll always be working with a fixed amount of money and won’t be tempted to add on any expensive extras. It’s a guaranteed way to keep your budget in check.
4. Get creative.
Fixer-uppers are great hands-on projects, and creative solutions are key for keeping your budget in line. For items like cabinetry that may be in good condition but out of style, get creative with refinishes to bring new life into your space. Give your kitchen a fresh take by painting cabinets in a modern shade, or reface them for a whole new look without the added cost of all-new cabinetry. Replace hardware on cabinetry, furniture and built-ins to make your pieces feel brand new. Even outdated fireplaces, doors, furniture and windows can go a long way with a fresh coat of paint and new hardware. Consider this cheap alternative to help save room in your budget for the fun stuff.
5. Let the professionals help.
Whether you’re starting with the kitchen or diving into a full-scale remodel, don’t be afraid to seek professional help. No matter what your budget, a professional’s advice can help ensure that your renovation has as few hiccups as possible. City codes, minute details and hidden elements can wreak havoc on projects, so let a master guide you through those hurdles instead of trying to blindly tackle them yourself. Don’t let the potential price tag deter you from investing in having expert guidance—many architects and designers have options for paying an hourly rate. This is a great option, especially for fixer-upper and DIY projects, as it allows your plans to be looked over by professionals without the price tag of a full design scope.
Source: quickanddirtytips.com