Something On My Mind

PFT #101 - Personal Finance Tip of the Week: Can You Afford a Home?

Seeing that 75% of Americans live paycheck-paycheck and can’t afford to retire at 65 years of age, this means that they cannot afford their homes. With this statement you may think that is not right! People stay in their homes without missing payments throughout their lives.This may be true; however, when you look at it holistically, a different viewpoint emerges. So let’s discuss.According to the AP average price of a home is $414,000. With this scenario, Nerd Wallet says the average payment is 9%. So this comes to $37,260 leaving a mortgage of $376,470.Closing costs average between 2-5% and by taking that 2% the mortgage comes to $384,000; and using an average interest rate of 7%, the payment comes to $2,874.Okay that’s doable; however, we have also need to factor in averages for: -Taxes at $3,200 or $271 per month-PMI at 1% of the mortgage amount is $,3,840 / 12 = $320 per month-Homeowners Insurance estimated at $2,400 / 12 = $200 per month Total Payment Scenario is: $37,260 down payment plus $3,665 each monthSo can you handle that? Keep in mind that this is a starter home which will no doubt need improvements before long or upfront. So this brings us to the rules that you must follow: 1) If you do not have an emergency fund (3-6 months of a stipend),2) A rainy day fund (to pay for unforeseen maintenance)3) No credit card interest4) You need to invest 10-15% of your gross income for retirementIf you cannot meet this criteria, then this means that you cannot afford the home. Eventually, you will run into a situation where you’ll need additional money that you don’t have which leads to additional borrowing, leading you down a rabbit hole.Now for the last thing . . . if you are already a homeowner and you don’t meet this criteria, consider making a change so that you can plan effectively your future.When it comes to your retirement, it’s not timing the market, it’s time in the market.The bottom line with homebuying is to be patient especially in times of high interest rates as the wrong decision can lead to several years of maintaining debt. Website  https://www.somethingonmymind.net/Social Mediahttps://www.instagram.com/somm.podcast/https://www.youtube.com/channel/UChec5qcZBcGkIhUU3belNDwhttps://www.tiktok.com/@somm.podcast?lang=enhttps://www.facebook.com/somm.podcasthttps://twitter.com/Somm_podcastWebsite  https://www.somethingonmymind.net/Personalfinance personalfinancetips investing stockmarket finance podcast budgeting retirement autoloans refinance credit cards 401(k) creditcards sidehustle debt-free FIREmovement budgeting studentloans mortgages wills trusts IRA economy creditscore

PFT #100 - Personal Finance Tip of the Week: Medical Bills, Deductibles and Copays

It’s no secret that medical bills are among the most significant expenses we face in our lifetimes. While we often can’t control the cost, there are several ways to soften the financial impact.Let’s perform a diagnosis—and a treatment plan:Verify Insurance Processing:When you receive a medical bill, confirm that your insurance claim has been fully processed. It’s common to receive a bill before insurance adjustments are applied. Ensuring the claim is complete helps you avoid overpaying and requesting reimbursement later.Consider Cash Payments:If you’re uninsured, have a high-deductible plan, or your insurance doesn’t cover a service, paying cash can be a smart financial move. Many providers offer discounted cash rates for labs, imaging, and outpatient procedures. Always ask about available discounts.Consider Medical Credit Cards:If cash flow is an issue, a medical credit card may be an option. However, choose this option if you can commit to paying off the balance within the promotional 0% interest period. Otherwise, you’ll owe the full accrued interest, which can be substantial.Compare Provider’s  Costs:If you need surgery or a procedure, ask whether your doctor operates at multiple locations as these costs can vary widely. Contact each billing department, request billing codes, and compare prices. By doing this, I reduced a $10,000 bill to $1,000—and after insurance, I paid just $300.Save on Prescriptions:For daily medications, request a bulk supply—such as a 90-day prescription instead of a 30-day refill—to save money. In my case, this approach reduced costs by about 40%. Also, explore discounted programs like GoodRx, and consider generic options when appropriate.Social Mediahttps://www.instagram.com/somm.podcast/https://www.youtube.com/channel/UChec5qcZBcGkIhUU3belNDw https://www.tiktok.com/@somm.podcast?lang=enhttps://www.facebook.com/somm.podcasthttps://twitter.com/Somm_podcastWebsite https://www.somethingonmymind.net/

PFT #99 - Personal Finance Tip of the Week: The Annual Escrow Analysis

For most owners, when they purchase their homes, the monthly mortgage payment is a fixed amount for 30-years and sometimes 15, people still become accustomed to a standard payment each month.On top of the mortgage payment is an escrow account established by the lender to manage payments typically for property taxes, homeowners insurance, and, in some cases, private mortgage insurance (PMI). So each month these expenses are wrapped up as the total monthly payment and the lender pays them on the homeowner’s behalf. However, when people sign on the dotted line, they are not informed that this payment may change on a yearly basis; and this is due to the yearly escrow analysis. This is one of those hidden budget tips that no one tells you about. So what may change? Over the course of a year, property taxes and insurance premiums may fluctuate. For the most part taxes will continue to rise as the world becomes less predictable with the environment. With natural disasters becoming more common, oftentimes homeowner’s insurance rates will increase in geographical areas where there weren't unfortunate events. The other common increase occurs in the first year of home ownership. Taxes are based on the assessed value of a home; however, these values are often suppressed meaning they are not accurately updated each year. Hence, in the first year of ownership, the assessed value can increase to be accurately reflected and this can generate a large spike in the overall tax amount. In addition, local governments may also increase your bill as property values rise each year or there may be cases where a millage is added to improve parks, libraries, community centers and the like. So what happens annually?The lender will review any changes and compare them with the initial cost estimates. If there is an increase, the lender will adjust the monthly escrow payment to cover the new amounts spread over the course of the year. In the event of a surplus of $50 or so, the lender is typically required to refund the excess amount. So how do I prepare? For the most part there is nothing that you can do. Know that if you filed an insurance  claim, or major disasters occurred  across the country or you bought a new home, or if your municipality has approved a special assessment, your taxes will most likely rise.This is why it is important to have available disposable income to account for the increases in your budget.Website  https://www.somethingonmymind.net/Merchandise https://www.somethingonmymind.net/shopSocial Mediahttps://www.instagram.com/somm.podcast/https://www.youtube.com/channel/UChec5qcZBcGkIhUU3belNDwhttps://www.tiktok.com/@somm.podcast?lang=enhttps://www.facebook.com/somm.podcasthttps://twitter.com/Somm_podcast

PFT #98 - Personal Finance Tip of the Week: Can You Find $100 in your Budget?

In the prior personal finance tip #97 which was how to save on the little things, we mentioned how to be awarded with Amazon digital credits for delaying delivery and we mentioned buying a monthly car wash plan. We also covered the value of buying long term products and services rather than single use items which occur multiple times. Lastly, we covered the value of buying products on the basis of consumption needs. Employing this mindset with all of your spending will watch your dollars add up. So we’d like to propose a challenge to you. Can you save $100 a month? For most people, the answer is yes and with that comes the ability to invest this money in    yourself. You could do this via tax deferred retirement accounts such as 401(k)s, Roth 401(k)s, Roth IRAs, traditional IRAs and 403(b)s and 457 plans. The other option is to have an individual brokerage account where you can buy fractional shares of stock in well-known companies. For example, your $100 monthly contribution may buy $5 worth of Apple, Nvidia, Microsoft, Tesla and so on. Many companies offer this including TB Bank, Charles Schwab, Stash and Fidelity where you can also invest money any way that you choose. All you need to do is set up a monthly withdrawal.Now for simplicity, let’s create a scenario of compound interest: you decide to invest your $100 each month into an S&P 500 fund. A well-known ticker is Vanguard’s VOO. After their expense ratio, it has yielded an annualized return of approximately 9.5% for the last 30 years. If you invest that $100 per month at that 9.5% interest, you’d have $181K in 30 years and $980K in 48 years - and this is where compound interest takes over. From years 31 through 48 this account would grow an astounding $699K. To take this further:For $200 a month: after 30 years, you’d have $362K and reach $1M in year 41For $300 a month: after 30 years, you’d have $543K and reach $1M in year 37For $400 a month: after 30 years, you’d have $724K and reach $1M in year 34So needless to say this is awesome; and all you have to do is make some minor adjustments throughout your budget. My advice is that you do not want to look back many years from now and say if I just would have eaten out one time less per month, or cut back on streaming subscriptions, bottled water or overspent during the holidays, I could have had all this money. So take this heart and pass the word because anyone can be a millionaire.Website  https://www.somethingonmymind.net/Merchandise https://www.somethingonmymind.net/shopSocial Mediahttps://www.instagram.com/somm.podcast/https://www.youtube.com/channel/UChec5qcZBcGkIhUU3belNDwhttps://www.tiktok.com/@somm.podcast?lang=enhttps://www.facebook.com/somm.podcasthttps://twitter.com/Somm_podcast

PFT #97 - Personal Finance Tip of the Week - The Little Things That Save You Money

Website  https://www.somethingonmymind.net/Merchandisehttps://www.somethingonmymind.net/shopSocial Media https://www.instagram.com/somm.podcast/https://www.youtube.com/channel/UChec5qcZBcGkIhUU3belNDwhttps://www.tiktok.com/@somm.podcast?lang=enhttps://www.facebook.com/somm.podcasthttps://twitter.com/Somm_podcastWhen it comes to budgeting, people think about the monthly expenses for items such as the mortgage/rent, car payment, grocery bill, subscriptions and so on. On the flip side there are costs that fall into the general spending category where the items are not fixed amounts. The way to manage this is to look at the repetitive activities throughout the year and decide if you can get more out of what you’ve purchased. In my case, I think about buying opportunities that I am given or I put thought into the new items that I will purchase. Let’s review a few of them.The easiest one for me is with my orders on Amazon. I'm often offered digital credits if my packages are delivered in 2-7 days rather than the next day. I usually get a few dollars per order and I use that for renting movies, buying books, music or apps. This really comes into play during the year-end holidays.Another one is the car wash. My wife washes her vehicle 3-4 times each month at $10. So we  purchased an unlimited monthly plan at $25 saving us $15 and that comes to a savings of $180 each year. One item that comes up periodically is bowling. We like to sprinkle this throughout the year, especially during the winter and with that comes renting shoes for my wife at $4 a pop. Now over the course of two years, it was more cost effective to purchase a permanent pair and over time that $4 stays in her pocket each time we hit the lanes.Here is an usual one regarding consumption. I bought a large bag of zip ties to help stake my plants and shrubs in the garden. They are a single use item; however, I insert flange in backwards so that it doesn’t lock, meaning that I can reuse them several times. Let’s do more: during my travels, in some cities, such as New York, using a taxi rather than an Uber or Lyft is less expensive by a wide margin. Okay, let’s wrap this up. When you incorporate this type of mindset with your purchases, the savings are small per transaction; however this money adds up over time. The beauty is that you save money without changing what you use or purchase. In addition, less consumption of items helps the environment.