Home Buying Tips: Part 2

In continuation from last week, today’s blog will be tips for the home buying process. Let’s talk about how to find the right home for you!

When looking for a place to live, it is important to consider the community. You should pick a community that corresponds to your family’s needs. Do you have children? If yes, you would probably want to live in a good school district. How close to the freeway or public transportation do you want to be? Do you want to live in a busy area or a more quiet setting? These are the types of questions you need to ask yourself. When you are considering a neighborhood, take a look around it and talk to the people who live there. You will be surprised how much useful information they can divulge.

Eventually, you will find a home you like and schedule a showing. When you are walking through the house, ask yourself:

·         Is there enough space for the present and the future?

·         Do you like the floor plan?

·         Is the yard what you want?

·         Do all the appliances work?

·         Does the home look to be in good condition?

·         Is it the right number of bed and bath rooms?

·         Will all your furniture fit? (Both in size and style)

It is important to find out what appliances and fixtures will be left and what the sellers are taking with them. Also, you want to picture (and possibly see) the home in different weather and times of day. This is the best way to really understand the home and the neighborhood. You don’t want to face any surprises after you are in contract.

When viewing homes, you should take a lot of pictures. You should capture the inside, outside, all the rooms and the yard. Also keep an eye out for anything you think may be an issue. If you don’t get all the pictures you want the first time, you can always go back for a second look. Also, ask your realtor for his/her professional opinion -they are a great resource.

Searching for the right home can be a long and daunting process. There is no set “magic number” of homes you should look at before you make your decision. You just need to keep looking until you find what you want. On average, you can expect to see between 10 and 20 homes before you find the right one. The best way to streamline the process is to make sure your agent knows everything that is important to you. This will ensure that you don’t waste time looking at places you know you don’t like.

I hope this makes your home buying process a little easier. Next week I will go over what to do once you found the home you want.

As always, feel free to ask a question or leave a comment below. Have great rest of the week!

How to Manage Your Finances

Today, I’m going to give advice on managing your cash flow. One of the most important to consider, when managing your personal finances, is to treat yourself as a business. Businesses live and die on cash flow. If a business runs out of cash, it fails.

Managing your cash flow in today’s world is necessary for financial success. The first step is to log all your income sources. For most, this is easy. Include all ways you get money. Obviously the biggest source is probably your job. Others include money from investments, interest, bonuses, child support, alimony, and allowances.

Next, you want to estimate your expenses. Include everything you spend money on. Groceries, gas, tuition, utilities, rent, credit card payments, mortgages, eating out, insurance, and anything else you can think of.

The next step is to put everything into a spreadsheet. This is important because it gives you an easy way to view all the information and make comparisons. Start your spreadsheet with you income page. The spreadsheet will have three columns for each month; estimated, actual, and variance. This will include all those sources of income you just listed. List the items in whatever order you wish, with a summation of total income at the bottom. Then you want to estimate the how much you will earn from each item each month, and sum them at the bottom.

The next page will be your expenses page. This should be set up in the same manner as the income page, except there will be categories. The two major categories are fixed and variable expenses. Fixed expenses are those which you know you will have to pay each month and have a cost which does not change. Examples of fixed expenses are insurance premiums, rent, mortgages, and loan payments. Credit card bills can be included, only if you pay the same amount every month. Variable expenses are everything else. You want to break up your variable expenses into categories, as well. These categories can be anything you like. It is best to break them up in a way which makes it easier for you to visualize. I use food/drink, transportation, entertainment, personal care, wardrobe, and gifts. Then, as with your income, you need to estimate all the expenses for each month. You should do this for at least four months.

Once you have all your income and expenses estimated, you can see if you are at a surplus (extra cash) or deficit (negative cash) and adjust your spending accordingly. The benefit of this is that if you know you are not going to have enough income to cover all your expenses, in a given month, you can do something about it. You can spend less the month before or plan on having to use your credit card. At the end of every month, you need to fill the “actual” column with what you actually earned and spent; then subtract those numbers from your estimates to get your “variance”. The goal is to have your variance equal zero. The closer your variance is to zero, the better you are at estimating your income and expenses.

This is the best way to manage your finances; it gives you an excellent visual breakdown of all your expenses and allows you to adjust. It also connects you with your finances so you are more in touch with what you spend your money on, which is a great way to make sure you don’t over spend.

There are many computer programs which can help you set this up.  I fine Microsoft Excel works best for me. If you have any questions or comments, feel free to leave them below and I will get back to you as soon as I can.