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October 23rd, 2013 by admin
Janine, a young 20-something student at the University of Alberta is pursuing a career/major in Accounting. She is passionate about financial literacy and includes tips on her blog, My Pennies, My Thoughts, that chronicles her life through her early-to-mid-twenties. The blog documents how she plans to accomplish financial freedom as well as the musings of her own triumphs and of course all the little bumps along the way. Read more at : http://mypenniesmythoughts.com/
How To: Move Out of Your Parent’s House
This is dumb for two reasons. First, I’m not sure why people feel so entitled that their parents should basically fund their down payment. If you’re living at home rent free while working full time so that you can save up for a down payment, it’s not really you saving up for it. In reality it’s your parents money your using for your down payment because you would have paid them at least a portion had you been paying rent to them. How is that fair to your parents?
Our generation is entitled, and that’s how a lot of older generations view us. Moving out, building a budget and making a plan to save up for a down payment while paying for your own living expenses is the adult thing to do. I don’t understand why so many 20-somethings think they shouldn’t have living expenses.
The second reason this particular statement is a stupid reason for not moving out is the interest on a mortgage. If you don’t want to pay $700 a month for rent because you are “paying someone else’s mortgage” think about the $9,000 per year (or $750 a month) you are blowing on interest ($300,000 mortgage at 3%). This doesn’t even scratch the surface of the other cost owner’s incur (read condo fees, maintenance, home insurance).
So now that we have established moving out is a good idea, here’s how you can do it.
Step 1: Set a date
Whether you are moving out all by yourself or in with friends/significant others setting a date gives you a timeline to work with. Because I live in Canada I wasn’t thrilled with the idea of moving in the middle of winter and I didn’t want to do it part way through the semester so I chose the beginning of the school year!
Step 2: Build a budget
Know how much you are willing to pay for rent and figure out your utilities and grocery bills. Then add on an extra under dollars or so because it always costs more than you think it will. For tips on building a budget as a student click HERE.
Step 3: Live like you’ve already moved out
This was one of the best things I’ve ever done. I worked full-time for eight months before moving out and each month I would stash away “rent payments” for two reasons. The first was to get myself used to having bills to pay and the second was that so when I returned to school I’d have money to supplement my income.
Step 4: Acquire pieces slowly
Whether it’s before or after you’ve moved out I would advise buying things slowly. Obviously you need the basics: a bed, dishes, and table. But you don’t need to furnish your entire home in one go. We live in an era where everyone has to have everything right now and that just isn’t the case. Saving up for a nice couch or bookshelves instead of buying the first thing you lay eyes on will not only teach you patience but you’ll probably be able to do some research on the most budget-friendly option and you will be able to find the sectional of your dreams! Heck, the condo is still an on-going work-in-progress!
Step 5: Get help moving
Recruit family and friends to help out with moving. I had such a fantastic group of people help me move my things out of my parents, I didn’t have to rent a moving truck which I’m sure saved me a lot of money.
While moving out of your parents may seem incredibly intimidating know that everything will always work out. It always does, and if you’re focused you will always get by. The lessons I’ve learned this past year are invaluable and I wouldn’t trade them for the world.
Readers, what are your tips to students or new grads wanting to move out of their parents?
May 7th, 2012 by admin
If you do not have one already, credit organizations will soon be trying to offer you a student credit card. Used properly, credit cards can boost your credit rating and make managing your finances simpler by reducing a multitude of payments, some of which can be made automatically to a single payment per month.
The bad news is that credit cards can be really expensive and these costs can sneak up on you and overwhelm you before you know it. Credit cards come with many fees, some up front, some hidden in fine print agreements that can create unexpected problems for you.
The worst aspects of credit cards only appear if you are late on your payments. Interest fees and interest charges can pile on quickly, especially when the attractive interest rate you were offered to get you to sign up suddenly increases (as per the fine print agreement).
Credit cards can weaken your resolve and lead to overspending. If you have a credit card, you should never ask yourself if you can afford the monthly payment for all of your purchases. Instead, as with everything you buy, you should ask yourself if you really need it and if so, if you can afford to pay for it when the bill comes due at the end of the month.
Keeping track of payments tip: only have 1 credit card!
Payments can be easily tracked online and downloaded. Personal finance software or spreadsheets can help you track and manage both your spending and payments, helping you keep track of your budget.
Tips for Credit Card Management
- Shop for credit carefully– check interest charged and annual fees and apply for the credit card that suits your budget.
- Pay off the entire monthly balance to avoid interest charges, or make the biggest payment possible you can, over and above the minimum monthly payment.
- Remember bargains are not really bargains if you end up paying interest on your credit card.
- The dollar you spend today on credit is one dollar you won’t have in the future. It’s important to understand whether the purchase is a “want” or a “need.”
- Keep your credit card receipts and review your credit card statements monthly to make sure there are no errors.
- Set a monthly limit for each credit card – once you reach your limit, put your credit card away to avoid over-spending.
- Remember the monthly budget for your credit card spending is a maximum spending limit, not a minimum.
April 10th, 2012 by admin
Have you ever walked into a store to buy a sweater, only to leave with that sweater, a pair of jeans, a belt and accessories? Many of us have a problem with impulse buying and purchasing items we don’t really need.
If you’re an impulse buyer, here are a few tips to help you resist:
- Avoid or limit trips to malls and online buying sites
- Pay cash for items – it’s harder to part with than swiping a credit or debit card
- Leave your credit card at home
- If you see an item you really want – sleep on it. Do you feel you still can’t live without it the next day?
- Keep in mind your latte factor – and that small items really add up
Before I buy:
Don’t just blindly buy an item – really give some thought to your next purchase. Ask yourself the following:
- Do I really need it?
- If I don’t need it, do I really, really want it?
- Will this item make me happier?
- Am I sure I will use this item often?
- If I buy this item now, will I have enough money for stuff I might need or want later this week, or later this month?
- Will buying this item interfere with paying off debt?
- Do I have the money for this item now, or can I wait to buy it so I can
- save for it?
- Can I get it cheaper somewhere else?
- Do I have an item, or can I buy a cheaper item, similar to this one?
If you think about these questions and answer them honestly, you’ll get a good idea of whether or not you should buy the item. If you said yes to questions 1, 2, 3, 4, 5, 7, and no to 6, 8 and 9, chances are this is a good purchase for you.