finance Archives - Serendipity Mommy

Planning for Retirement as a Single Income Working Woman

March 26, 2020 by Mandy

We’ve all heard about the gender wage gap. But what about the retirement gap? We contribute $1,331 to our retirement accounts every year.

That’s only half as much as men. And since we have more golden years to look forward to, we ladies need some extra gold to get by. That’s why it’s never too late to start planning for retirement if you’re a working woman.

Irrespective of whether you are married or single, retirement planning helps you attain a secured life at old age. You can easily save money on grocery shopping, while dining out at restaurants and by adopting some of the very unusual ways. This money could be saved for your post retirement life.

Keep those gray hairs at bay and stop worrying. Retirement planning is easy. Here’s how.

1. Demand Your Fair Share

The more you make, the more you save. But that’s more difficult for women, seeing as we make 20% less than men in the same occupation.

Don’t be afraid to head to the negotiation table and demand the salary you deserve. Make a strong case for yourself based on your accomplishments at the company.

The worst thing you’ll hear is “no.”

2. Follow a Budget

Without a budget, you’re leaving retirement savings to chance. You don’t have to.

Plenty of budget apps and programs are available, but there’s nothing wrong with an Excel worksheet. Track your monthly income after taxes as well as all expenses.

Now you’re ready to set yourself up for success. As a rule of thumb, 10% of your monthly income should go towards a savings account. Struggling to reach that number?

That’s why you should budget. You’ll discover categories where you spend far more than you should. By trimming these discretionary expenses, such as fast food or streaming services, you can funnel the money Into your savings allocation instead.

3. Invest, Invest, Invest

Albert Einstein called compound interest the 8th wonder of the world. The concept is simple. The interest you earn becomes part of the principal balance, and then also earns interest.

In short, it’s the interest you earn on previous interest payments.

Neither men nor women will find success trying to shore up retirement savings without investing. Compound interest is an essential part of the equation. And the sooner you start, the more time you have to earn compound interest.

Your employer’s 401K plan should be your main focus, especially if they match your payments. But few businesses still offer these plans. Instead, open your own individual retirement account and start saving.

4. Calculate Your Retirement Needs

During retirement, financial pundits suggest you shave off about one-third of your current expenses. That means your retirement savings need to cover 70% of what you’re making now. Have enough?

That’s the question. Remember that in addition to your retirement savings accounts and investments, you’ll also gain Social Security payments. Since women are paid less than men, these tend to be less than you may think.

Wherever you are in your journey to retirement, check out this retirement calculator to see where you stand.

Retirement Planning for the Working Woman

It’s true that a working woman faces more financial challenges compared to the working man. But we have to take retirement planning seriously, even if it’s unfair. If you start early and keep this advice close to heart, comfortable retirement is not only possible — it’s easy.

As a working mom, you know money can get tight. Check out my finance section for more financial help.

Your New Home: 3 Important Things to Know Before Buying a House

March 9, 2020 by Mandy

64 percent of Americans are homeowners.

Are you looking to join this lot? If yes, you’re just about to make a smart investment. Homeownership isn’t just a matter of pride and peace of mind. Over time, your home will gain value, meaning you’re bound to make a tidy profit if you sell it.

However, for most people buying a home isn’t an easy or quick process. From finding the right property for you to getting financing, the process can be a little complex.

That’s why you’re here, though.

Here are some of the most important things to know before buying a house.

Your Money Matters – A lot

The average cost of a house in the United States is $315,000. Clearly, you’re not going to afford a house if you don’t have your financial ducks in a row.

Most prospective buyers underestimate the kind of financial investment they are about to make, though. In other words, your personal finances matter a great deal when you’re looking to buy a house.

It’s not just about whether you have sufficient proof of income. You also not to ensure that you have good credit – the higher, the better.

Why does credit come in?

If you’re anything like most buyers, you’re going to get a mortgage. Lenders have different mortgage approval requirements, but none compromise on credit requirements.

So, if your credit is bad or poor, be sure to rebuild it before thinking of buying a house.

If you’re in debt, taking steps such as consolidating your loans can make a big difference. Just be sure to consult a debt consolidation company before taking the step. You can check out the best debt consolidation companies BBB for reviews of some of the best companies.

The Real Estate Market Keeps Changing

The real estate market doesn’t change quickly, but it does change nonetheless. Changes in market conditions influence property values.

Therefore, you need to keep an eye on the market when you’re looking to buy a home. Ideally, you want to snap up a property when prices are lower. This way, you’re sure that the property will keep gaining value.

However, if you buy a home when property prices in a certain market are at their peak, there’s a strong chance the home will take a long time before gaining substantial value. In fact, its value can drop soon after you purchase it, especially if economic conditions worsen.

A Real Estate Professional Will Improve Your Home Buying Experience

Buying a home is an exciting experience. Nothing beats exploring the market trying to find the property of your dreams.

As a newbie, though, you’ll likely make mistakes along the way – some costly. For instance, you could end up settling on a house that’s far from what you needed in the first place.

This is why it’s important to hire a real estate agent to guide you through the home buying process. This professional will help you find the property that you need – at a small commission.

These Are the Things to Know Before Buying a House

Being a homeowner is everyone’s dream. The pathway to this dream isn’t the straightest, though. There are many hurdles to overcome.

But with this lowdown on the things to know before buying a house, you now have the information you need to make the right moves.

Good luck and keep reading our blog for more insights.

How Can a Title Loan Help You Get Cash Quick?

February 3, 2020 by Mandy

We are sure you’ve heard the term equity. Your parents told you that it’s better to have equity in a home instead of renting. But, equity doesn’t just apply to homes.

Do you own a car? Then you have equity and if you’re facing some hard financial times, a title loan can help. So, how can a title loan help get you some quick cash?

Read on for more info about car title loans and how to get one.

Title Loan Help Utilizes the Equity You Have in Your Vehicle to Get You Approved for a Loan

It’s simple to get approved for a title loan. The title loan company will ask you to provide a few documents and proof of identity and you can be on your way with your cash in no time.

A title loan works by you putting up your car title as collateral. Kind of like when you go into a pawn shop, you give them your item and they give you cash. When you pay them back the cash in the time you’ve agreed they give your item back to you.

Instead of an item, a title loan company will require the title of your car to hold onto until they receive the amount of the loan back. If you fail to pay on the loan, they can take ownership of your vehicle. This is why it’s important to know how you’re going to be able to pay the loan back in the schedule allotted.

Here are some of the items you’ll need to provide when applying for a title loan:

Your car’s physical title
Driver’s license
Social security card or birth certificate

Keep Your Car While You’re Paying Back the Loan

Because the title is what is held by the loan company, you get to continue to use your vehicle as normal during your repayment period. Everything stays the same as long as you continue to make payments on time.

There are some rules on who can apply for a title loan. You must be:

Over the age of 18
Be the owner of the car named on the title
The title must be lien free
Bring the vehicle for a visual inspection
Have proof of regular income in the form of pay stubs or other paperwork

Once you have filled out the application, proven you meet all the requirements, and handed over your title, you’ll be good to go cash in hand.

Is a Title Loan Right For You?

Title loan help, similar to payday loans, seems appealing due to the ease of access. It’s a simple application process and you’re practically guaranteed approval.

However, think about the ramifications of defaulting on this type of loan. Can you afford to lose your car? How will you get to work? Is this extra money really necessary? Before taking out any type of loan sit down and make a plan on how you intend to pay the money back.

Looking for more great content like this? Make sure to bookmark this blog and check back regularly for new articles!

5 Reasons Why Budgets are an Important Tool for Everyone

January 30, 2020 by Mandy

You might think that creating a budget is something that’s only necessary for those who are struggling to repay their debts or are only just getting by. While budgets are essential in both those scenarios, they’re also an important financial tool that can benefit everyone, regardless of the financial position you find yourself in.

The importance of budgeting is one of many financial lessons that’s rarely taught in schools. That contributes to a lack of financial literacy that can handicap individuals for the rest of their adult lives. Still not convinced? Here are five reasons why everyone should create and stick to a budget.

1. It stops you spending money you don’t have

Far too many consumers don’t think twice about spending money they don’t have. Rather than critically thinking about whether they really need to make a purchase, they’ll whip out their credit card and make the payment. That’s one of the reasons why levels of personal debt in South Africa are currently at record highs.

People who create and stick to a budget will never spend money they don’t have unless they make a conscious decision to do so. If they do, at least that’s an active decision they’ve made that should be carefully thought out and researched.

2. It helps to reveal bad spending habits

Creating a budget forces you to have a closer look at your spending habits and in many cases, you’ll be shocked by how much you’re spending on things you really don’t need. This free excel budget template from Wonga is a good starting point. It’s comprehensive enough to really shed light on your spending behaviours and show you where your actual spending is far greater than you might have thought.

3. It reminds you what your financial goals are

It’s very easy to drift through life going from one purchase to the next without ever thinking about your long-term goals and how you plan to achieve them. A budget forces you to define your goals, save money, track your progress and turn those dreams into a reality. Yes, sometimes it might hurt when you have to walk out of a store empty-handed, but when you know that money’s going towards the holiday of a lifetime or a deposit on a house, you won’t give it a second thought.

4. It prepares you for emergencies

Life is full of surprises, some good and some bad. When it comes to financial surprises, it’s very rarely good news. Budgeting will help you create an emergency fund that you can use to pay those unexpected car repair bills or replace your worn out washing machine. Your emergency fund should consist of three to six months of living costs. Although it won’t happen overnight, you’ll feel much better when it’s there.

5. It helps you plan for retirement

If you’re not already saving for your retirement, it’s high time you started. Many of us dream of a retirement spent travelling, but there’s no way your state pension alone will fund it. The earlier you start building your retirement nest egg, the more time it will have to grow. Make sure you budget to put a little money away every month. Many financial planners recommend that you save 10 to 15 percent of your income every month for your retirement, but if you can’t spare such a high proportion of your income, just save as much as you can.

What has creating a budget taught you about your spending habits? Please share your thoughts with our readers in the comments below.

6 Things That Won’t Affect Your Credit Score

January 24, 2020 by Mandy

Image source: pixabay.com

A credit score is a numerical and statistic figure that depicts an individual’s creditworthiness. This is based on your credit history and an analysis of a person’s credit files and reports. A credit score ranges from 300 to 850 on average; the higher a credit score may be, the more trustworthy a person is considered in terms of his financing.

Credit scores are also based on how you deal with making payments on time, as well as the position of accounts that you may have in good standing. A decent credit score instantly elevates your chances of securing a loan at low-interest rates but if you have any unsecured business loans, the scenario can be changed.

Similarly, you can save tremendous amounts, such as bearing the high cost of interest rates. Apart from that, you also have an edge when it comes to getting employed as employers can view how responsible you are and can be impressed enough to land you a dream job.

You can also eliminate the possibility of having to put up with a security deposit when applying for a loan or paying on installments. Renting an apartment and paying lower premiums for insurances such as automobiles and premises is dependant and is made easier as per the liability of your credit score.

Several factors may impact your credit scores directly or indirectly. Some of which may be positive or negative. You must focus on being able to maintain a sound credit score while also not having to worry about some adjustments that may come about due to various reasons but will not affect the overall status of your credit score.

1. Income fluctuation

A common misconception is that your salary affects your credit score. That is actually not the case. Sure, your employer may be listed on your credit report, but that does not have an impact on your credit score. There is no connection between a credit score and your income, neither earning a high wage help in having a high credit score.

Your credit scores will remain unchanged, and whether or not it’s reasonable depends on other factors. It is also possible to have a good credit score while you are unemployed, receiving unemployment benefits by the government, surviving on pensions, or living hand to mouth. However, a factor to keep in mind is that it may indirectly cause an influence. Losing your job could hurt being able to pay your bills on time, which in turn could obviously then affect your credit score. Lenders and institutions that can provide you with financial assistance may have a look at your salary to assess whether or not you could afford the repayment and then decide a period for that accordingly.

2. Personal life and information

Credit reports consist of your necessary personal information. This includes your name, your address (and any changes to it), date of birth, social security number, and public information about your financial history. Credit files do not take into account irrelevant information such as your race, marital status, level of education, income, and political party.

Thus, it will not bring about any change in your credit score. Similarly, it is essential to note that your marital status will not affect your credit score, as in your credit history, and the score is never merged or combined with your spouse’s. Even if your partner has a poor credit score, it won’t affect yours, neither will it have an impact on your chances of securing a loan and enjoying other benefits. That is unless the two of you opt and apply for a joint mortgage or use a joint credit card, but in no way can it change the status of your personal credit score, good or bad.

Filing for divorce also does not affect your credit score directly, but any late payments to your bills could prove to be a problem which could then negatively impact your credit score. In case you and your spouse jointly own premises or property, you both will be held responsible for any debts you may incur and have to pay off.

3. Denied credit

In the unlikely event of you being denied credit or if your application for a loan may be disapproved of, you will not have to worry about it affecting your credit score. Fortunately enough, any acceptance or disapprovals of your investments and credit denial will not show up on your credit history.

The only consequence you may face as a result of credit denial is a ‘hard inquiry’ the next time you do apply for a loan or any financial assistance. However, it is temporary and is not a factor to worry about, apart from this, there is no other downside that you will have to face if your credit gets denied.

4. Payments to small scale businesses

Credit bureaus are the ones who look after and assess your credit scores. They tend to be quite strict when it comes to choosing who can deliver and report financial related consumer information to them. In most cases, small scale business is deprived of this ability.

Payments in the form of bills to small companies such as lawn care, pest control, personal services, and rent do not appear on your credit report. In case a company that is feasible enough to report to credit, bureaus do not report payment information on the time it could affect your financial history with that the company could affect your credit score.

5. Paying for someone else

Acts of kindness go a long way, but not long enough to change your credit scores. If you do intend to help out a family member or friend who may be suffering from a budget constraint, you must acknowledge that such a thing will not bring a change to your credit scores; therefore, it should be done purely for the contentment of your heart. A credit file will only have a report of anyone who owns the bill, without considering who actually might pay for the debt.

6. Your interest rate

While you are applying for a loan, you may be keen to shop around for the best and lowest interest rates out there. Don’t hesitate to do so as multiple inquiries are often considered as one if they typically occur in a span of a couple of weeks. Yes, scoring models are delicate and fragile enough to take notice when you are out shopping for the best interest rates but that won’t create an impact on your credit score.

These are some of the many factors that do not bring about any change to your credit score. A decent credit score can be attained mainly on your responsiveness to paying bills and making payments efficiently and at the right time. There may be indirect impacts on your credit score, but nothing that could directly affect it.

You must enlighten yourself with information about factors that impact your credit score and sort it out with misconceptions that do not. Make sure you are not stressing out on minor details such as the above that you may think is impacting your credit score but are actually not. Keep track of your credit files and history to stay updated with your financial accounts.