2/29/12

Buying Blues: Tips for Buying Your First Home


I'm excited to introduce Amy Griffin as the guest blogger of this post. Amy is the creator of a site that helps readers learn how and where to hear a master's degree. She is also a guest author who enjoys writing about small business tips, finance, and educational options

So you’ve decided to buy your first home. That’s great! Congratulations! But now what? Are you really prepared to make this huge leap? The thought of a yard to yourself or a white picket fence may be making this decision sound like a good one, but you also need to consider a few other factors if you don’t want to find yourself in a financial mess. Buying a house isn’t just another impulse buy like that new shirt or a pack of gum at a store. It is a decision that will affect the rest of your life, so you need to cautious. These are a few tips you should take into consideration when you are buying your first house. If you follow them, you may be able to avoid making a huge mistake.
  •          Check your credit report – When you need to get a mortgage for your home, any lender you go to will look at your credit score to determine your mortgage qualifications. If your credit report is less than satisfactory, you should take a few months to improve it before you decide to look into buying a home.
  •          Figure out what you can afford – You don’t want to get your heart set on a beautiful home that you can’t afford. Before you even look at a house, you need to sit down and crunch the numbers. Figure out a monthly budget and find out exactly where your money is going. When you know that, you will be able to figure out how much you will be able to put towards your mortgage and other home expenses each month. If you can’t find a way to make it work, you may have to change your spending habits or find a new source of income before you start your house search.
  •          Determine what you need and what you want – Your first home isn’t necessarily the home you will be living in for the rest of your life, so it doesn’t have to be perfect. There are a lot of things you may want in a dream home (like five bedrooms or a backyard pool), but you don’t necessarily need those things now. Your first home isn’t necessarily going to be your dream home, but it should still have all of the things you need.
  •          Find a good real estate agent – This person is going to be there for you through this whole process, so you need to find someone who you can trust. Interview a lot of agents and ask lots of questions to find out their past experience and the types of homes they specialize in.
  •          Look into your mortgage options and get preapproved for a loan – Unless you are able to pay for your first home in full, you will need to know your mortgage options. A mortgage is basically a loan that is backed up with some form of collateral. With the mortgage on your home, the bank will have the right to take your home if you aren’t able to make your payments. If you plan on keeping this home for 30 years or more, you may want to consider a 30-year , fixed-rate mortgage, but if you are just getting a starter home, then you may want a mortgage with an adjustable rate. From there, you need to choose a bank and find the best loan agreement for you.
  •          Understand the offer process – Once you find your home, you will need to know how to make an offer. Your real estate agent can help you learn this process, but you should also do some research of your own.
  •         Get a home inspection – This may be the most important step of them all. You don’t want to buy a house and move in only to find out that it is infested with termites. A home inspection will not only let you know of any potential pests, but it will also bring to light other possible problems with any home before you sign on the dotted line.
  •          Read before you sign – As with any contract, it is essential that you read through and understand every word before you sign anything. You may even want to consider hiring a lawyer to read through your contract to make sure you don’t get trapped in an agreement you don’t approve of.


Check out Amy's site at 
www.mastersininternationalbusiness.org

2/23/12

The Curse of Instant Gratification


Welcome to the generation of the Ys. We are from the generation where MTV told us that if there wasn’t change and excitement in every 2 minute clip to change the channel. We grew up watching TRL which was only 60 second clips of the best and most exciting part of a 3 minute music video (really? We coudn’t watch the whole thing?) We love bullet points (Quick and to the point right?) Don’t grab my attention in the first 30 seconds? Good luck keeping my focus. We read headlines only. If that. Don’t like your job? Quit. Fighting with boyfriend? Dump him. If we invest, we want money instantly. We want to lose weight, we want it now. We want fast and exciting or we are bored. Instant gratification. Attention span of a 5 year old.

I’ve probably already lost your attention.

When it comes to investments we have such a short focus – which is exactly opposite of the approach we need to take. If we put money in stock or a mutual fund, we expect to make money that year (You might say: “THAT YEAR!?!? It better be that week/month!”) but that is not the point. Long term focus. If you look at charts of the market, every fund fluctuates.  Leave it in there for 20 years and you will have plenty of money from it. It is that need of instant gratification that hurts our generation’s investing habits.

Another approach. If you put $150 into an IRA each month for the rest of your life you will be set for retirement.  Whoa. OR you can use that money to buy a new pair of heels. Did you hear me ONE new pair of heels. That may give you blisters or potentially go out of style (since you are so cutting edge) or you may simply step in the crack of a cobblestone sidewalk and break the heel. Someone is bound to spill something on it if you wear it out. 15 years from now you wont have those shoes. But 15 years from now you will have made interest on that IRA and have a more secure future.

Don’t quit on your investments if the market goes down (unless you are playing the stock market). Don’t refresh your mutual fund screen every day hoping to earn more money. PATIENCE. It is a virtue and one that is completely missing from our generation. Be savvier than that. Kick that curse of instant gratification in the face and set yourself up to be a rich girl down the road.



2/20/12

Watch Yourself


Time. Such a sensitive subject when you really think about it. “Time is limited” and “Time is money” and “Time flies”. Such a source of stress, anxiety, frustration, and arguments. How many times do I look back at when I was growing up and remember my Dad screaming at us to leave? Oh wait, that was over the holiday break too – some things really don’t change. (In our defense, my Dad thinks that 10 minutes early is on time…. Which means if he says to be ready to leave for dinner at 6, he really means 5:50. And if you are a teenage girl, those precious 10 minutes make all the difference in appearance… which is more valuable than time… but back on track). I think of the frustration my Dad faced and the aggravation it caused my mother and me. What wasted energy.

Basically, people view time differently.

It is interesting that people from different cultures view time differently. My experience is that Europeans view time as a relative term. 6:00 could mean 5:45 or it could mean 6:45. Why rush? What is the big rush?

Why are Americans so stressed and pressed for time? Are the Eurpoeans or eastern cultures less stressed and more content? Could our time pressure be what makes our culture so productive? (And also die of heart attacks and high blood pressure?)

You might be asking: What should a Savvy 20-something care about the large differences in time perspectives? Good question. (Maybe because technically I asked it of myself). When it boils down the importance of time, it is important to remember that there are people like my Dad out there. Infact, the real world seems to be full of them. What message does it send to a friend if I am 10 minutes late to dinner? It says “I don’t value your time, I think it is okay to make you waste your precious time waiting on me”. Same thing when you are meeting your boss – and in that situation? That could cost you your job.

I had to meet a manager for a meeting at 8am. This meeting was 30ish minutes from my house (and in the heart of rush hour). I also hate morning (mornings being before noon). But what did I do? I got myself out of bed extra early, so despite traffic, and despite hating mornings, I could be at work at 7:45 to prepare for the meeting. What message does it send to a superior (or a coworker) when you roll in at  8:15 instead? I don’t get “points” for coming early, but I am sure she was more willing to help me than if I came in late.

On the flip side, if you are meeting someone – and being the prompt person that you now will be – beat them to work/dinner/etc, have some patience. Know that sometimes life happens, and that their schedule might just not have let them get there on time. Their clock culture could be different.

To end: Just remember, always “Watch” yourself and be on time. (hey, good excuse to go shopping for a cute new watch right?)



2/16/12

Always Look Up


This was one of the best pieces of advice I was ever given. My friend Bailey told me when we were studying abroad to “Always Look Up”. She couldn’t have been more right. Literally the ceilings in Rome were the most detailed and beautiful thing I had ever seen. The colors, the paintings, the carvings. How many people go to a new place and spend more time watching their feet walk or staring at a map? Little did I know that this piece of advice can stretch much further than a “vacation”.

Running outside. We have all been there (okay, we haven’t ALL been there – but then really, you should try it sometime.) It is hot and you are dripping sweat, or it is cold and your throat is burning. Your side hurts. You can’t seem to have enough oxygen ever. Your left knee is feeling inflamed, or maybe it is the other one? Your legs hurt in general. So do your arms now that you think about it. How long have you been running? For three days? Oh no wait…. Only about 20 minutes. ---- Maybe that was dramatic, but not really. People tend to look down. Stare at their feet or the side walk (Okay, I am going to take only one step per sidewalk square until I’m home). STOP. Look up. Appreciate nature. Look at that neat architecturally awesome house. Or that puppy down the street. Looking up to appreciate the world is much better than staring at the ground (and well worth tripping on a random tree branch).

Career. As a fresh out of school 20-something it is pretty easy to be working in a job that isn’t exactly your dream job. Look up. Look at the position 5,10,15 years down the road. Is that a position you want? Could you see yourself there? (by the way, this is the difference between a job and a career I think). Is what you are doing now going to make a difference when you “look up”. Maybe this is the motivation you need to just work alittle harder. (Or the motivation you need to have a job change?)





2/14/12

Just the three of us: Me, my Honey, and my Money.


Yes, I know I am single. (No need to comment on the bottom of the post. I get it. And if I didn’t get it? Valentine’s Day always makes sure to remind us single people out there.)

In honor of the holiday I want to shed some light on a topic that has become near and dear to my heart. The psychology of couples and their money. Here is why: I have a ton of friends getting married (and many that are not accountants). The divorce rate is over 50% and rising. The majority of marriage end due to money related reasons. How many friends could I help if I simply encouraged them to talk the money talk before the wedding/baby talk? People simply have different views on money. (I honestly think that this may be finally what I decided I may want to do with my life – so feedback is much appreciated)

Happy Valentines Day – Feel free to take my mini-test with your honey. Ideally I would be curious to have each person take the quiz separately and then compare answers and discuss (although, maybe you should take it on the 15th?)
  1. How do you feel about joint checking accounts vs. separate checking accounts?
  2. Do you share credit cards?
  3.  If your honey spends $100 for a new pair of shoes, do you get the spend $100 for a new pair of shoes?
  4.  If your honey spends $1000 in car repairs, do you get the spend $1000?
  5. At what dollar value do you need to run your purchase through your spouse? $10? $100? $1000? $10,000?
  6.  How do you plan to save for retirement? Kids? A house?
  7. Do you think its important to pay for your kid’s college? Do you want them to go to private school?
  8.  Do you believe in investing conservatively with lower pay out? Or would you rather take a risk and invest with a chance of a higher payout?
  9. If you can’t have everything: Would you rather have an expensive house, clothes, car, or vacation?
  10. How do you manage and maintain a “fun fund” – is it fair for one person to go on vacation without the other? Do you keep track? How do you make sure the other person doesn’t hold a grudge?
Food for thought. And really? This food for thought has way less calories than that chocolate you intend to eat tonight.

(Oh yea, and please feel free to email me with comments/questions/ideas – or to let me know how the conversation went with the test. malloryspigel@gmail.com. I can also put out a fire if this post caused one- OR LEAVE A COMMENT - If you are brave)