Taking on the responsibility of home ownership is a big feat—expenses pile up quickly, and creating a home for yourself and/or your family is a stress of its own. There are some circumstances in which attempting to buy a home would be extremely complicated and difficult. Financial, emotional, and mental preparedness are essential to successfully become a homeowner; consider the following elements of that preparation as you decide whether or not to buy a home.
Lack of Cash
To sellers in a high-competition market, cash offers are definitely more appealing than mortgage offers; a cash offer assure the seller that they will get the money upfront, where financing is considered “iffy”… if financing is denied the buyer, the buyer may have to back out, which is very frustrating and inconvenient for the seller. If you do not have the cash capital to appeal to sellers, and will have to rely (unsteadily) on financing, you may have a more difficult time with sellers accepting your offers. Lack of cash may be a red flag to sellers that your financial status is shaky, meaning they may prioritize cash offers over yours.
It is possible to buy a home with poor credit, just a challenge to get “okayed” across the board. If you choose to finance your home, you may have a hard time getting mortgage lenders to give you a loan. That doesn’t mean you are out of hope though! According to Chris Murray Home Loans, an FHA loan is backed by the federal government and requires a lower down payment. Mortgage companies may also look at your income statements, debt record, and available money for a down payment, and if these numbers are promising you have a better chance of them agreeing to do business with you. If you do have bad credit, it is helpful to have a good amount of cash!
Big Life Changes
If you are experiencing a big life-change, buying a home becomes a considerably bigger challenge—family or marital separations, serious illnesses, or career changes all require time and attention (and, of course, are financial commitments themselves that may make large expenses concerning. According toMoney Under 30, you should work with financial advisors to determine how to budget and manage your money, and create a timeline for doing so!
If you have a lack of cash, poor credit, or are in the middle of a significant life-change, consider the stresses that becoming a homeowner could create for you and determine whether or not you feel comfortable or confident investing in such now.
More people are concerned about their financial future: 4 steps to protect yours
(BPT) - Finances are consistently a top concern for many Americans, with “saving money” a top-10 most common New Year’s resolution. This year, Americans are more concerned than ever before due to the uncertainty created by the COVID-19 pandemic.
USE Credit Union reported that more than 75% of non-transactional calls received since the start of the pandemic were from members concerned about their financial future, citing economic hardship as the primary reason for concern. The economy and job market remain in a state of constant flux, which is causing many families to worry about their ability to pay an unexpected bill, continue to pay off student loans, mortgages or credit card debt, or save money for the future.
“Saving money is more than just putting spare change into a coffee can, or simply ordering takeout less often,” said Jeff Schroeder, vice president and chief product officer at Mercury Insurance. “Sure, those things can add up over time, but people may find that their greatest savings can come from taking a look at the necessary expenses they pay for every month, such as insurance.”
Schroeder recommends these four tips to help protect your finances in the coming year:
1) Check your auto insurance coverages. There’s no reason to pay for more coverage than you need, but being underinsured can leave you exposed. “The cost of repairs after a collision has grown in recent years, as a result of more crossovers and SUVs on the road, and more technologically advanced vehicles,” said Schroeder. “Beyond paying for more expensive repairs if your insurance doesn’t cover it, if you’re underinsured, you may also be responsible for paying out of pocket for medical bills, which could potentially devastate savings for a down payment on a house, your child’s college tuition or a future vacation. It’s vitally important to make sure you have the right amount of auto insurance coverage to protect against unforeseen events.”
2) Know what your homeowners insurance covers. First and foremost, be sure to read your policy so you’re clear about what it does and doesn’t cover. It’s a good idea to check in with your insurance agent each year to ensure you have adequate coverage, especially if you’ve made renovations, own collectible or valuable items, or live in an area that’s prone to flooding or earthquakes, as standard homeowners insurance policies typically don’t cover these situations. Also, maintain a home inventory to make sure to have an accurate record of your belongings and property.
3) Be aware of potential gaps in coverage. A standard homeowners insurance policy often doesn’t cover mechanical failures to your home’s appliances, HVAC or other essential systems, nor does it cover a break to service lines on your property that supply your home with electricity, gas or sewer functions. In either of these scenarios, this means you would be responsible for writing a big check to a repair company or having to purchase a pricy replacement. However, adding home systems protection and service line protection endorsements can help provide coverage for costly repairs and replacements, saving money and your peace of mind. Pennies spent now can save you thousands of dollars later.
4) Regularly shop for the best coverage and price. Insurance prices can vary significantly from company to company, so it’s a good idea to take a few minutes to see if you’re getting a good deal. Shop around at least once a year — making sure to look for the exact same coverage limits — to see if you can find a more affordable rate.
“Often, regional insurers like Mercury Insurance are more attuned to their policyholders' needs and can offer better rates,” Schroeder added.
The most effective way to make sure your finances are minimally impacted by insurance costs this year is to speak to an independent insurance agent. They can help make sure you have the proper amount and type of coverage to keep yourself, your family and property protected.
Tips to help make the most of your health plan in 2021
(BPT) - Last year was a difficult year as the COVID-19 pandemic swept through our country, impacting families and communities nationwide. The health challenges of the pandemic also provided a crucial reminder about the importance of health care.
For many Americans, new health plan benefits began in January. If this is your situation, now is the perfect time to learn how to maximize this year’s health benefits, which may help improve your health — and possibly save money too.
Ann Marie O’Brien, R.N., national director of health strategies at UnitedHealthcare, provides the following tips to help you take charge of your health and get the most out of your plan in 2021:
Becoming familiar with your new health plan — especially at the start of a new year — is one way to help you be proactive when it comes to your health. For more health and wellness information, visit UHC.com.
Tax season 2020 will look different: Here's how to prepare
(BPT) - It’s no secret that 2020 has been a tumultuous year. Due to the COVID-19 pandemic, many Americans found themselves out of work — at least temporarily — and received unemployment benefits. Others may have experienced employment changes, like working from home or taking on multiple jobs. All of these factors will have even more of an impact come time to file income taxes on tax day, April 15, 2021.
“For many, the 2020 tax season will likely look different,” says Mark Steber, Chief Tax Information Officer at Jackson Hewitt Tax Services. “The pandemic brought unexpected, overwhelming changes.”
To help you prepare and get the maximum tax refund you deserve, Steber offers the following tax tips.
1. Understand how unemployment benefits work
If you received unemployment benefits this year, it may have been for the first time. Make sure you’re aware of how they affect your taxes.
Unemployment benefits are taxable and must be reported to the IRS on your tax return. Taxable benefits also include any special compensation authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act earlier this year. That means if you did not withhold enough taxes from your unemployment benefits, you could see a big tax bill or a much smaller tax refund than you normally receive.
Unemployment benefits can affect tax credits. Unemployment is considered unearned income, so it won’t count toward certain credits. For example, you must have earned income to qualify for the Child Tax Credit or the Earned Income Tax Credit. Additionally, your adjusted gross income must be below certain levels to get certain credits.
2. Set money aside to cover unexpected taxes
If you received unemployment benefits and did not withhold any federal or state income tax, you’ll need to pay tax on that money. To prepare, consider setting money aside now to cover those taxes on your 2020 return and brace yourself for a much smaller refund or no refund at all this tax season.
3. Take advantage of possible deductions
Every taxpayer will get a charitable donation deduction for 2020. Make a list of any IRS-approved donations you made this year and locate any receipts. Whether itemizing or taking the standard deduction, under the CARES Act, all taxpayers are eligible to deduct up to $300 worth of monetary donations to qualified organizations.
And while many Americans have been working at home for months, a home office deduction is not guaranteed. The home office deduction is only available to those who are self-employed.
4. Consider major life changes
Life goes on, even during a pandemic, and life changes can bring sizeable tax implications. Some changes that cause the biggest impact include getting married or divorced, having a baby or adopting a child, buying or selling property, retiring, or starting a business. If you experienced any of these events in 2020, know that your return will look different.
5. Keep track of important documents
Even if your taxes won’t be affected by unemployment, make sure you gather all your documents, such as W-2 forms and 1099s for interest dividends and even retirement distributions. Remember to include the Notice 1444 you received with your stimulus check for your 2020 tax records. Collect your charitable contribution totals, mortgage interest, property taxes you’ve paid, and any additional state and local income taxes paid for the year. If you were furloughed and able to pick up a temporary job, gather your W-2s for each job you worked. If you worked a side gig, make sure to keep a record of your income, the miles you drove, and any additional expenses. And if you’re not filing single, be on the lookout for family members that may have been impacted to make your tax return more complicated.
No matter your 2020 situation, follow these tips to prepare for any unexpected tax implications. For more information and help during the 2020 tax season, visit jacksonhewitt.com.
Most Americans say they're optimistic about a brighter financial future in 2021
(BPT) - As we enter 2021, here’s one more essential item to put on your list in addition to canned goods and masks: a financial checkup. According to Fidelity Investments’ 2021 New Year Financial Resolutions Study, more than two-thirds of Americans experienced financial setbacks in 2020, often from the loss of a job or household income or another emergency expense. Even those lucky enough to maintain their income still may have had to tap savings to help others, as nearly one in five attribute their financial setback to providing “unexpected financial assistance to family members or friends.” Despite this, many Americans remain optimistic and determined to make their money work harder in the New Year, with 72% confident they’ll be in a better financial position in 2021.
“Americans are clearly ready to leave 2020 behind and start 2021 off on the right foot, including when it comes to their finances,” said Stacey Watson, senior vice president with oversight for Life Event Planning at Fidelity Investments. “This year’s top financial resolutions are consistent with what we’ve seen in the past, however, what makes 2021 unique is how people will achieve them, given the financial pressures and major life events many continue to experience throughout the pandemic.”
This year, 65% of Americans are considering a financial resolution for 2021, which is down marginally from last year (67%), but still quite strong given the headwinds experienced by so many families. Younger generations appear to be more committed to actively improving their finances in the new year, with 78% of all Gen Z and Millennial respondents considering a financial resolution compared to 59% of all Gen X and Boomers.
“Younger generations are building up their careers, families and finances, so it makes sense they have important financial resolutions to make. Still, Gen-X-ers and Boomers also experienced significant financial challenges in 2020 and may want to consider making some resolutions of their own to build a stronger financial future particularly when it comes to retirement readiness,” continued Watson.
Making a resolution, and checking it twice
Resolutions are an important start, but the key is to keep good financial routines going strong well beyond January — and ultimately have them become life-long habits. The study reveals the key to a successful resolution is the good feeling of making progress and setting clear and specific financial goals. Having someone to help keep you on track and hold you accountable also plays a role, as nearly one-in-five indicated this was a major reason they were able to stick to a financial resolution last year. In fact, more than three-quarters (77%) of people working with a financial professional were able to stick to their financial resolution in 2020, compared to just half (50%) of those who did not work with one.
Putting 2020 in the rearview
To help build a better financial future, consider these three things you can do to move forward:
To get more tips for making and keeping your financial resolutions, visit Fidelity.com.
This study presents the findings of a national online survey, consisting of 3,011 adults, 18 years of age and older. The generations are defined as: Baby Boomers (ages 56-74), Gen X (ages 40-55), millennials (ages24-39), and Gen Z (ages 18-23; although this generation has a wider range, we only surveyed adults for the purposes of this survey). Interviewing for this CARAVAN® Survey was conducted October 14-21, 2020 by Engine Insights, which is not affiliated with Fidelity Investments. The results of this survey may not be representative of all adults meeting the same criteria as those surveyed for this study. Margin of error is +/- 1.79% at the 95% confidence level. Smaller subgroups will have larger error margins.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
Financial anxiety weighing on your mental health? Try these 3 tips to cope.
The global coronavirus pandemic has caused emotional distress and financial upheaval for people around the world. Many Americans are dealing with daunting issues that could jeopardize their financial future, whether it’s unexpected health care costs, unemployment and loss of income, the market’s impact on 401(k)s and other investments, or the need to postpone retirement plans. With these COVID-19 disruptions come financial anxiety and increased emotional concern that can become all-consuming and greatly impact your mental health.
Learn how to cope by reading the full article here.
Getting your financial house in order doesn’t have to be a burden. Follow these tips to establish a budget and begin building healthier money habits! Read the full article here.
In order to keep your financial and personal information safe, it’s necessary to look for red flags and be proactive about security. Here's important information to help safeguard your money, your personal information, and your family today.
(BPT) - You work hard for your money. Unfortunately, crooks work hard as well, attempting various tactics to take your money. If you fall for a scam, little can be done to help you get your money back. In order to keep your financial and personal information safe, it’s necessary to look for red flags and be proactive about security.
Know the red flags
From classic methods to using sophisticated technology, criminals will try a variety of strategies to gain access to your money. If you experience any of the following, consider it a red flag and pause before you act:
Learn the do's and don'ts
The Bank of America Privacy and Security Center provides key actions you can take to help protect yourself from becoming the victim of a scam:
Learn more and find out about the latest scam and fraud prevention news by visiting www.bankofamerica.com/security.
¹Transactions typically occur in minutes when the recipient’s email address or U.S. mobile number is already enrolled with Zelle.
Zelle and the Zelle-related marks are wholly owned by Early Warning Services, LLC and are used herein under license.
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