Archives for October 16, 2017

If you’re a millennial looking to buy a home, put on your boxing gloves: The market is competitive. August housing sales fell to a 2017 low, dropping 3.4% from July’s numbers, according to the US Census Bureau.

But while there are fewer homes on the market, there are more people looking to buy. This means the market is competitive, and affordable homes harder to come by.

Millennials are affected the most, because they make up 42% of first-time homebuyers, the largest group of any generation. According to a report by Apartmentlist, 80% of millennialssaid they would like to buy a home one day, but just 55% think they can actually afford to buy one.

Coming up with money for the recommended 20% downpayment is a huge obstacle for all homebuyers, but millennials fare slightly worse, according to a new report by Zillow. More than one-third of millennial buyers could not afford a 20% down payment, and put down an average of 11% instead, according to the report. But 68% of millennials reported having less than $1,000 saved for a down payment, and 44% said they have not saved anything.

For those who did sign on the dotted line, 37% of those millennials went over budget, compared with 29% of all home buyers, according to Zillow.

The problem with the market is a lack of affordable homes, according to the Zillow report. The average price of a new home was $300,200, down from July’s average of $320,100. These prices are out of reach for many potential young home buyers.

The options to rent are also pushing potential home buyers away from owning. Sixty-two percent of millennials were also looking into rental properties while searching for homes. The Zillow report says this suggests millennials don’t view home buying as “a sure thing.”

The solution? Build more affordable homes, according to Zillow. As more millennials look for housing outside of the rental market, they will need more options in their price range.

Ready to start tackling your holiday gift list? Join the shopping frenzy—this year, holiday retail sales are expected to top $1 trillion, according to estimates by Deloitte.

“People are feeling pretty good about things, incomes are rising, people have jobs, they’re in the spirit to spend and they’re going to spend,” said Vera Gibbons, a personal finance expert and the founder of nonpoliticalnews.com.

According to the American Research Group, the average American planned to spend an average of $929 on holiday shopping last year. Want to put away some extra cash? Gibbons shares her seven ways to save.

TIP 1: Go on a financial fast

Gibbons recommends going on a financial fast for several weeks to curb your spending habits.

“You see how much money you’ve been spending when you actually set yourself up and go on a financial fast,” she says.

Gibbons says during the fast, you don’t make any unnecessary purchases or credit card purchases. You should also challenge yourself to make no purchases whatsoever one day per week during the fast.

“I think it’s a great way for you to reset and see just how much you are spending, and get a grip on the spending,” Gibbons says.

TIP 2: Create an automatic holiday savings account  

“One of the easiest ways to actually stash away your money is to go automatic — automatically have a certain amount of money taken out of your paycheck and deposit it into a savings account,” Gibbons says.

She recommends giving it a name, and not touching it until you’re ready to shop.

“This is a really easy strategy, and the point is to get into a habit of automatically having a certain percentage taken out of your paycheck,” she says.

TIP 3: Get a side gig

For people who want to pick up an extra job, the gig economy is one of the easiest and most accessible ways to do it, Gibbons says.

“The gig economy is now 34% of the workforce, and it’s projected to grow to 40% by 2020,” Gibbons says, citing statistics from Intuit, the owner of TurboTax.

Startups like Uber, Airbnb and TaskRabbit have made making extra cash easier than ever. Plus, gigging can add flexibility and supplemental income.

“It’s a great way to get out there and earn a little extra holiday cash. People like the flexibility, you can make your own hours, and the money is decent,” Gibbons says.

TIP 4: Get a seasonal job

Picking up a seasonal job is another way to save some holiday cash, and retailers are preparing for the season in a big way.

“In the last couple of weeks retailers have rolled out literally hundreds of thousands of seasonal jobs,” Gibbons says.

Target plans to hire 100,000 seasonal workers this year, and many other retailers are looking to hire. Gibbons says the pay and benefits can be good, as retailers anticipate a busy season.

“As the season gets underway and they see the business of it all they’re offering all sorts of perks to try to draw on good talent,” Gibbons says.

TIP 5: Avoid impulse buys

It’s become easier than ever to shop, and that’s led to more impulse purchases, which means more money out of your pocket on things you might regret.

Impulse buys are “problematic because each impulse buy can easily be $50-$100 and you’re out,” Gibbons says.

And the feeling after you make that impulse purchase?

“Generally after you make an impulse buy, you have sort of the high that comes after the fact, but soon after, it’s regret,” Gibbons says.

Gibbons recommends waiting 24 hours before making your purchase. Think it through, and decide if you still want it the next day.

TIP 6: Abstain from “self-gifting”

It’s nice to treat yourself once in awhile, but “self-gifting” has become a buzzword — and a pricey one for shoppers.

“You’re going to see more self-gifting offers to actually get consumers to spend more than they actually anticipated and to buy exclusively for themselves.”

Gibbons says remembering that you’ll also be receiving, and not just buying, holiday gifts this year, can help curb your spending.

“Maybe then you won’t jump in and buy something for yourself,” she says.

TIP 7: Keep your emotions in check

When you are ready to hit the mall (or your web browser…), prepare yourself, Gibbons says. Have a shopping list and a budget to avoid any emotional spending that can add to your holiday bill.

“You have to get a grip on your emotions because when you’re feeling emotionally able to make a financial commitment to buy something, you’re probably going to go for it,” Gibbons says. “If you let your emotions go wild, that leads to a lot of unintended purchases.”

You may have made a financial resolution for 2017—but did you keep it? Thirty-six percent of Americans made a financial resolution this year, according to Fidelity. The most popular resolutions? Save more, pay off debt and spend less overall.

As the year comes to a close, it’s common for our resolutions to fall by the wayside. But there’s still time to tackle your financial resolutions. Here’s what top financial professionals have to say about the importance of setting goals, and how you can still accomplish your 2017 resolutions by the end of the year.

The importance of making a financial resolution

“It’s important to have financial goals because you need to have an idea of what you’re looking to accomplish. With no clear purpose, it’s easy to meander aimlessly and not make any progress.” —Dawn-Marie Joseph, founder of Estate Planning & Preservation

“Setting a goal, especially with finances, helps you break down what changes you have to make.” —Kim Palmer, credit card expert at Nerdwallet.com

“Setting financial goals is important because it gives you a target to strive for and holds you accountable.” —Joe Sterf, CPA and founder of Average Joe Finance

The easiest ways to reach your goals  

“First, you need to pick a goal that is meaningful to you and that you will be willing to ‘sacrifice’ for when other temptations and needs arise. Second, you need to put that goal in writing and revisit frequently so that you can stay focused on meeting your goal.” —Joe Berry, investment adviser, Semmax Financial Group

“It’s really all about turning your big resolutions into small steps so you can feel encouraged and celebrate small victories. All of those little things add up over time so by the end of the year you can really see a big difference.” —Kim Palmer, Nerdwallet.com

“Meet with a financial advisor. So many people think you need a certain amount of money, but that’s just not the case. The advisor can help you make a plan and stick with it. They can make sure you don’t bite off more than you can chew.” —Colleen Carcone, director of wealth planning strategies, TIAA

“Keep the goal in front of you. Too often we start a year with great goals, only to completely forget what they are by March, let alone October! I write out my goals on a sticky note and put it on my bathroom mirror so that every morning and every night as I’m brushing my teeth I look at it and it stays fresh in my mind.” —Jeremy Walter, CFP, founder of Fident Financial

Making a dent in your debt by December

“Don’t wait any longer to start paying off your loan! From credit cards or student loans, pay off the debt that has the highest interest rate first and then work your way through debt with lower interest rates.” —Deborah Sweeney, CEO of MyCorporation.com

“Even this far into the year, yes, you can make a difference in paying off debt. You can start cutting back on some of your expenses, or if you get a holiday bonus or year-end bonus, you can put that towards your debt.” —Colleen Carcone, TIAA

“Don’t add more debt! Before this holiday season starts, set a budget that doesn’t require any new debt. Keep your credit cards out of reach and your goals in sight.” —Ian Atkins, head financial analyst, FitSmallBusiness.com

“Look at what you are spending now per month. Look at the dinners, take-out, magazine subscriptions, monthly charges for apps or computer games/services you don’t need. Take the savings from these and put it toward your debt.” —Al Zdenek, founder of Traust Sollus Wealth Management

How to add to your savings ASAP

“Having a budget and sticking to it is critical. Meeting a financial goal for year-end will require saying ‘No’ to expenditures that are not necessary. Get lean and mean! Cut out the fluff.” —Joe Berry, Semmax

“Set up automatic payments into a savings vehicle. If you want to put more into your 401(k), 403(b) or a retirement savings that you have at work, call your HR department immediately. You can reach your goals, but it takes planning on your part.” —Dawn-Marie Joseph, Estate Planning & Preservation

“If your employer provides end-of-the-year bonuses or holiday bonuses, that’s a great opportunity to contribute to your savings. Set your bonus aside to further a financial goal.” —Ian Atkins, FitSmallBusiness.com

How to avoid getting discouraged and stick to your goals

“At times, you are going to have a few slip-ups with your goals. Don’t beat yourself up too bad. Give yourself 15 minutes of disappointment and then move on.” —Dawn-Marie Joseph, Estate Planning & Preservation

“Skip the pity party when you fall short. Don’t set yourself up for failure by insisting on an all-or-nothing change. Instead keep your focus on where you are going and your long-term savings goals.” —Pamela Yellen, financial expert, author of Bank on Yourself

“Don’t wait until the milestone date you have set yourself to find out that you haven’t met your goal. Review progress regularly and adjust your goal to be more realistic if it looks like you won’t hit your target. Keep goals realistic and you shouldn’t get discouraged.” —Amanda Gillam, personal finance professional, Solution Loans