Living In A Big City – Handy Financial Tips

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Living in a big city is not always easy. Sometimes the added pressures of gentrification, or general upmarket surroundings can take a pretty penny out of your wallet. If you’re struggling to cope with the added pressures to your wallet, we’re here to help you develop a much more competent attitude towards them, and potentially save yourself hundreds a month.

Even if you don’t find yourself in financial difficulty, these methods can help you become even more affluent. If you’ve recently failed to acquire the job or promotion you wanted, or have simply identified that you waste money recklessly, these tips can also help you offset, balance and grow your income more competently.

Consider Your Present & Future Home Living

Do you truly need to live where you do? While living in a central apartment might look beautiful and gift you a gorgeous vista, it might be surplus to your requirements. If you live alone, this might be doubly true. In big cities, pockets of property upkeep are found. Cutting your rent and living in a much more affordable place might not necessarily mean you have to cut down on a beautiful home. It might just mean convenience of travel is slightly less, adding ten minutes to your commute everyday.

For hundreds of dollars less a month, we’d say that’s worth it. Of course, you are entitled to live wherever you can legally occupy and afford. If you’re hoping to cut your city living costs down though, this can be the best place to start. Especially when consider gentrification often leads to a stronger buying hand when selling your property, specifically when using competent mortgage brokers to identify your next living space.

Transport

Do you really need a car? Many people in mid cities own cars for the status of it, even though transport solutions abound. Using Uber or Lyft for your general daily requirements can be much cheaper than a car, and give you much less of a yearly premium. City insurance can be very high, especially when considering your parking insurance.

More and more cities are asking for parking costs in built up areas, meaning that your car constantly drains your funding, even when not using its fuel. If you’re not particularly affluent, but live within a reasonable distance to your job, then selling your car could prove a decent injection of funding while lessening the monthly and yearly payment loads that trouble you.

The Best Things In Life Are Free

Of course, just because you live in a city doesn’t mean everything near you has a price tag. If you’re looking for entertainment, living in a place such as this is ripe with low-cost or free offerings. From street performers to public theatre shows to buskers, simply walking around your local environment can gift you a feeling of pure interest and entertainment. Just look around and search online, we can be sure that many classes, volunteering opportunities, promotional activities and more can be found to help you spend a weekend without having to worry about the cost. Sometimes, walking around your city and marvelling in the architectural complexity can be worthwhile in itself.

Teachable Moments: Moving House

As an adult, you’re probably well aware of all the hassle that moving house tends to entail. You know you’re going to spend months viewing properties, scanning over contracts, and juggling buying a new house with trying to sell your old one. It’s likely a situation you’ve been through at least once before, so you know what it’s going to involve.

Your kids, however? They probably have no idea. By the time they’re of an age to understand what’s happening, their first move is going to be an alarming time. They can only remember ever living in one particular place. What happens to move them to another house is a somewhat mystical process, most of which goes over their heads.

This isn’t necessarily the best choice. If your children are of an age to understand what’s happening, then it’s worth seeing moving as a teachable moment. Rather than the process being something your kids have to go along with, but don’t get much information on, it can be a time of learning. There’s so much you can teach them during this time, but perhaps the most useful things to extrapolate are…

#1 – The Basics Of Home Ownership

Teaching your children about the basics of home ownership is a necessary part of your job as a parent, anyway – but what better time to do it than in the midst of a move?

Explain how ownership works. If they’re of an age to understand the math involved, then you can also teach them what a mortgage is. Obviously, you don’t need to delve into hugely complicated legal and economic detail – but a basic overview should suffice.

#2 – The Process Of Moving House

There’s no need to hide what happens to facilitate a house move. The sooner your children are exposed to the way the housing market works, the more time they will have to understand it before it becomes relevant to them. Focus on the basics:

  • How to find homes for sale. While going to real estate agent’s shop windows is the established method, the truth is that your children will probably primarily search for their own properties in future via the online property market, so you’re going to need to cover this.
  • How you go about selling your house and how you choose a price for it.
  • The basics of the legal process of exchanging contracts.
  • How the escrow process works – obviously, only if this is applicable to the move you’re doing.

Most children should be able to grasp at least the basics of the above; you can add or subtract where necessary depending on your child’s age specifically.

#3 – Stress Management

It’s not just financial teachable moments during the house moving process, either. You can also teach about how to handle stress. We all know how tough moving house can be, so showing your children that you’re on top of all the stress – and managing to keep smiling – can be a great practical lesson. Making it a lesson will also force you to cope with the stress better, so both parent and kids will benefit!

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Revealed: The Financial Impact A Big Family Can Have On Your Home

Having a big family has a lot of pros and cons. The most obvious pro is that you’ve got a lovely large family with a lot of amazing children. It can be a lot of fun for everyone, particularly your children as they can all play with one another.

Unfortunately, a big family can be hard for your finances. Especially when we’re talking about the home you live in. The more people living in a home, the more negative the financial impact can be.

Below, we’ve got a few points that show you how a big family can impact your finances:

Revealed: The Financial Impact A Big Family Can Have On Your Home - family home image

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You Need A Big Home

If you’ve got four or more kids, it really narrows down your property search. You can no longer look at small family homes or apartments, you need something big and spacious. As a result, you’re probably looking at properties with multiple bedrooms at the higher end of the market. In turn, these cost loads of money, and you’ll probably have to get a large mortgage from a company like Enness Mortgages. You could potentially be paying double what someone with two kids pays for their home. If you want to live comfortably, you need a big home for your big family, so your hands are pretty much tied.

The alternative is to stay in your current home and try to increase its size through renovations. However, this still means you’ll be paying a lot of money. So, either way, your family is forced to spend a lot on your home when you have a big family.

Revealed: The Financial Impact A Big Family Can Have On Your Home - money rolls image

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You Have Higher Monthly Costs

When you have a house, you get the benefit of not paying rent. But, this doesn’t mean there are no monthly costs to pay. You’ve still go to pay all of your utility bills, and the size of your family greatly affects this.

When you’ve got a big family, you have more people using energy, more people using water, and more people using the internet/TV/phone. As a result, your bills can go through the roof. Imagine having four kids all in their rooms with their lights on watching TV? Or, think about the morning routine where your entire family uses loads of hot water as you wash. Every month, you will be paying a fortune for various utilities because of your large family.

At this point, it looks like it’s all doom and gloom for your big family. Naturally, some of you may be put off having lots of kids after this! But, don’t worry, there are steps you can take to contain things and ensure your finances don’t take that much of a hit. If you search for houses that are maybe in slightly cheaper neighborhoods, you can still get a big house without overpaying for it. A lot of the time, the further away from a major city you look, the cheaper the houses are. Also, teach your kids about saving energy and make sure they turn things off when they’re not using them. Also, get energy saving appliances to help as well.

There’s no denying a big family will have a huge financial impact on your home, but it’s just one of those things you have to be conscious of and learn how to deal with so it doesn’t damage you too much.

 

Ways to Save for a Mortgage Deposit

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Buying your first home is a big step, and if you want to avoid falling into the trap of forever renting, there are several things you can do which will speed up the saving process. Here is a quick guide to get out of rented accommodation and to saving for a house deposit.

Whether you are looking to buy a luxury Meriton apartment or a simple two-storey home, it is likely that you won’t be able to save much money if you are renting. If you feel that you can sacrifice your personal space so that you can save, there are a few options for you.

One option is to move back in with your parents for a little while. However, only do this if you get on well with your parents and live close to them. If moving in with them will add another hour or so to your work commute, it’s hardly worth it more the extra travel expenses. Talk to them about how much you will stay, what you will contribute towards rent and how you will help out around the house.

It is also possible to sub-let your spare room and get a lodger. This will help subsidize the cost of your home and allow you to gain control of your finances and save for a deposit. Before you start searching for a new flatmate to move in, you will need to talk to your current landlord and see if they are happy with what you are planning. They may agree to either of the following options:

  • Advertise commercially for a new housemate and reduce your rent
  • Allow you to advertise and sub-let the spare room in your rented accommodation

Either way, you will be saving money on your rent and able to put more away. Be strong, and remember that this extra cash isn’t supposed to be for extra fun and set up a direct debit to go straight into your savings.

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If neither of the above are options for you, it’s probably time for you to look for a cheaper place to live. Ask around and see if any of your friends have a spare room that they are willing to rent out for a few months – remember to talk to them about rent, bills and what you will do around the house before agreeing to anything. If you have no friends with a spare room, then there are loads of websites available which advertise rooms in shared houses, such as:

A house share will be much cheaper than renting a house or apartment all by yourself, as you will be splitting the cost of the house between several people. This should enable you the wiggle room to save more money and, eventually, put a deposit down for your own home!

It can be difficult moving into someone else’s space and living with them, especially if they are family or close friends and you are used to living alone. Remember that they are probably feeling the tension too, so do your best to help around the house and not make a mess!

Ending The Debate: Should Your Child Buy Or Rent?

Its one of the age old questions that plagues every generation: what’s better, renting a house or buying one? This is something that a lot of people have very strong views about depending on their own personal experiences. For many, buying a home is considered the Holy Grail, and if you are someone who likes to settle down, there are no prizes for guessing why this arrangement might work for you. But on the other hand, many renters now swear by their decisions to never fully own a home of their own, claiming flexibility as just one of many reasons why. So why the big debate in the first place? Well, it’s clear just by looking at the statistics that the price of both buying and renting has shot up enormously over the past few decades or so. A three bedroom property that would have cost you $30,000 in 1975 could now have a deposit of that very same amount – meaning the total asking price could be over $160,000. Renting also doesn’t come cheap, with landlords often racking up their prices in order to prey on people who need flexible accommodation at short notice. Plus, there are frequently hidden fees that come with rental properties, such as administration fees and the first month’s rent upfront. So, with both of those issues in mind, people are passionate about their buy vs. rent argument because there is simply a sheer amount of money involved; and no one wants to hear that they have done the wrong thing with their hard earned cash. If your children are of college age and potentially will be moving into a place of their own in the near future, you may want to sit down with them and have a chat about their options. Try and take yourself out of the equation, whatever your own personal preferences may be. Instead, inform your child of the pros and cons of each situation, and allow them to, therefore, make an educated decision of their own accord.

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Cost

We are typically all lead to believe that buying ultimately works out cheaper over time than renting. This is because despite the upfront deposit (usually around 20% of the asking price), mortgage payments have typically been lower over the years than monthly rental charges. However, all this does depend on how things are looking in the current economic climate. Both rental costs are mortgage rates are liable to fluctuate, so generally speaking, the overall cost of your property can largely depend on the timing. Take the time to explain to your child the importance of a deposit for a house and what is expected of them when they try and take out a mortgage. There are generally less checks performed on a prospective renter than there are performed on a prospective homeowner. If your child decides to go ahead and rent a property, you may need to act as their guarantor. This essentially means that you need to sign a document stating that if they account keep up with rental payments, you will be able to cover the cost and therefore bail them out. This isn’t an option for people buying a home, and if your child’s finances are not in order, they have only a slim chance of being offered a mortgage in the first place. Lenders will look at things like financial history and credit scores to guage whether or not your child will be a responsible homeowner. So, if your child is not in full time work or has a dodgy credit history, you may want to advise them to rent until these affairs are put in order. At the same time, some unexpected costs can also occur with rental properties, such as landlords and estate agents charging a fortune for things like ‘administration fees’ and asking for a large bulk of the rent upfront. Some questionable landlords can even try and frame their tenants for breaking parts of the house, so take photos of everything when you child moves into their rental property, and keep a detailed itinerary.

Independence

Whether your child chooses to rent or buy largely depends on their own personal situation. If they are somewhat of a free spirit and don’t plan on settling down anytime soon, renting could be the perfect option. After all, once you buy a house, you are tied to it, seeing as it is probably your largest financial asset. With a rental property, it is ultimately the responsibility of another, and you are merely passing through. Speak to your child about what it is they want out of their property. Do they want somewhere to feel truly like home, or are they literally just looking for a short term place to crash? More millennials than ever are being unable to buy due to the rise in deposit costs, and are therefore renting as a way to constantly move around the country and even the world. If your child has the travel bug, encourage them to find a house to rent in countries where the housing market is very different to back home. Scandinavian countries like Denmark and Eastern European countries such as Budapest are all famed for their positive attitudes to renting over buying – and as a result, rental properties are cheap and in abundance. Your child may plan on moving around frequently, in which case it makes sense to look for rentals that can be issued on a month by month basis. But on the other hand, your child may be a bit of a homebody, or perhaps they have met someone and they want to purchase a house and get married. In this instance, make sure they are 100% happy with their choice of location – you can’t just up sticks and leave when you are tied to such an expensive asset, so it needs to be somewhere they are confident in.

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Flexibility and potential consequences

It has already been mentioned that your child is unlikely to be approved for a mortgage loan if their financial history is unreliable or somewhat colorful. But even the most financially secure people can come into problems occasionally. If your child does stumble across some issues and gets into financial jeopardy, losing the house they bought can end up being a very scary reality for them. In the event of a first missed payment, first see if your child is eligible for any support from the government, such as if they are on a very low income. All in all, however, repeated missed payments can lead to one thing and one thing only: repossession. Personal items can first be repossessed before the home in its entirely is taken too, and your child and whoever lives with them are evicted. This can be devastating on a very personal level and can make it extremely difficult for them to ever get another mortgage in the future. That is why if you are in any doubt over your child’s ability to keep up with payments, lower your price threshold for their property or just rent until they are more secure. A good idea before you start making any offers is to use a mortgage calculator tool to measure, along with your child, whether or not they would be able to comfortably afford a home of their own. However, renting is not completely free from negative consequences either. Despite the fact that a rental tenant’s responsibilities are generally lower than that of a homeowner, you do still have an obligation to take care of the property while you are in it. This means respecting the landlord’s rules and wishes. For example, your child’s landlord may explicitly state that they are not comfortable with pets in the house, so advise them not to break said rule, as it could spark off an eviction. As far as decorating goes, some landlord are flexible – but it is still always better to check with them first before your child starts hammering nails into the walls and putting down a new carpet! Plus, you do always run the risk of coming across a landlord who takes advantage of your child. Many younger people are reporting horror stories of staying in dirty, unsanitary apartments at the hands of rogue landlords. Just as there are certain rules for tenants to abide by, landlords also have to adhere to a set of standards. If something goes wrong in your child’s rental property – the boiler breaks, or a window cracks, for example – it is your landlord’s responsibility to deal with the issue and to foot the bill for it, too. With all these conflicting pieces of information it can sometimes seem difficult to decide whether renting or buying is best for your child, but it is important to judge each case on its merits. With your child, decide what is truly important to them: having somewhere to call home and something that will act as an investment, or having the freedom to move as and when they please.