The right time to buy is a personal choice and a lot of research and preparation should be done prior, to make sure it’s the right decision for you. Just because you can pay rent of $1500/m doesn’t mean you can afford a mortgage payment of $1500. There are many other things that you pay for when you own a house versus renting. Furnaces, roofs, AC units, leaky pipes, etc are all a home owners responsibility.
The more you put down the faster you’ll pay off your home and the cheaper the mortgage will be. If you put less than 20% down, you will have to pay mortgage insurance. The price varies depending on how much you put down. Also the more of a down payment you have the smaller your mortgage payment will likely be.
As much as you can. The more you save, the more you’ll have. Saving comes down to how much you’re willing to sacrifice in order to have whatever it is you want. I save for both short term and long term goals. It’s less motivating if you’re just saving for retirement and you’re only in your twenties or thirties. It’s very important to have short term goals to stay motivated.
I am not a big fan of credit cards at all, but I do understand that a lot of people have them. If you are going to get one, or already have one, please check to see if you are paying an annual fee. You may not need whatever it is they are offering to pay that fee. If that’s the case, cancel the annual fee. Also, always ask for a cheaper rate. You will be surprised how easy this is.
The number one rule with credit cards is, if you can’t pay it off by the end of the month, you can’t afford it. Plain and simple!
Any debt is too much if you loose your job, and don’t have an emergency fund to help you until you get back on your feet. Loosing a job isn’t as bad when you have no debt.
I don’t think there is an exact age because all kids mature at different ages. Gradually have age appropriate money conversations as they ask questions. Talking to a three year old about mutual funds is probably not the best idea. The most important concepts to teach is to save, give, and spend. If kids understand this, they will likely become financially savvy adults.
This is a personal choice, but there should be a healthy balance. I have always been a saver, so saving is extremely easy for me. Giving and spending I have to make more of an effort. I like percentages, so that’s what I do. I give a percentage of my income, I save a percentage, and I spend a percentage. Percentages help to balance things out. It also helps if your income fluctuates.
Budgeting is the easiest way. It’s important to be able to spend, but spending has to be budgeted or you may find yourself overspending. Doing a monthly or bi-weekly budget is key. You have to know how much you make, and what your expenses are. Lay everything out and figure out how much you need for your bills, how much you want to save, give, and spend. Some other things to consider are:
- Only go shopping when you need something. Don’t window shop
- Go shopping with a list
- Don’t eat at malls if you are going out to eat
- Write down everything you spend for a month, and go over the list after the month. You will see patterns that you can eliminate from your day to day life.
9. I am living paycheck to paycheck and I don’t have money to do anything?
10. Should I get a loan or a line of credit?
Neither, save the money and buy it yourself! I’ve seen people get a line of credit to pay off a loan, which is just a transfer of debt. Line of credit interest rates are lower than loan rates because line of credits are often variable rates and loans are fixed rates. At the end of the day, they both have to be repaid, so save the money.