Managing Your Finances After Buying Your First Home

If you are young and buying your first home, it can be a very scary time in your life. However, it’s also very exciting to think that you are going to own your property for the first time ever. This is truly the American Dream at work! Chances are, your mortgage payment will be more expensive than whatever rent you were paying before you were a homeowner. You may be worried about how to budget after you close on the house, but you will catch on quicker than you think. If you couldn’t afford the house, the bank wouldn’t have given you the loan, so get ready to crunch some numbers and enjoy the first year living in your new abode.

Pay Attention to Your Lending Officer

Before your loan is even approved, your lending officer should sit down with you at the bank and give you a quick run down of the numbers. If they don’t, you should ask them to do so, or find a lending officer that will; it’s totally OK to shop around for lenders, especially in this economy. When you meet with your lending officer, don’t be afraid to ask questions and/or take notes. When you lock in your interest rate, they will tell you exactly what your mortgage payment will be, and if you choose to keep your taxes and homeowner’s insurance in escrow, they will calculate that in, as well. Pay attention to that monthly number, and use that to set your new budget.

Set a New Budget

Hopefully, if you’ve bought a house, you have already set some sort of budget for your living expenses pre-homeownership. If you have, it should be relatively easy to set a new budget that accounts for your increased living expenses. Just plug-in the number from the bank for your monthly payments and make adjustments as necessary. You will have to cut some things out; that is almost inevitable. However, make sure it is something you can live with. Spend less money on clothes, for example, rather than cutting your grocery budget in half. You need to eat!

Communicate with Your Partner or Roommate

If you are buying this house with your spouse or partner, or if you are having someone move in and pay rent, be sure to communicate expectations and concerns openly. This can make or break a partnership when it comes time to pay all that money at closing. When you figure out what everyone owes, make sure you tell everyone upfront. If you are having a renter live with you, it’s not a bad idea to draw up a lease arrangement and have a lawyer look at it. That can save you a lot of trouble down the road.

Learn to Cook

Cooking your own food can be significantly less expensive than eating out every night. When you cook, you often have lots of leftovers, too, which you can eat the next night or for lunch the next day. It would be such a shame to waste your new, awesome kitchen in your new house, so if you don’t already know how to cook some simple meals, now is a great time to learn how.

Find Free Entertainment

Entertainment is what costs most people the most out of their budget. Once you learn how to cook, you can also find some free or inexpensive entertainment options. Staying in can be fun, too. You can go to the library and rent movies and music for free, or visit your local park and explore your new town.

How to Deal with Losing Your Wallet

Your wallet contains a plethora of information about you, from your cards and license, to your cash. Losing it means losing all that it contained, and that puts you in grave danger, because you run the risk of identity theft. You need to be aware what needs to be done in such a case to protect yourself from things like credit car fraud, identity theft, etc. Once you get over the initial shock of losing a wallet, it’s time to think clearly. Do not panic (easier said than done, I agree). Think of ways to amend the situation. Here’s how.

Dealing with the Loss of Your Wallet

– Once you are sure the wallet is not on you, hunt for it. Try to remember where you last used it, where you were when you last used it, what did you use it for, etc. Rake your brains and see if you recall where you put it back once you finished using it. Then look for it again in those places.
– If you are sure you have lost it, call the place you last visited with your wallet. Most public places like shopping malls have a lost-and-found center, so chances are if they have come across the wallet, it might have been deposited at some such center. You will need to identify yourself on the phone with some sort of ID.
– If you own a debit card, call your bank and report the loss immediately. A debit card in the hands of strangers is an extremely risky proposition. You must report the loss within two business days, this ensures that you will not be charged anything more than $50 for unauthorized use. If you delay it further, the liability goes up to $500. Contact the bank’s fraud department and report that the debit card has been stolen/lost.
– Call the credit card company without further delay to minimize the chances of credit card fraud. Cancel all credit cards. The maximum liability you will face is $50, even if the card is used before you have even reported that it’s stolen or missing. Bear in mind though, if you have an outstanding balance on your credit card, canceling it is not a very good idea, as it can hamper your credit score. In such a case, specifically inform the credit card company that the card is lost. Most card companies have rules and regulations in place to deal with such a scenario. You can instead request for a new account number.
– The next step you must do is file a stolen wallet report with the police. Be prepared to answer a multitude of questions. You will need to let them in on all details, from where you were at the time of loss, description of the wallet and all the items it contained, and any suspects. This step is important, it can help you in the long run, especially with identity theft and insurance claims.
– Call all the three major credit bureaus (Equifax, TransUnion, and Experian). Report that you have lost all your cards and ask them to issue a fraud alert on your account.
– Contact the DMV (Department of Motor Vehicles) and report the loss of your license. The rules for reissuing of a driver’s license depend on which state you reside in. Find out the exact procedures you need to follow while applying for a replacement license.
– If your wallet contained any set of house or car keys, get the locks changed without any delay. You may eventually get back your stolen keys, but you do not want to face any risk in case they have been duplicated during that time.
– Companies like Debix, LifeLock, and TrustedID offer protection and insurance against identity theft. These companies offer services at less than $10 per month, and in case you become a victim of identity theft, you can be assured your credit and identity will be restored.
– If your wallet contained blank checks, notify your bank. If you have anyway requested for a new checking account, your account will have become inoperative. But to be on the safer side, the Federal Trade Commission advises that anyone who has lost a blank check should call and confirm with the three major check verification services, namely TeleCheck, Certegy, and International Check Services, whether the check is being used to pay at any store anywhere.
– You should also cancel any department-store issued credit cards, library cards or any other membership cards your wallet contained, especially if they have your Social Security Number printed on them.
– Every now and then, go through your bank statements and report any unauthorized transfers and withdrawals to the card issuing company.

To minimize the dangers associated with losing your wallet, keep a few tips in mind. Carry only the bare essentials you need. Do not carry any sensitive information like passwords, account numbers, information related to your children in your wallet. Limit the number of credit and debit cards you keep with you. Never ever carry your Social Security card in your wallet! And at all times, know what all items your wallet contains, so if you misplace it, you know what all you have lost. As bad as it may be, remember, that losing a wallet is not the end of the world. Knowing what needs to be done and following the steps above will reduce your stress, if at all you realize your personal information is in peril and you could be a potential victim of identity theft.

How to Keep Track of Your Money

Before we take a look at few ways to keep track of your money, here is a simple test. Ask yourself these questions, and answer with a ‘yes’ or a ‘no’.

– Do I owe anyone money?
– Do I borrow money too often?
– Am I usually late to pay my bills?
– Have I put off doing something that I actually need to get done but can’t because I can’t afford it?
– Do I run out of money before my next paycheck arrives?

If you answered most of the above questions with a ‘Yes’, there is no other way to break it to you but to say – you need help, friend! It is not everybody’s cup of tea to manage their personal finances. However, the good news is, you can learn to do it pretty soon and quite effectively too. The following tips on how to keep track of your money are going to help you save money. It is never a good idea to live paycheck to paycheck; so if you don’t want to do that, follow the tips given below and start keeping a tab on your money!

Ways to Keep Track of Your Money

Wallet
Know the exact contents of your wallet. That does not mean you should keep track of every single penny that you put in or remove from your wallet. But it always helps to know how much money you have in your wallet. It even saves you from embarrassment – what if you were to have coffee with a nice girl in a nice cafe and you discovered you had no money left in your wallet? I wouldn’t want to be the girl with you! (Just kidding… I hope that never happens to you.)

Tip: Check in the morning before you leave the house how much money you have in your wallet. Even if you find some of it missing, you have only a day’s expenses to cross-check and trace back your missing money.

Expenses
It is best to keep track of your expenses to know exactly how much money you spend and on what. Many a time it so happens that we do not remember how much money we spent. We buy a box of liquor chocolates and forget we bought it. We pick up a bottle of wine on our way to someone’s house and forget we did. And then we rack our brains trying to remember where it is that the money was spent! So keep a track of your expenses. You can keep a record in a small pocket diary. If you want to be all pro, you can do the same on an iPad!

Tip: Do this daily (at the end of the day, before you hit the sack) and you won’t even have to keep a diary! It is not important to actually ‘write’ down all your expenses; even a mental check can suffice, as long as you are absolutely sure.

Credit
This is how credit cards work (in the simplest, crudest terms) – they (credit union) give you money to use for free. They give you a time limit within which you have to return the money. But if you fail to return it in that time, they charge you an interest such that you eventually end up returning a lot more than you borrowed! Now the problem is, somewhere we have this psychological block in our heads – credit card is somebody else’s money, so even if I overspend, ‘my’ money is still intact. So we tend to overspend. But that is so wrong, for we all know that ultimately we have to pay the credit card bill from our own money. Plus credit card bills are always unbelievable. We take one look at the bill, and we are like ‘Damn! When did I spend that much money?’

Tip: Switch to using an ATM card or a debit card. That way, you would think twice before spending, as it would be ‘your’ money. Also all your transactions will show in your monthly bank account statement. It makes keeping a track easier.

Budget
Set yourself a budget and do not spend outside the budget. If you do, make sure to keep a track of what you spent the extra money on. Did you indulge in a shopping spree? Did you lend anyone money? Were you hit by some unexpected expenses? Medicine? Dinner? Trip to somewhere? Keeping track of your money when you are out on a small trip, holiday or vacation becomes almost impossible. Everybody is in the mood to spend. It is essential you set yourself a budget to keep track in such cases.

Tip: Keep a comfortable margin. Too low a budget can make it seem like you are overspending all the time, when actually you are not. It can bog you down! Take into account all your monthly expenses before setting a budget.

Account
Monitor your bank account vigilantly. It is the world of e-banking, so make sure you subscribe for an electronic monthly statement of your bank account, and make sure you actually go through the statement when it arrives and check for any transactions that seem fishy or unaccountable. I do hope this never happens to you, but a possibility of theft cannot be overruled. Credit card scams are not something unheard of. A lot of people have a lot of reasons (though wrong ones) to tamper with people’s bank accounts. It is better to be careful than sorry!

Tip: Train yourself to read through the bank statement carefully. Do not simply throw it in the trash can. It hardly takes a few minutes. Also report any unusual transactions immediately, without further ado.

So those were some personal finance tips that will help you keep track of your money. Train yourself to deal with money responsibly. You can inculcate responsibility in your children right from their tender years, so that they learn to use money carefully from an early age. Everything in life is not about money, yes. But many important things are – food, clothing, shelter, medical help, for starters. So it is always a good idea to save and invest. Hope the above tricks and tips help you out. Cheers!

Managing Your Joint Finances

People are getting married later in life now. More and more couples are waiting until after certain milestones are achieved, such as graduating from school or attaining job security. This means that more and more people are independently financially stable before merging their lives – and money – with someone else. That can spell trouble for a new couple; when two people who are used to spending freely without consulting someone else are all of a sudden asked to share financial responsibilities. As a newly married woman, I have first hand experience with how difficult it can be to merge finances with the love of your life. We were both employed long before we met, and financially stable as independent people. Rationally, one might think that would mean we would be financially stable as a couple, but creating one budget from two independent ones is sometimes more difficult than it looks. No one can say what will definitely work for you, but here are a few tips to keep your heads above water.

Where Did the Money Go?

Even if you and your partner keep your finances mostly separate, you are still jointly responsible for rent or mortgage payments, food, and other shared expenses. When each of you are spending money from your joint accounts outside those shared responsibilities, you might find that your money is disappearing faster than anticipated. A good way to keep track of joint cash flow is to keep a budget somewhere you both can see and update it every time one of you spends any money. We keep a dry-erase board on our refrigerator with categories like Food, Entertainment, Gifts, etc. and monthly denominations written under them. For example, we like to spend under $500 per month on food, so the Food category has $500 written under it. Every time one of us spends shared money on food, we subtract that amount from the monthly total. Needless to say, when it gets to the end of each month, we end up eating a lot of inexpensive foods such as pasta and Ramen noodles, but at least we’re within our budget!

Set Priorities Early On

Is it important to you both to save for a house? Go on vacations? Buy a new computer? Start planning for children? Regardless of your priorities, it is valuable to set your priorities with your partner early on. You both have hopes and dreams for your life together, and usually those hopes and dreams cost money. No matter what you’re saving for, having concrete goals can help you stay on track. It also helps to know how much you realistically need to save. $1,500 won’t make an effective down payment on a house, for example, but it can buy a really nice computer. Discuss your goals with your partner, and decide what to save each month, and how that savings will be used.

Be Open to Change

Your life together right now doesn’t look like what it will look like five, ten, or fifteen years down the road. Things happen and situations change, and for better or worse, it is ineffective to use the same budget when your financial situations are different. Your spending habits will not be the same when you are first married as they are when you buy your first home or have your first child, for example, and every subsequent change means a change in your budgeting. Don’t try to stick to the financial system that worked for you just because it had worked at one point. There’s nothing wrong with reevaluating how your joint finances are handled when your lives change.

Talk, Talk, Talk!

Communicate about your finances. I cannot stress this enough! If you don’t talk about where your money is going, what you dream for your future together, and how your lives are changing, it will be impossible to reach an effective decision on financial matters. It is frequently said that money is one of the main reasons couples split up, but taking time to discuss your joint financial situation can help alleviate stress when it comes to spending and saving money.