Bridge Financing: What You Need to Know

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How I Achieved Financial Independence By Age 40

Learning how to achieve financial independence and retire early (FIRE) is pretty simple in theory. I’ve covered some key technical concepts is past articles. These include the math behind building wealth quickly and simple tax planning strategies common in the FIRE community.

While the concepts are simple in theory, they are not always easy in practice. I’ve studied early retirees and discovered key strategies and patterns of behavior that separate them from those living a more conventional lifestyle. Continuing that theme, I have identified three actions that have been key in allowing for my own early retirement. Oh, and I’m only 41 years old.

I Wrote My Own Story

“The story you tell yourself becomes your reality” — Chad Kellogg, American alpinist

It is documented that you are more likely to obtain goals when you write them down. I propose you go one step further and write your own story.

In my case, I observed the happiest and most passionate people I knew were my “ski bum” or “dirtbag” climbing friends. However, most were living a life of financial risk with little security.

I also observed many on the other side of the spectrum: professional people who had money and prestige. However, they were trading away most of their time working while they still had the health, energy, and vitality to pursue their passions. At the end of the day, few seemed genuinely happy or fulfilled.

The common narrative is that you must choose between a false dichotomy of life focused on career and money or a life focused on things like passion, fulfillment, and family. I wasn’t happy with this choice, though. I wrote a simple essay about having the best of both worlds, which I titled “Dirtbag Millionaires.” Then, I started figuring out how to piece that life together for myself.

Who Writes Your Story?

This may all sound cliché, even a little cheesy. However, if we think about it, someone is writing each of our stories. It’s just a matter of who that someone is.

• Do most people carry debt in the form of a car payment because it is a great financial decision, or even because cars bring us true happiness? Or do people make this decision because advertisers and car salesmen are writing their stories for them?
• Are our ever-bigger homes, and the 30-year mortgages needed to pay for them, really the American dream? Or, are realtors and mortgage companies writing most people’s stories?
• Do most people retire in their 60s or 70s simply because it is best to spend their younger years working? Or are government policies, conventional financial advice, and social expectation writing people’s stories?

It is important to realize we all have the ability to create our own narrative. And if you want to retire early, writing this story is mandatory.

I Defined Success Carefully

“…you should have a running list of three people that you’re always watching: someone senior to you that you want to emulate, a peer who you think is better at the job than you are and who you respect, and someone subordinate who’s doing the job you did…better than you did it.” –Chris Fussell, former US Navy SEAL officer

I recently came across the above quote in Tim Ferriss’ new book, Tools of Titans. It came in response to the question, “How do you define success?” Personally, I think this is excellent advice for those looking to do something extraordinary with their lives. Nearly everyone follows the same path: birth, school, work, retire, die. For those of us on a different path, though, it can be challenging to gauge how we are really doing. Having, and watching, these three people in our life gives us a yardstick against which we can compare our progress.

My wife and I worked with a conventional financial advisor for about a decade. He repeatedly told us how well we were doing. Compared to our peers leading a conventional lifestyle, he was right. However, following conventional financial advice meant massive investing and tax planning mistakes. This cost us over $20,000 in excessive fees, unnecessary taxes, and opportunity costs in just our last year of using his services.

Taking Control of Our Wealth

About five years ago, I’d had enough and took control of my finances. I began reading early retirement blogs like Early Retirement Extreme. Soon after, I moved to Mr. Money Mustache and The Mad Fientist. While each of these blogs was very enlightening and technically helpful, I found that their focus on the fastest and most efficient path to retirement was not consistent with my values.

Related: How to Build Wealth Quickly So You Can Retire Early

I became overly focused on money and retirement. Despite already having a very high savings rate, I began watching every penny we spent. I became excessively focused on regretting past financial mistakes and wanting a future of freedom from work.

For the first time in my life, money became a stressor. While my knowledge and wealth grew, I became less happy.

I needed better benchmarks to compare myself against… a way to define our success. So, I began to search for others whose attitudes and values better lined up with my own.

I Found My Peers

I continued reading early retirement blogs to find others who had already done what I wanted to do. Two that I found extremely helpful were Todd Tresidder at Financial Mentor and Darrow Kirkpatrick at Can I Retire Yet? They demonstrated a more sustainable path to FIRE and were living lives consistent with what I desired in my own retirement.

I then began connecting with peers who had comparable stories and were at similar places on their journey. This included the bloggers behind Our Next Life, who are on our same timeline to retirement and share our passion for the outdoors. I became friends with Chad Carson, who has taken a very different path to FIRE as a real estate investor, but has very similar values, interests, and family situation to my own.

Learn More: How to Make Money Blogging

I also connected with the bloggers behind Slowly Sipping Coffee after reading their description of a “fully funded lifestyle change,” which was more in line with our values than a traditional retirement. More recently, my wife and I joined a mastermind group of similar couples. Having peers on a similar journey has been very helpful. We are able to share the triumphs and discuss the challenges of this unusual lifestyle.

Finally, I began connecting with those behind me in their journey to FI. This includes Jared Casazza, who writes the blog Fifth Wheel Physical Therapist about his journey from 6 figure debt to FI in 5 years. It also led me to connect with a Dough Roller reader/listener Andrew, who I have been coaching for the past few months.

Helping those behind me has forced me to develop a deeper understanding of our own ideas, theories, and processes. Learning their stories has made me appreciative of how far we have come on our own journey.

I Redefined Retirement

“…the old story was freedom from: freedom from work, freedom from having to get up in the morning, freedom from lots of things. The new story is freedom to.” –Richard Leider, Author of “Life Reimagined”

Many people think early retirement is difficult, if not impossible. They think it is too hard to save enough money to support them indefinitely. Following the 4% rule seems like it would be stressful. They do not know how they would ever pay for health insurance. They think they would get bored.

I agree partially (or fully) with all of the above sentiments if retirement is defined in a traditional sense. Worse yet, retirement often deviates from the happy, carefree time so many imagine. In fact, retirement is associated with an increased risk of anxiety and depression! This didn’t sound like anything I wanted for myself, so I simply redefined retirement.

I stopped worrying about trying to save every penny, with the idea that retirement meant never again making money. I have accepted that the future is always uncertain, so I focused on building a substantial nest egg while also building great flexibility into my plan. This allowed me to reach a point where earning money will never again be the central focus of my life. Going forward, my life may, at times, look very different. It may look like that of a part-time or seasonal worker, stay-at-home dad, entrepreneur, ski bum, freelancer, student, teacher… or any combination of the above.

Related: Is the RAM Better Than the 4% Rule?

Building the Life I Want

Seth Godin has a great quote: “Instead of wondering when your next vacation is, maybe you ought to set up a life you don’t need to escape from.” I chose to apply this idea to retirement planning.

Not needing to make money will give me freedom with my time. Building in a plan to also do some paid work will give me the opportunity to live a lifestyle of abundance, rather than one focused around a strict budget. It will also allow me to continue to build social connections and live a purpose driven life.

There are probably some of you who would criticize this plan as “not really retired.” However, this definition of retirement is in alignment with the principles of the “Life Reimagined” program, developed by AARP to address the many challenges and downsides of traditional retirement.

Taking Your Own Action

When I started getting serious about early retirement, I became obsessed with the technical how-tos. I needed to plan out where my financial threshold was — how much did I need to save now, in order for this flexible plan to really work? While I don’t have every step planned out and I don’t know exactly what my retirement will look like down the road, I know that I am happy with the freedom and flexibility it provides me. It’s important to realize just how possible it is for you to achieve a similar outcome, too.

Write your own story; develop systems to measure your progress, and define what you want for your life. You may be amazed by where you find yourself in just a few short years.

Topics: Personal Finance

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24 Resources for Anyone Considering Bankruptcy

Bankruptcy is never a comfortable topic, particularly if you’re the one considering filing for bankruptcy. When the debts are piling up, and you can’t see a light at the end of the tunnel, bankruptcy can be a viable option.

The key is to thoroughly understand the bankruptcy process. This includes knowing which debts you can and cannot take care of through bankruptcy, and what your life after bankruptcy will look like. There can be a lot of confusion. That’s why it’s important to make sure that you learn as much as you can before moving forward.

We have found 24 stellar resources from around the internet, to use as research in your bankruptcy consideration. These will help you learn more about bankruptcy, explore your options, and ultimately make the best choice for your financial circumstances.

Bankruptcy Basics

1. Should You Declare Bankruptcy? – This Forbes.com article was published back in 2009, but it’s still a great resource for anyone facing bankruptcy. Its story-based format helps you contextualize your own financial decision, making it a good starting off point.

2. Types of Bankruptcy – This NOLO article outlines the different types of bankruptcy.

3. Bankruptcy Basics (From USCourts.gov) – This section of the U.S. Courts website offers more detailed descriptions of the different types of bankruptcy. (Just be prepared for some legalese!)

4. How 5 Financial Blunders Will Affect Your Credit Score – This Dough Roller article outlines how bankruptcy might affect your credit score.

5. Bankruptcy Filing Fees – A list of bankruptcy filing fees for Chapters 7, 9, 11, 12, 13 and 15 bankruptcy.

6. Misc. Bankruptcy Court Fees – A list of miscellaneous bankruptcy fees that may or may not apply to your situation.

7. Bankruptcy Forms – Use these forms to see the content and format of bankruptcy forms, if you want to know what’s involved in the paperwork.

8. Things You Need to Know About Bankruptcy – This article from Money Management International covers some of the most frequently asked questions about bankruptcy.

9. Bankruptcy Facts for Older Consumers – Bankruptcy can be a little different for older consumers who may be nearing retirement age. This fact sheet from the National Consumer Law Center lays out your options.

10. 12 Myths About Bankruptcy – Think your bankruptcy will mean losing everything you have, or that both spouses in a marriage will have to file? Think again. This article busts 12 common bankruptcy myths.

11. What Not to Do Before Bankruptcy – This NOLO article gives tips on things that will negatively affect your bankruptcy process, like racking up even more debt or trying to hide assets.

12. Keeping Your Auto: Car Loans in Bankruptcy – Worried about what will happen to your car during bankruptcy? Find out what might happen here.

Other Options for Getting Out of Debt

13. National Foundation for Credit Counseling – This credit counseling organization has community offices in every state. Start here if your goal is to avoid bankruptcy.

14. Debt Relief or Bankruptcy? – This page from the Federal Trade Commission helps you decide whether debt relief is a better option than bankruptcy. This section can also help you find trustworthy credit counseling if necessary.

15. 6 Reasons We Chose NOT to Use Debt Settlement, Debt Consolidation or Bankruptcy to Pay Off Our Debt – This Man vs. Debt post outlines one family’s choice to pay down debt directly, rather than filing bankruptcy (or using debt settlement or consolidation).

16. 7 Tips for Settling a Debt on Your Own – Settling some of your debts can help make your payments more manageable, and may help you avoid bankruptcy. But you probably don’t need expensive for-profit debt settlement services to get it done. Check out our article on how to settle a debt on your own here.

17. Settling Credit Card Debt – This FTC article talks about the pros and cons of settling credit card debt, and gives some options for different ways to get it done.

18. How to Refinance Any Debt – Refinancing or consolidating your debts can make sense if you’re struggling with high payments. Refinancing also won’t harm your credit as much as debt settlement or filing for bankruptcy. This Dough Roller article helps you learn to refinance any type of debt.

Related: How to Get Out of Debt… and Fast!

Qualifying for Bankruptcy

19. Chapter 7 – Bankruptcy Basics – This article from USCourts.gov covers lots of information about Chapter 7 Bankruptcy, but you’ll find a detailed eligibility section here, which can help you figure out if you qualify for this type of bankruptcy.

20. Are You Eligible for Chapter 13 Bankruptcy? – An article from NOLO explaining who is and is not eligible for Chapter 13 bankruptcy.

21. Means Test Information – This page from the U.S. Justice Department lets you look up the latest means testing information for bankruptcy filings.

22. Free Means Test Calculator – This bankruptcy means test calculator isn’t an official form, but it can help you find out if you’d qualify for bankruptcy based on your current financial situation.

Life After Bankruptcy

23. Ask Experian: Bankruptcy – This page lists several “Ask Experian” questions related to bankruptcy. The focus here is on how bankruptcy affects your credit.

24. How to Establish Credit After Bankruptcy – This Dough Roller article outlines how to rebuilt your credit after you’ve filed for bankruptcy.

Topics: Credit

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ULA Backpacks: How to Choose

How to Create a Bare Bones Budget

Have you ever been in a financial situation where you had just enough money to squeak by every month? I have! Maybe you’re on maternity leave and dealing with a significant pay cut for a few months. Or maybe you’re dealing with a spouse’s job loss, or have lost some of your own freelance or self-employment income.

Whatever the reason, when you find yourself with no money left at the end of the month, it’s time to trim back to a bare bones budget.

Even if you’re not currently in a bare bones budget sort of situation, you may want to go ahead and write out what your essential budget would look like right now. If you lost your job, how much money would you have to pay each month to keep the lights on and food on the table?

Why do you want to know this figure even if you’re ripe with extra cash at the moment? For one thing, it helps you set your emergency fund target. Too often, people think an emergency fund should be three to six months’ worth of net income.

Actually, though, in a true emergency, you’d likely be able to cut back your expenses–sometimes dramatically. So you really want to set your emergency fund goal, at first, for three to six months’ worth of essential expenses.

Unless you’re currently only paying out expenses that are absolutely essential, you’ll need to know what your bare bones budget would be. Here’s how you figure that out:

 

Start with the “four walls”

 

Here at Dough Roller, we’re not necessarily on board with everything Dave Ramsey preaches, but his “four walls” concept for budgets is pretty solid. Basically, the four walls are the things you absolutely must pay for to keep on living. As Dave Ramsey lists them, the four walls are food, shelter, basic clothing, and basic transportation.

Here’s the thing: your budget for your four walls may look different from my own. So you need to really think about how it would look to strip these essentials back to their minimums in your particular situation. Let’s do a quick case study of the four walls for my own family.

For my family, the four walls would include: groceries, a mortgage payment, utilities payments, one vehicle’s gas and expenses, a monthly bus pass, essential medical expenses, and basic clothing for myself, my husband, and our two kids. Dave Ramsey’s four walls don’t explicitly mention medical expenses, but we do have certain medications that must be filled on a monthly basis.

Those expenses would look something like this:

• Groceries: $400/month
• Mortgage (including property taxes and insurance): $730/month
• Utilities: $150/month (average)
• Car Maintenance, Insurance, and Registration: $150/month
• Gas: $100/month
• Bus Pass: $30/month
• Basic Clothing: $50/month
• Medical Expenses: $50/month

Total: $1,660

Our current budget actually doesn’t look much like this at all. We spend a bit more on convenience foods, but we could cut back if we had to. Our mortgage would stay the same, but we could be a little less comfortable to save on utilities. (AKA. My husband really likes his A/C!)

We currently have two cars, one with a monthly payment. But if the worst happened, we could sell that vehicle and use our paid-off vehicle for my husband, who absolutely must have a vehicle for work. I could take the bus to and from work if I needed to. And our clothing doesn’t have to be very expensive, as my husband and I have fairly casual workplaces, and we buy most of our kids’ clothes secondhand, anyway.

Your four walls might come in much higher or lower than ours, depending on your situation. For instance, maybe you live in an area where walking or busing everywhere is possible. So if you lost your job tomorrow, you could sell your vehicle and get by without it. Or maybe you must have two vehicles to get both spouses to and from work.

Or maybe you work in a highly formal environment that requires you to have dry-clean only suits for work. If dressing this way is essential, budget for more expensive clothes and the costs that come with caring for them.

The key here is to think carefully about what you would have to pay in this situation, if you were cutting your budget as much as possible.

 

Add in additional essentials

 

The four walls are a good starting place and should make up the bulk of your bare bones budget, but you should also consider other close-to-essential expense you may want to add into your budget. This might include some of the following items, depending on your circumstances:

• Phone or cell phone service
• Internet service (especially if you work remotely)
• Coffee shops (if you rely on them for internet access rather than paying for home internet)
• Home maintenance
• Medical insurance
• Additional insurance policies (such as life insurance)
• Professional association fees
• Daycare
• School tuition
• Haircuts
• Toiletries
• Pet care items
• Cleaning supplies

Many of these expenses could be cut out, if not forever, at least for a long time. But some are pretty close to essential.

For our family, I’d count phone service, internet service, home maintenance, life insurance, daycare, pet items, toiletries, and health insurance among our essentials. Daycare is the largest of those expenses, but we can’t be a two-income family without daycare. If one of us lost a job, we’d want to maintain our spots at our local daycare, or risk being unable to find daycare when we found a job again. Here’s what these expenses would looked like stripped down and counted monthly:

• Phone Service: $50/month (if we switched to a lower-cost provider)
• Internet Service: $50/month
• Home Maintenance: $50/month for basic upkeep
• Life Insurance: $55/month (we wouldn’t want to lose this coverage!)
• Daycare: $800/month (and that’s cheap!)
• Pet Items: $30/month
• Toiletries: $20/month
• Health Insurance: $250/month

Total: $1,305

Health insurance is an iffy expense to include here, I think. It depends on why you’re calculating your bare bones budget. If you want to cut back to this budget for the purposes of knocking out debt, then count your current health insurance costs into the equation. But if you’re looking at what would happen if you lost your job, consider how your job loss would possibly make available options like government-subsidized insurance.

Again, your next-to-essential expenses probably look different from mine, depending on your situation. The key is to think clearly about how much you would really need for expenses like these, should you need to cut your budget to the bone.

 

Steer clear of bankruptcy if you can

 

What about debt payments? Well, if you’re calculating your bare bones budget for purposes of setting an emergency fund goal, you should include your minimum debt payments.

But what if the point of this exercise is to cut your budget back so that you can get out of debt? In this case, you might look at your budget like this: First, pay essential expenses, and then put everything else towards debt. In this case, your minimum debt payments (other than those like your mortgage that are part of your four walls) don’t really need to factor in. You’ll just put whatever is left each month towards debt.

For me, long-term debts like my and my husband’s student loans would be part of our bare bones budget. Even if we lost a job tomorrow, we’d do everything possible to pay these debts in order to avoid negative credit consequences. For you, minimum credit card or personal loan payments might factor in, as well.

So, if I’m going to add in minimum student loan payments based on our current repayment plans, that’s $215 per month.

 

Add it all together

 

So, if you want to know what your bare bones budget consists of, add these three figures together. For my family, the total comes to $3,180. And, again, some of the expenses I’ve included, such as toiletries and even debt payments, could be stripped or stretched for at least a short period of time.

With that figure, I could say that the first $3,180 of our income each month goes towards essential expenses, and whatever is leftover can go towards debt. Or I could calculate my emergency fund savings goal–somewhere between $9,540 and $19,080 for the standard three to six months’ worth of expenses.

How to Use this Budget

So how can you actually use this budget in your everyday life? You’ve got a couple of options:

 

• Stick to it. To actually stick to this type of stripped-down budget (which I wouldn’t recommend doing for longer than you really need to!), consider doing a cash budget. Pay your essential monthly expenses up front, and then use cash for variable expenses like gas and groceries. Or use a budget tracking tool to make sure you stay within range on all of these line-item expenses.

 

 

• Guide by it. What if you just want to use your bare bones budget as a guide, to make sure your spending doesn’t get too out of control in any one area? In this case, write down what you could live on each month, and then start tracking what you do live on.

 

For instance, say that you know you could feed your family for $300 per month, but you actually spend $600. It might be time to look at ways to cut back on grocery spending!

Or say you could get by without a vehicle if you had to, but your car expenses total to $1,000 per month. Is it really worth continuing to pay that much for your car payment, maintenance, gas and more? Or could you find a way to moderate that expense?

Dave Ramsey says that you should live on a bare bones budget while you’re getting out of debt. Sometimes this is appropriate, especially if you can pay off a big amount of debt in just three or four months. But sustaining this type of tight budget over the long haul is extremely difficult to do. Plus, it might defeat the purpose. The goal of managing your money is to give yourself more options and to enjoy life more, not to live like a miser who never enjoys anything!

Writing down your bare bones budget is a good exercise, though you might not want to actually live on this budget unless you must. But it does give you a place to start when determining your monthly expenses and more.

Topics: Budget

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Recreation Student Staff Award Winners (click to see the video!)

8 Ways to Pay Off Your Mortgage Early

The decision to pay off your mortgage early is a controversial one. But for some who have tackled many of their big financial goals and erased other debt, putting their home mortgage in their crosshairs can make sense.

Since your mortgage is such a large, long-term debt, it can be surprisingly easy to pay it off at least a little early. You might get out of a year’s worth of payments (or more) simply by throwing a bit extra towards your principal each month.

Some of these options will have you paying off your mortgage a decade or more early. Others will cut just a few months or years off of the debt. Either way, any of these options could save you money in the end and help you reach financial freedom faster. If your budget allows, consider using a combination of these approaches to really hit that debt hard.

1. Refinance to a 15-year mortgage

An easy way to guarantee that you’ll pay off your house twice as fast is to refinance your mortgage from a standard 30-year term to a 15-year mortgage.

If you refinance to a 15-year mortgage, you’ll typically pay a lower interest rate while making larger payments each month. But here’s the thing: since your term is so much shorter and the interest rate is likely much lower, you won’t pay anywhere near double your current mortgage payment.

Refinancing to a 15-year mortgage could save you hundreds of thousands of dollars in interest over the life of your loan, besides getting rid of mortgage payments much sooner. You’ll have to check out current estimated mortgage rates to see just how much this refinancing process could save you.

Related: How to Refinance ANY Debt

What’s the downside of this option? You get locked into a higher monthly payment, which gives you less flexibility in your budget. With a 30-year mortgage, you have lower payments, but you could always pay extra to get out of the loan sooner.

When you refinance to a 15-year mortgage, you’ll get stuck in the higher payment. Plus, you’ll have to deal with the actual costs of refinancing. Then, if your income fluctuates for any reason, you may struggle to deal with the higher mortgage payment.

For this reason, you should definitely take time to consider whether or not refinancing to a 15-year mortgage is the best option for your needs. If you have plenty of room in your budget to cover the increased payments, it might be. But if you’re currently working on other competing financial goals, refinancing may not be your best bet.

2. Refinance, but keep the same payments

Many who refinance do so to reduce their monthly payments. But if you refinance, you can double up by reducing your interest rate and continuing to make the same monthly payment.

This has the same result as making extra payments each month on your current mortgage, but gives you a lower required payment. That means you have more budget flexibility, and can pay more towards your mortgage principal each month without ever increasing your payment.

Just how powerful this option could be depends largely on your current interest rate and your new interest rate. But here’s an example (using this calculator), just so you can see how it might work:

• Original loan amount: $200,000
• Original loan terms: 30 years, 5.5% interest
• Origination date: January 2015
• Original monthly payment: $1,136/month
• Current balance: $193,476
• New loan terms: 30 years, 3.82%
• New payment: $904/month

Let’s say you roll your refinancing costs — $3,600 — into the new loan. That brings your new balance to $197,000, give or take a few. Plug that balance, your 3.82% interest rate, and your 30-year term into this calculator. Then, add in the extra $200 you’ll add to every mortgage payment, bringing your total payment back up to what you’re already used to paying.

At this rate, you’ll pay off your loan in 259 months (about 21.5 years) and you’ll save over $42,000 in interest.

Not bad for continuing to make the same mortgage payment, huh?

Learn More: Retiring Early? Why You Should Pay Off Your Mortgage First

3. Use pay raises on your mortgage

One way to find extra cash to put toward your mortgage: apply raises and bonuses from your job.

The goal is to put the same percentage of your income toward your mortgage, even when your pay goes up. In other words, if you’re currently putting 15% of your income towards your mortgage payment, 15% of each annual raise amount should also go towards your mortgage, in addition to what you’re already paying. If you’re already leading a comfortable lifestyle and can avoid lifestyle inflation that often follows a raise, you can put your whole raise amount towards your mortgage balance.

This strategy works best for those who get regular raises over and above minor cost of living adjustments. If you aren’t expecting to see your income increase anytime soon, this strategy might not be the best option to start with.

4. Pay extra each month

Fifty bucks might not be much in your budget, but consistently adding this much to your mortgage payment can make a big difference.

What if you have that same $200,000 mortgage at 5.5% interest? Maybe you decide not to refinance (though you should at least consider it if you qualify for today’s best mortgage rates!), but instead just put extra money towards your mortgage each month.

Add only $50 per month to your mortgage payment, and you’ll pay it off in just over 27 years, saving about $24,162 in interest. That’s a pretty big difference, for less than the cost of a nice dinner on the town each month!

The biggest problem with this approach, though, is that it requires willpower. To reap those benefits, you have to voluntarily put an extra $50 towards your mortgage payment every month.

Related: 8 Strategies for Stressing Less About Retirement

5. Use cash windfalls to pay lump sums

Instead of paying a little extra each month, you could pay a large lump sum here and there. This can be done with a cash windfall, such as from a yearly tax refund, work bonus, or inheritance.

Just how big of a difference a windfall can make depends on its size. But the good thing about these payments is that you can apply them directly towards the principal of your loan. So if you put $3,000 towards your mortgage’s principal in April when you get your tax check, all of your payments from there on out are a little more effective, because less of them is going towards interest.

6. Make biweekly payments

If you opt to make biweekly payments on your mortgage, you’ll make an extra mortgage payment every year. Making 26 payments a year with our example cuts almost five years off a typical 30-year mortgage.

There are a couple of ways to do this. You can manually log in to make 1/2 your mortgage payment every two weeks. This is great if it aligns with when you get paid! Or you can use a free bill pay service to set up automatic payments for this purpose.

If you’d rather stick to making your payments monthly, just add 1/12 of a monthly payment to each payment, and you’ll reap the same benefits of biweekly payments.

Learn More: Cut Expenses Now

7. Set a target payoff date

Setting a target payoff date allows you to know exactly how much extra to pay each month to be mortgage-free by a certain date. You’ll have the added motivation of marking your calendar to plan the celebration.

This calculator is a good one for helping you do the math here. Let’s say you want to pay off that $200,000 mortgage in 18 years when your child goes to college. You’ll need to put an extra $325 towards your payment each month.

What if you want to pay off your mortgage in 10 years? You can not-quite-double your payments to $1,035 to achieve this goal.

8. Combine methods

There’s no need to select only one method from this list. Many mortgage holders can choose a few options on this list and combine them to pay off their loan even earlier. Let’s say you apply an extra $200 each month as well as your $3,000 tax refund every April — you’ll see double the benefits, and pay off your mortgage even faster. In the personal finance world, every penny saved is a penny earned… so, go save yourself some interest and pay off that mortgage early!

Are you paying off your mortgage early? Let us know in the comments what your strategy is.

Listen to our podcast on the pros and cons of paying off a mortgage early:

Topics: Mortgages

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The Logic of the Landscape: How to Become an Expert Navigator

Everything You Need to Know About VA Home Loans

Home buying is an important milestone in many people’s lives. For service members who move up to a dozen (or more!) times during a career, it can be a daunting task. Fortunately, the U.S. Department of Veterans Affairs (VA) has an amazing set of home loan benefits for eligible service members.

I set out to learn the basics, benefits, savings, and limitations of the VA home loan program, which makes owning a home easier for military families and their unique challenges. Let’s discuss the law as well as loan limits, funding costs, and basic options for homeowners seeking to use the VA loan. We can also look at a sample cost savings calculation for a conventional versus a VA loan, when buying a home without a down payment.

The Law

Here are the actual rules on VA loans, and what they means for you.

Eligibility

There are three basic requirements to become eligible for a VA home loan:

1. You need to have served or be on active duty in the Armed Forces of the United States. Widows of fallen service members are also eligible under certain conditions. Reservists and National Guard members who meet the prerequisites qualify for the VA home loan. The basic time limits for qualification are 90 consecutive days of active service during wartime, 181 days of active service during peacetime, or six or more years of service in the Reserve or National Guard.

Image courtesy of benefits.va.gov

2. You need to have available entitlement, which means you do not own a home financed with an active VA loan or you have not used your one-time exception (more on that later).
3. You need a certificate of eligibility. This is proof that you are eligible for a VA-sponsored loan. Today, lenders have electronic access to the VA system that automatically produces this certificate for the borrower.

Entitlement

Those qualified for a VA loan have a basic entitlement of $36,000. If your prospective VA loan is larger than $144,000 – four times the basic entitlement – lenders may want a down payment on your home.

However, they usually do not. It depends on your credit history, the property appraisal versus the asking price, and your income level.

Loan Limits

Before sitting down to write about VA Home loans, I thought the loan limit for a VA Home purchase was a flat number ($450,000) that did not change. Turns out I was wrong, and where you buy matters.

If you want to buy in Honolulu, Hawaii using a VA Loan, then the maximum allowable loan amount is $721,050. If you want to buy in Nashville, TN, the limit is $466,900. However, for over 90% of the country, the loan limit will be exactly $424,100 (for 2017). The VA guarantees the loan for the lender up to 25% of the county specific limit. In the Hawaii and Nashville example, the VA guarantees $180,250 and $116,725, respectively.

Related: US Conforming Loan Limits Rise for First Time Since 2006

You can click here to access an interactive map that illustrates VA Home loan limits in each county in the United States. You will see a connection where locations with higher costs of living have a higher upper limit for the VA home loan.

All of this means that, in most cases, lenders will not demand a down payment on loans at or below the county limit for buyers with full entitlement ($36,000) and good credit.

Jumbo VA Loans

VA Loans that exceed the county limit are considered jumbo loans. Yes, you can buy a home for more than the limit, but you will automatically have to give a down payment. The amount of the down payment will be 25% of the difference between the county limit and the loan amount.

Learn More: Where Should You Put Your Down Payment When Saving for a Home?

Let’s see an example:

1. 1. • Assume that you’d like to buy a home in a county with the standard $424,100 limit.
      • Let’s say that you choose a home which costs $474,100. This means you will have an excess of $50,000 over the loan limit.
      • You will be asked to put down 25% of that overage, which comes out to $12,500.
      • You will also pay any closing costs tied to the jumbo loan.

The Easier Way: Down Payment Calculator

Given the above rules and reading the entitlement explanation on the VA home loan website, you may not be sure as to whether you would need to make a down payment on your particular VA loan. Well, this down payment calculator helped me personally figure out exactly how much house I had to buy before a down payment was required.

Once again, breaking the county-specific limit means the borrower will start to meet a down payment requirement. I entered the city and state where I was looking to buy into the calculator above, finding that the area had a loan limit of the baseline: $424,100. If I wanted a home for $425,000 in that county, I would need around $225 for my down payment.

No PMI

One of the greatest features of the VA home loan is being exempt from paying private mortgage insurance (PMI). The lender allows this because the VA is guaranteeing the loan. I will illustrate the cost savings of not paying PMI and making a zero-money-down purchase later in the article.

The Basic Options

VA Home loans can take on five forms:

1. 1. • The Purchase Loan is the most popular VA loan. This loan helps homebuyers get a competitive interest rate that they may not have qualified for elsewhere.
      • The Cash-Out Refinance Loan is a VA guaranteed loan of “up to 100% of the value of your home.” Homeowners can use the VA cash-out refinance loan to pay for school, fund home improvement projects, or cut other financial liabilities.
      • The Interest Rate Reduction Refinance Loan (IRRL) is a standard refinancing of your current VA loan. This is also known as the Streamline Refinance Loan.
      • Adapted Housing Grants help Veterans with service connected disabilities to purchase, build, or change a home to meet their access and mobility needs.
      • The Native American Direct Loan (NADL) Program gives Native American Veterans the same benefits as a regular Purchase Loan and the ability to buy, build, or improve homes on Federal Trust Land.

Funding Fee

The funding fee is a unique feature of VA home loans. The purpose of the funding fee is to offset the taxpayer burden for covering the costs associated with VA loans. The fee varies by how much you borrow and increases for second time users of the VA loan.

You can finance the funding fee into the loan or pay it in cash. Additionally, you are exempt from funding fees if you are a disabled veteran or a surviving spouse of a fallen service member.

Type of Loan	Down Payment	Percentage (1st Use)	Percentage (2nd Use)
Purchase Loan	None 5% 10%	2.15% 1.50% 1.25%	3.3% 1.50% 1.25%
Cash-out Refi	N/A	2.15%	3.3%
IRRL	N/A	0.50%	–
Loan Assumption	N/A	0.50%	–

The full table of fees is here. The above numbers are higher for National Guard and Reserve members. You can see that the largest penalty is for those making no down payment. Even a 5% payment reduces the fee by 65 basis points.

The Benefits

1. 1. • Purchase Loan: Since the VA guarantees the loan you take out for your home, this covers the PMI cost you would otherwise incur after buying a home with less than a 20% down payment. If the home price does not exceed the appraised value, you will not have to make a down payment with a VA loan.
      • In the realm of closing costs, the VA loan protects the buyer in two ways. The first protection is that you can negotiate to have closing costs covered by the seller. The second is that the VA limits the closing cost amounts for buyers.
      • You will not see early pay-off penalties – meaning I can pay the loan off ahead of schedule.
      • You are assisted if you have trouble making payments. VA Regional Loan Centers offer financial counseling to help avoid foreclosure.
      • IRRL: This one lets you refinance your existing VA home loan. The greatest benefit to this loan is the ability to break an Adjustable Rate Mortgage (ARM) and roll all costs of the refinance into the new loan. Note that you can only use the IRRL if you already have an existing VA loan for the home.
      • Cash-Out Refinance: This is a variation of the Purchase loan. Use this to turn a non-VA loan into a VA loan. This loan covers up to 100% of the value of your home.

A potential downside to this loan is that I cannot receive cash from the loan.

Related: How to Save on Closing Cost When Buying a Home

1. 1. • NADL: The NADL has the most benefits of all the VA home loans. The interest rate is around 4% over a 30-year term. It is re-usable and, like the purchase loan, includes no PMI, no down payment, and county-specific loan limits.

The caveats for the NADL are that you must meet the credit risk standards and use the property as your primary residence. The property must be on Federal trust lands. To learn more about the requirements for the NADL, click here.

1. 1. • Adapted Housing Grants: As mentioned previously, these grants help disabled service members and veterans buy a home that meets their access needs. The VA keeps a list of disabilities here and has a great infographic covering the basics of this grant.

There are two types of Adapted Housing Grants: The Specially Adapted Housing (SAH) and the Special Housing Adaptation (SHA) Grant.

The SAH allows you to build an adapted home on land you own or plan to buy. It allows you to remodel your existing home to become suitable for specially adapted housing. It also allows you to apply the SAH grant money to the unpaid principal mortgage balance if you previously bought the home without VA assistance.

The SHA lets you adapt a current home, a future home, or buy a home that already meets your needs. An example would be buying a home that has a stair elevator or wheelchair ramp already installed. You can also find the house you want, and then use the adapted housing grant to change the home to meet your needs. If you become disabled during the period you own the home, the adapted housing grant lets you alter that home.

The Savings

Because the United States government backs the VA loan, there is no PMI for homeowners who cannot make a 20% down payment on their home. Using the loan calculators at whatsmypayment.com, you can easily see the cost savings of a VA loan versus a conventional loan.

Let’s assume you are buying a house for $175,000. Your interest rate is 4.00% and you are making a down payment of $0. You are assuming that your property taxes are about 1% of the value of the home, and you will pay $500 a year for insurance. The loan term is 30 years.

When using the calculator, you’d enter no down payment for the VA Loan and $6,000 (3%) for the conventional loan down payment:

$175,000 / 4.00% / 30 years	VA Loan	Conventional Loan
Down Payment	$0	$6,000
Monthly PMI	$0	$180
Funding Fee	$3,762	0
Loan Amount	$178,762	$169,000
Monthly Payment	$1,040	$1,174
Total Cost of Loan	$374,737	$382,166

Over the life of the loan, the difference in savings is $3,953. However, over the first 9.6 years, the savings of the VA loan versus the conventional loan is around $15,000. The 9.6 years is the time it will take to pay down 20% of the mortgage principal, ending the PMI fee for a conventional loan.

In this example, the VA home loan demonstrates a marked advantage for home buyers who plan to sell their home within the first decade of ownership.

Learn More: How to Get Rid of PMI

How Many Homes Can I Buy?

You can use the VA loan more than once, but you must meet certain requirements. If you pay off the loan and sell the house, you go back to square one. It’s as if you never even received a VA loan. It essentially clears the slate.

There is also a “one-time only” exception that allows you to use the VA loan twice, to buy another home even if you still own the original property. This also requires your having paid off the entire loan, though. You can own one home free and clear and use the VA loan program once more in this instance. The approval process for this option is briefly explained here.

More Info

If you are searching for VA offices in your state, click here to go to the VA state directory. You will find a list of VA offices by county, along with their address, phone numbers, and even a direct email link to at least one Veterans Service Officer at each county office.

If you have ever wondered about the steps of buying a home with the VA, they break down the steps via their Buying Process webpage.

Check out the VA Loan Captain for tons of great articles that answer a broad range of VA loan-related questions.

Closing Thoughts

The VA home loan program is an outstanding asset for members and veterans of the armed services. With no down payment, competitive interest rates, and no PMI, home ownership is possible for military members on a tight (but predictable) budget. You can connect with any local mortgage lender to find out if you qualify for a VA loan and learn about the options that match your individual situation.

Remember to do the math on how much house you can actually pay for – do not buy more house than you can afford! Do this and the VA Loan will be a well-deserved and appreciated benefit in your search for a new home.

Topics: Mortgages

The post Everything You Need to Know About VA Home Loans appeared first on The Dough Roller.

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Hiking to Mt Israel and Guinea Pond

How Much Life Insurance Do You Really Need?

When my wife and I first had children, one of the big questions I asked was a familiar one: How much life insurance do I need? While nobody likes to think of their own demise, it’s prudent to consider what financial ramifications your death could have on those you leave behind.

It gives me tremendous peace of mind to know that if I die, my wife will have enough to pay off all our debts and take care of our family. While it’s hard to dispute the sensibility of life insurance in general, many people disagree on how large of a life insurance policy you should have. So, here are some things to consider when you ask how much life insurance you should buy.

1. Rules of Thumb

When it comes to buying life insurance, there are some basic guidelines to help you determine how much you need. While no rule of thumb should be followed blindly, they can represent a good starting point for further analysis. Here are several widely-used rules of thumb when it comes to buying life insurance:

• 17 times salary: To calculate your suggested policy amount, simply take your annual salary and multiply it by 17. This approach is pretty easy: if you make $75,000 a year, you’d buy $1,275,000 in life insurance. With this amount of coverage, your beneficiary should be able to replace your income with interest and dividends earned from investing the life insurance proceeds. In effect, the 17 times salary rule of thumb is an “income replacement for life” model.
• Sliding Scale: Some suggest refining the multiplier above, based on your age. The younger you are, the higher the multiplier. For example, a 20-something would multiply their annual salary by 20, while somebody nearing retirement would multiply their income by just 5. This also aims to replace your income for life, but it assumes that if you’re young, your income will increase before your insurance term is up. It also assumes that those entering retirement need less because they should have retirement savings and assets, and are probably close to paying off things like their mortgage.
• 5 to 10 times salary: If you are not looking to replace your salary for life, many suggest just getting 5 to 10 times your current salary in insurance. The idea with this rule of thumb is to help your loved ones pay off debt and to have some time to grieve without the added stress of financial worry. However, it won’t replace anywhere near your full income for their lifetimes.

2. What Can You Afford?

Regardless of how much coverage you need, think you need, or someone says you need, a critical financial consideration is how much life insurance you can afford. Exceeding a balanced budget isn’t in keeping with sound financial planning, no matter the line item. Admittedly, adjusting your spending in other areas to increase the premium you can afford may be prudent.

Related: 4 Budget Types and the Tools For Each One

Besides budget considerations, it’s important to consider that missing payments can result in the termination of your policy. Then, you deal with having no life insurance at all, and possibly having to take out a new policy with a higher premium when you’re older. It’s better to opt for a smaller, more affordable policy than to risk losing coverage altogether when you fall on hard times.

Bottom line: don’t ask your family to live like paupers now so that, in the eventuality of your death, they can live like kings.

Make this your first order of business. This will help you to explore your maximum coverage without being stressed or tempted to buy more than you can afford. Find your maximum monthly payment, and stick to it as you seek quotes.

3. What Is Your Minimum Coverage?

None of us would mind making our family comfortable for the rest of their days. But before we tally up a $10,000 payoff for every second cousin, let’s consider the bare minimums needed. Typically, the most important factor people consider is liabilities.

Is there a car payment? A home mortgage? A serious desire to provide for your child’s college education? Evaluate what debts and costs your family will have to face without you. Also consider funeral and possible end-of-life expenses.

Add up these costs, and you’ll get the minimum coverage you need. (Can’t afford the premiums even on that smaller amount? Get as close as you can, and increase your coverage as soon as you’re able.)

4. What Do You Want to Accomplish?

The bulk of your baseline coverage should be dictated by the minimum coverage requirements you just tallied. However, there are those who do want a considerable amount more than what will meet their family’s financial obligations.

Many people evaluate what it would take to enable their grieving spouse to mourn for a year or two before returning to work. Others want to replace their income for life, so that a spouse never has to return to work. This consideration may be even more important if your spouse is a stay-at-home parent, and you don’t want that situation to change of necessity.

Learn More: Preparing Your Spouse to Invest After You’re Gone

Again, this depends almost completely on your individual lifestyle. So, give thought to what you’ll want the money to cover, over and above paying off your debt.

5. What About Non-Working Spouses?

Many of the calculations we’ve covered assume that you’re currently bringing in an income. But what if you’re a non-working spouse? Do you still need life insurance?

It depends. If you don’t have children at home, you may not need life insurance on yourself. Your spouse’s expenses may not increase significantly if you were to pass away.

But if you’re a stay-at-home parent, you’re providing significant services for the greater good of the family… for free. In this case, you need to add up what it would cost to replace the essential services you provide. At a minimum, your spouse would have to cover childcare. If your spouse works full-time and would be raising the children as a single parent, should you pass away, you might want to factor in additional services like regular house cleaning, grocery delivery, and more.

Again, you can decide whether you want to cover these services until your children are adults, or just for a year or two after your untimely demise.

6. Rules of Thumb Revisited

As described above, most rules of thumb for life insurance involve multiples of your salary. If you’re looking for minimum coverage, I’d say stick with the tally of your basic liabilities and goals. This will be more realistic and likely more affordable than blindly following a rule of thumb. If room clears in your budget later for a more expensive policy, you can always add a second policy or increase your current coverage amount.

However, if you are looking for your family to continue receiving the equivalent of your monthly paycheck for X number of years, then a multiple of your salary is a good approach to choosing the amount of life insurance to buy.

7. Don’t Forget About Terms!

I’ve made the assumption that your search for life insurance will likely bring you to the conclusion that term life insurance will meet your needs. To get a sense for the differences in life insurance (term, whole, permanent), check out our article discussing permanent life insurance.

At the same time you’re deciding on how many dollars of coverage you’ll need, you’ll also be faced with the question of how many years you’ll need the coverage. Ultimately, most financial gurus advocate self-insuring during the latter half of your life. Self-insuring simply means that you have enough money and assets to achieve the same financial goals you have identified above.

Read More: How Long Should Your Life Insurance Term Be?

If you’re debt-free, or at least largely debt-free, and your children are grown, you may not need a large life insurance policy any more. Since life insurance is cheaper to get when you’re young, consider taking out a sufficient policy as soon as you’re married or have your first child, and choose a term that should last until your last child flies the nest.

8. Do You Need a Professional?

Life insurance can, and should, be part of a larger estate plan for the wealthy, who will need to worry about things like inheritance taxes upon their deaths. But if you don’t need this type of estate planning, you can most likely make a wise life insurance policy choice on your own.

Comprehensive financial planning can be helpful in some cases, especially if you can get a financial plan without paying a huge fee. With that said, choosing the correct life insurance term and amount isn’t rocket science if you walk through these steps.

Don’t put off getting a life insurance policy just because you aren’t ready for financial planning services. Get at least enough to cover your basic needs. You can always ask for advice later if you decide you might want to increase your policy, or if you wind up in a trickier situation such as figuring out how to provide for a child with disabilities.

Related: How to Ensure That Your Life Insurance Proceeds Are Tax-Free

Summary:

• In the event of calamity, having some life insurance is better than having none. Don’t put off the decision.
• You can always layer coverage using multiple policies, meaning if you didn’t buy enough coverage the first time, you can get additional coverage through another policy.
• People joke that you want to have enough coverage to make your spouse comfortable, but not enough to make them too comfortable with the idea of living without you. There might be something to that.
• Perks and rewards are obviously secondary to premium amounts and coverage, but different insurers offer different benefits and features. Check to see if you receive any premium back at the end of your term, additional accidental death payouts, and terminal illness payouts.
• Unless you have a particularly complex life situation, you can probably choose a good life insurance policy on your own.

To get a quote on term life insurance, visit Haven Life.

Topics: Life Insurance

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Princeton Tec Helix Backcountry Rechargeable Lantern Review

3 Common Window Treatment Problems and Their Solutions

Finding the perfect window treatment is important because it should complement your décor and furniture at home. Below, you’ll find three of the most common window treatment problems and their solutions to help you achieve the window treatment look you’re aiming for.

Image Source: Flickr

Light leaks and gaps in window treatments
Windows vary considerably in width and height, not to mention all the other details that will impact the fit, such as trim, molding and sill depth. If you’re experiencing significant light leaks and large gaps, then it’s possible your window treatment is the wrong size for the space or the product wasn’t installed in the window frame correctly.
Choosing a custom solution that includes professional measuring ensures your window covering will be fabricated to your exact window specifications. When combined with professional installation, this guarantees your new blinds, shades, shutters or drapery will fit perfectly and function as intended. Source: AngiesList

Not getting the length right
The length of curtains is pretty vital to a room. Too short, and it’ll look like you didn’t buy them long enough. Many will say long enough that they hover just above your floor; this will allow the look of length but without the dirt dragging possibilities. But those who want a really formal, lux look might consider too-long curtains that pool at the ground. Source: ApartmentTherapy

Problem: Lack of privacy outside.
If you’re lucky enough to have a porch, back deck, or balcony, you probably love spending time out there. While you love the extra space, you probably don’t love the wandering eyes of your neighbours.

Solution: Hang curtains outside.
Put up curtains outside to give some space and privacy between you and your neighbours. Not only does adding curtains outside create privacy, it also transforms the outdoor space into another living space. Bonus room without the reno. Source: Blog.HomeStars

If you’re experiencing problems aside from the ones stated above, let our experts help you out. Contact us!

 

Contact:
Universal Blinds
601 – 1550 W. 10th Ave
Vancouver, V6J 1Z9, Canada
Phone: (604) 559-1988

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3 Tips to Maximize Bathroom Space

Content originally published and Shared from http://perfectbath.com

Clutter can easily make a room look smaller. But if you already have a small bathroom to begin with, keeping things organized may not be enough to make the space look easy on the eyes. To make a bathroom look bigger, maximize the space by following these tips:

Image Source: Flickr

Open Up Floor Space
If you have alternative storage or a linen closet, replace the vanity cabinet with a pedestal or wall-mount sink. While the additional floor space won’t exactly be usable, it will trick the eye into believing the room is larger. Source: DIYNetwork

Use Glass
Get rid of the shower curtain or frosted-glass shower doors and replace them with clear glass. It will open up the shower area, making it a part of the entire room and giving the appearance of more space. Source: DIYNetwork

Trick the Eye
Various visual effects give the illusion of more space in your bathroom than actually exists. A well-placed mirror reflects light and adds depth to a room. Hang one large mirror in the bathroom, positioning it so it’s one of the first things you see when you walk in the door. Or add a decorative eye-catching focal point such as a painting, sculpture or plant. Having something attractive for the eye to fall on takes the focus off of the fact that the space is small.
Painting in light, neutral tones also helps open up the room, as does using multiple shades of the same light paint color. Opt for paint colors like beige, cream, taupe and off-white, as well as muted blue, gray, yellow, pink and blue. If you want bright complementary colors, introduce them through accessories like towels and soap dispensers. Source: Learn.CompactAppliance

 

Contact:
Perfect Bath
Phone: Toll Free 1-866-843-1641
Calgary, Alberta
Email: info@perfectbath.com

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NOW HIRING Challenge Course Faciliators

Want a fun, challenging and rewarding job? Become a Challenge Course Facilitator for our Outback Adventures Challenge Course on campus!

Challenge Course Facilitator Job Announcement:

The UCSD Challenge Course is seeking dedicated individuals to hire and train as facilitators. Ideal applicants for this entry-level position possess a combination of both interpersonal and technical skills. The Challenge Course staff is made up of part-time/contract student and non-student facilitators. Facilitators develop skills and experience through a process that includes initial training, mentoring, shadowing, and on-going training and skills development. These skills will be personal and professional assets for the rest of your life.

About the UCSD Challenge Course:

The UCSD Challenge Course provides adventure-based teambuilding program designed to develop communication and teamwork through challenging activities. Our course is located in the eucalyptus forest on the beautiful UCSD campus, an ideal setting for a variety of ground-based and high course activities. Our programs serve campus, community, and corporate groups, providing each an opportunity to problem solve and overcome obstacles as a team—from up to 45 above the ground.

Summer Orientation/Training: Wednesday-Saturday, June 21-24, 2017 (8am to 6pm)

Our fall training will provide future facilitators with the foundational knowledge to confidently guide groups through teambuilding/leadership programs on and off the course, including facilitation and technical skills training. All accepted applicants will be required to complete this 40-hour training before being hired by UCSD.

Scheduling and Pay

Following the training and shadowing process, Facilitators can expect to work between 6-30 hours/week through the busy program season (May-October). There rest of the year can still be quite busy but the work is not consistent. Beginning pay is $12/hour for Students and $14/hour for non-students.

Application

To learn more and apply, visit http://ift.tt/2cGXWd6  If you have additional questions, please contact Denise Ouellette, Challenge Course Director, at

858-822-3558, or email teamchallenge@ucsd.edu.

Important Dates

Application Deadline: Sunday, June 4

Date                                            Event                            Time

Sunday, June 4                          Application Deadline        – – –                                 Online Application

Wednesday, June 21                Staff Training                 8:00am-6:00pm              UCSD Challenge Course

Thursday, June 22                    Staff Training                 8:00am-6:00pm              UCSD Challenge Course

Friday, June 23                          Staff Training                 8:00am-6:00pm              UCSD Challenge Course

Saturday, June 24                     Staff Training                 8:00am-6:00pm              UCSD Challenge Course

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The 6 Best No Fee Balance Transfer Credit Cards with 0% Interest Rates

Balance transfer credit cards offer an enticing way to pay down debt. With no interest for up to 21 months, these 0% cards can take the stress out of the budget.

Table of Contents

• 1. Barclaycard Ring™ Mastercard^®
  2. Chase Slate^®
  3. Alliant Credit Union Visa Platinum Card
  4. Edward Jones Mastercard^®
  5. Aspire Platinum Rewards Mastercard^®
  6. Navy Federal Platinum
• Longest 0% Offer
• How to Choose

There’s just one problem…. the balance transfer fee.

Credit card companies typically charge 3% or 4% of the amount transferred as a fee. This fee is then added to your balance on the new card. While this may still be a good deal, an even better deal would be a no-fee balance transfer. But there’s a catch.

They are really hard to find.

Most no-fee balance transfer credit cards come from lesser known credit card companies. For this reason, we’ve spent hours researching the available offers. We’ve found six options that we think are worth considering.

Best No Fee Balance Transfer Credit Cards

Barclaycard Ring™ Mastercard^® – The Barclaycard Ring™ Mastercard^® is our favorite fee free balance transfer credit card for a variety of reasons, the lead being it offers the longest 0% intro APR on purchases and balance transfers at 15 months.  The balance transfer must be made within the first 45 days of opening the account. The standard APR after the 0% intro rate has expired is a very modest 13.74% variable.

A few additional perks of the Barclaycard Ring™ Mastercard^® is that it carries no annual fee, does not charge a foreign transaction fee, and offers free access to your monthly FICO^® credit score, so you can keep on top of your credit history. You must have excellent credit to qualify for this card. A FICO^® score of less than 700 is unlikely to qualify.

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Chase Slate^® – The Chase Slate^® is very similar to the top card on our list as it also offers a 0% intro APR on purchases and balance transfers for 15 months with no balance transfer fee. To receive the 0% intro offer and transfer balances fee free, you must transfer the balance within the first 60 days of account opening (giving you a little bit more time than the top card above).  When the intro APR expires, the ongoing APR becomes 15.74% – 24.49% variable and there is no annual fee to own the Chase Slate^®.

You must have excellent credit to qualify for the Chase Slate^® card. Approved cardmembers generally begin in the 690 FICO^® score range and once approved, the Chase Slate^® offers a free credit dashboard and a monthly FICO^® score.

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Alliant Credit Union Visa^® Platinum Card – Lowering the intro period by three months, the Alliant Credit Union Visa Platinum Card offers new cardmembers a 0% intro APR on purchases and balance transfers for 12 months with no balance transfer fee.  After the introductory rate expires, the standard APR becomes 9.99% – 21.99% variable, based on credit history. The Alliant Credit Union Visa Platinum Card charges no annual fee or foreign transaction fees.

To be approved for this card, you must be a member of the Alliant Credit Union.  The easiest way to achieve this is by making a one-time $10 donation to the Foster Care to Success charity group but membership can also be acquired by being a member of a qualifying organization or working within the Chicagoland community.

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Edward Jones Mastercard^® – This is admittedly the credit card with the best overall offer. The Edward Jones Mastercard^® includes a 0% intro APR on balance transfers for the first 12 months. There is no balance transfer fee as long as the balance is transferred within the first 60 days.  Also included for first-time cardholders is a $100 bonus after spending $500 in the first 90 days of account ownership.  After the intro APR expires, the variable interest rate becomes 13.74%.

The Edward Jones Mastercard^® also includes a robust rewards program where up to 2 points per dollar spent are earned on all purchases.  There is no annual fee to own this card, no foreign transaction fees but the rub is that you must be an Edward Jones client, which makes this card very exclusive.  Excellent credit is required (no FICO score guidance).

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Aspire Platinum Rewards MasterCard^® – New cardmembers of the Aspire Platinum Rewards Mastercard^® will receive a 0% intro APR on balance transfers for six months with no balance transfer fee.  Standard purchase and balance transfer APR is 10.99% – 21.99% variable and there is no annual fee.  Also included for new applicants is a 5,000 bonus point reward after spending $2,000 in the first three months. The spending requirement includes any balance transfer you make.

You must be an Aspire Credit Union member to apply for this card. Membership is available to employees of participating organizations, their immediate family members, and their household members. Alternatively, you can make a $5 donation to the American Consumer Council.

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Navy Federal Platinum – Last on our list is the Navy Federal Platinum (available in both Visa and MasterCard).  Unfortunately, this card does not offer a 0% intro APR opportunity. It does include fee-free balance transfers and a standard variable interest rate of 8.74% – 18.0%. By far, that’s the lowest interest rate range on a no fee balance transfer credit card. If you have trouble getting approved for the cards above, you can still save money with this card.

The Navy Federal Platinum card does not charge an annual fee or foreign transaction fees. This card does require good to excellent credit. New applicants can sneak in with a FICO score of 660 or better.  However, you must be a member of the Navy Federal Credit Union in order to apply. That requires that you or a family member serve in the military.

Best Balance Transfer Credit Card w/ a BT Fee

The biggest downside to the available no fee balance transfer options above is the length of the 0% introductory offer.  A 0% APR for 15 months is good. There is a card on the market, however, that has a longer deal. It offers a 0% intro APR on balance transfers for 21 months, and it’s the Citi Simplicity^® Card. Other perks include no over-limit fees, no late payment fees, and an equal 0% intro APR on purchases for 21 months.

Should you apply for the Citi Simplicity^® Card or our favorite fee free balance transfer credit card, the Barclaycard Ring Mastercard?  Well, that decision depends on your financial situation.  If you can pay off your balance in 15 months, then the Barclaycard Ring Mastercard is the way to go.  If you need longer, then the 3% balance transfer fee may be worth it for the extra six months. In this case, go with the Citi Simplicity^® Card.

In either situation, the most important thing you can do if you’re struggling to pay down your credit card debt and have the quality credit score needed for one of the best balance transfer credit cards above is to apply and transfer the credit card balance with the highest interest rate as fast as you can.

How to Choose

As you consider your options, keep the following in mind:

• Balance transfer fees are just part of the equation: While it’s a good feeling to get something for free, the fees are just part the equation. You should also consider the length of the 0% balance transfer offer. That’s why we included the Citi Simplicity^® Card on our list of no fee offers.
• You may want multiple balance transfer cards: You may need more than one card. This is particularly true if you have a lot of credit card debt to transfer. A single card may not give you the credit limit you need to transfer all of your debt. In this case, you may select no fee cards as well as longer 0% offers.
• Same issuer transfers are not allowed: Most credit card companies prohibit transfers between two of their own cards. Keep this in mind as you are mapping out your strategy.
• Credit unions have some excellent offers: Included in our list are cards from credit unions. While you may need to jump through some hoops to qualify, it may well be worth the effort.
• Keep balance transfer cards separate: It’s best not to use a balance transfer card for spending. The goal of a balance transfer is to help you get out of debt. Spending more on the cards may derail your efforts.
• Have a plan when the 0% offer expires: If you can’t pay off the debt before the end of the introductory offer, have a plan. This may include transferring the remaining balance to another 0% credit card.

 

Topics: Credit Cards

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How to Attach a Trekking Umbrella to a Backpack

The 9 Best Investment Strategies for Short Term Savings Goals

It’s a common problem.

You’ve got some cash in a savings account earning a paltry 0.01%. You plan to spend it to buy a home or a car or something else in a few years. How can you invest the money until then to earn some extra interest?

Table of Contents

• What is a Short Term Investment?
• The 9 Best Short Term Investments
  1. Online Savings Account
  2. High Yield CD
  3. Short-Term Government Bonds
  4. Bulletshares
  5. Municipal Bonds
  6. Betterment
  7. Lending Club
  8. Wealthfront
  9. SmartyPig
• Stock Market

It’s called short term investing and it’s tricky. Put your money in the stock market and it could be gone when you need it. Put it in a traditional savings account and it earns practically nothing. So, what should you do?

Recently, a listener to our podcast, Michael, emailed me with just this dilemma:

Hey, Rob. I wanted to get your thoughts or maybe you could point me to a podcast. I am currently in the oil industry and have survived the layoffs at my company. It looks as if things are turning around. Over the past two years I’ve stacked up some cash in my Ally Bank savings account at one percent interest. I don’t currently need the cash at this moment but could need the cash within the next year or two in order to purchase land for my family. If I wanted to invest the cash but be able to have it back in one way or another within two years, what is the best way to go about this? A brokerage account which we currently own? I know there are short and long-term capital gains which might still outgain a one percent interest but I’m just curious on your thoughts.

Let’s answer Michael’s question.

Listen to the podcast on this topic:

What is a Short Term Investment?

What exactly is a short term investment?  Well, there is no official definition. There is no governing body that defines what short-term or long-term investing is. It’s arbitrary.

For me, short-term investing is investing money you’re going to need to spend in fewer than five years.

Why five years? Because most of the time, the stock market doesn’t lose money over a 5-year period. It can, of course. Go back to the 1930s and 40s and you’ll find 5-year periods where the market was crushed, as this Bankrate slideshow demonstrates… 1932 was the worst. The 5-year period ending that year saw a drop of 60.9%.

But that’s rare.

When we have a pretty significant stock market correction or a bear market, it usually takes us at least five years to pull out of it. Of course, that’s not a guarantee. We could hit a bear market and it could take us 10 years to pull out of it.

Either way, five years is where I draw the line. You may want to draw your own line more conservatively… or even less conservatively, for that matter. What I hope to do today is give you some information that will enable you to make a sound decision.

So, let’s begin.

The 9 Best Short Term Investments

1. Online Savings Account

Traditional banks pay as little as 0.01% on a savings account. That’s as close to zero percent as you can get.

One option for short-term savings that pay more is to go with an online bank. While the rates are still nothing to brag about, the top online savings accounts today pay about 1.05%. You can see the top current rates here.

Pros

• FDIC insured
• Funds can be withdrawn at any time
• Rates better than a brick and mortar bank
• No fees

Cons

• Interest rates are still low
• Inflation exceeds the rates

Expected Annual Return: 1.05%

2. Certificate of Deposit

The second option for short-term money is a certificate of deposit. CDs give us a lot more options than a savings account. The term of a CD can range from a few months to more than five years, and the longer the term, the higher the rates.

These higher rates, however, come with added risk. Here’s why.

A CD can be cashed in before it matures. For example, you could invest in a 5-year CD, but decided to withdraw your money after the first year. If this happens, however, most CDs charge a penalty. The amount of the penalty varies by bank and CD product.

As a result, it’s best to keep money in a CD until it matures. For this reason, picking the length of the CD is a critical decision.

So, you end up having this delicate dance—you want a long CD term so that you can make the most interest. But you don’t want to pay a penalty if you take the money out early.

Pros

• FDIC insured
• CD terms ranging from 6 months to 5 years or longer
• Higher interest rates on longer term CDs
• Can create a CD ladder

Cons

• Still relatively low interest rates
• Penalty for early withdrawal

Expected Annual Return: 1.00 to 2.50%

Here is a list of banks that offer high-yield CD options:

3. Short Term Bonds

Our third option is short or intermediate term bond funds. More specifically, we want to look at low-cost index mutual funds and ETFs. Both Vanguard and Fidelity offer several options.

Here, you have some important choices to make. Do you want a fund that invests just in U.S. government bonds or one that also invests in corporate bonds? Do you want a short-term bond fund or an intermediate-term bond fund?

Like everything else in life, these choices involve trade-offs.

U.S. Government bonds are more secure than corporate bonds, but they pay less. Short-term bonds are less sensitive to interest rate fluctuations than intermediate-term bonds, but they pay less. Today, short-term government bonds do not pay much more than an online savings account. For example, the SEC yield on Vanguard’s short-term Treasury fund is just 1.25%.

For my money, I want to do better than that in a bond fund. While intermediate term funds can lose money in a given year, they are reasonably stable. Vanguard’s Intermediate-Term Bond Index Fund (VBILX), for instance, costs just 0.07% and sports an SEC yield of over 2.50%.

A review of the performance of VBILX shows that it lost money in only one of the past ten years:

Pros

• While not FDIC-insured, still reasonably secure
• Intermediate-term bonds can yield significantly higher rates than a savings account
• Money can be withdrawn from the fund when needed

Cons

• Not FDIC-insured
• Can lose money
• Rates are historically low

Expected Annual Return: 1.00 to 6.00%

4. Bulletshares

There is a downside to traditional bond funds. They can experience capital losses as funds sell some bonds to buy new ones. If interest rates have risen, the fund incurs a loss on the sale of bonds.

Enter Guggenheim’s Bulletshares. These ETFs combine the potential returns of a bond fund with the fixed maturity of a CD.

Traditional bond funds continue in perpetuity. The fund management regularly sells bonds as maturities age and replace them with new bonds with longer maturities. In contrast, Bulletshares have a defined term of one to ten years.

At the end of the term, assets are returned to existing shareholders. And unlike CDs, a shareholder can sell his or her ETF shares at any time without penalty.

Related: How to Limit Taxes from ETFs

Bulletshares come in two flavors: (1) corporate bonds and (2) high-yield corporate bonds. The first invests in investment grade corporate bonds. The second buys bonds issued by corporations with a credit rating below investment grade. It involves more risk but offers higher returns.

As an example, the Guggenheim BulletShares 2020 High Yield Corporate Bond ETF has a current yield to maturity of over 5%.

Pros

• Potential for higher returns
• ETF shares can be sold at any time
• Fixed maturity dates

Cons

• Not FDIC-insured
• Funds can lose money

Expected Annual Return: 1.50 to 5.50%

5. Municipal Bonds

There is a significant downside to bonds: taxes. Interest earned on bonds is taxed, as are any capital gains.

One option to reduce the tax burden is municipal bonds (known as “munis”). These bonds are typically free of federal income tax and may be free from state income tax, too. Munis are an excellent option for those in the higher federal tax brackets.

I’ve invested in Vanguard’s Intermediate-Term Tax-Exempt Fund (VWIUX) in the past. SEC yields on these funds are lower than similar taxable bonds. The comparison must be made on an after-tax basis. This fund currently sports an SEC yield of almost 2%.

Pros

• Potential for higher returns
• Tax advantages
• Easy access to funds without penalty

Cons

• Potential for losses
• Not ideal for those in lower tax brackets

Expected Annual Return: 2 to 5% (after tax)

6. Betterment

Betterment presents an interesting opportunity for short-term investors. It’s not an investment. Rather, it’s an online company that makes investing in stock and bond ETFs easy.

The service can be used for all types of investing, including long-term retirement investing. To use Betterment in the shorter term, you must get the asset allocation right.

Learn More: The Perfect Asset Allocation Plan

Betterment lets investors decide how much to put in stock ETFs and how much to put in bond ETFs. For short-term investing, a 50/50 allocation protects against the downside while allowing for potentially higher returns.

Here’s the 50/50 asset allocation with Betterment:

The 50% in stocks gives us a chance to earn greater returns. The 50% in bonds helps protect short-term investors from a market crash.

There are no guarantees, of course. But looking at a 50/50 portfolio during the 2008-2009 market crash gives us some comfort.

Using PortfolioAnalyzer, I assumed we invested $10,000 at the start of 2008. Assuming we needed the money three years later, how would our 50/50 portfolio perform over a 3-year period. Remember that in 2008, a total U.S. stock index fund lost more than 37%.

Here are the backtested results of our 50/50 portfolio:

The portfolio still lost money in 2008, although far less than the 37% that the market dropped. And what was our final portfolio value at the end of 2010? It grew to $11,014, for an annual return of 3.27%.

While 3.27% is not a great return, remember that 2008 was a very bad year for stocks. Shift our time period one year forward (2009-2011) and our annual return jumps nearly 11%.

As a result, a 50/50 portfolio with Betterment is a reasonable choice for those needing the money in three to five years.

Pros

• Very easy to implement
• Money can be withdrawn at any time
• Potential for much higher returns
• Fees are very low

Cons

• Not FDIC-insured
• Potential for capital losses

Expected Annual Return: 0 to 10+%

7. Lending Club

Lending Club offers another option with the potential for better returns. This P2P lending platform makes it easy to invest in loans to individuals and companies.

It’s also perfect for short-term lending. Loans on the platform are for either three or five years. If you know you won’t need the money until then, Lending Club is a reasonable alternative.

I’ve invested in Lending Club loans since the platform was first launched. My current annualized return, including loans that defaulted, is over 8%.

With higher returns, however, comes higher risks. Loans do go into collection and eventual default from time to time. Over the years, I’ve invested in 17 loans that defaulted.

The key is diversity. You can invest in a loan with as little as $25. By diversifying across many loans, you minimize the effect a single default will have on your portfolio.

Pros

• Very easy to invest in a diversified loan portfolio
• Potential for high returns on a short-term basis

Cons

• Not FDIC-insured
• Cannot liquidate the loans early
• Potential for losses

Expected Annual Return:  5.00 to 7.00+%

8. Wealthfront

Like Betterment, Wealthfront is a robo-advisor that makes investing easy. I list it here in addition to Betterment for one reason: It’s free.

Well, it’s free for your first $10,000. After that, the cost is similar to Betterment. For both, you pay the very low fees charged by the ETFs. You also pay a Betterment or Wealthfront fee of about 25 basis points.

With Wealthfront, however, the 25 basis point fee is waived for the first $10,000.

Pros

• Very easy to implement
• Money can be withdrawn at any time
• Potential for much higher returns
• Fees are very low

Cons

• Not FDIC-insured
• Potential for capital losses

Expected Annual Return:  0 to 10%

9. SmartyPig

The final investment option on our list offers an interesting twist to online savings accounts. SmartyPig combines a high-yield with savings goals.

First, the high yield.

As you’ll see below, SmartyPig tends to offer rates higher than even most online banks:

Now, the savings goals.

With SmartyPig, you set specific savings goals. You can set multiple goals, or just one. You then add to the account until you reach your goal. In this way, SmartyPig is ideal for short-term savers.

Related: How to Establish Financial Goals

Pros

• FDIC-insured
• Potential for returns higher than most online banks
• Makes saving for a specific goal very easy

Cons

• Low rate compared to other options

Expected Annual Return: 1.00+% (depending on account balance)

Is the Stock Market a Good Place for Short Term Investing?

We could stop here. After all, the above short-term investing options should cover most situations. Yet. there remains one question that many ask.

Why not just put all our money in the stock market?

It’s an understandable question. Particularly when the market is rising, missing out on money can be painful. It’s funny, though. Nobody asks me this question in a bear market.

And that’s the point. With the stock market, you can lose money over a short period of time.

Thinking Long Term: Sweat In Up Markets So You Don’t Bleed In Down Markets

Let’s return to 2007 and run a test. We’ll use the Vanguard S&P 500 index fund as a proxy for the market. And we’ll assume we have $10,000 at the start of 2007, that we’ll need to use in three to five years.

How would a $10,00o investment have performed? At the end of three years, we would have $8,395, for an annual return of -5.66%. At the end of five years, we would have $9,837, for an annual return of -0.33%

Yes, 2008 was a bad year. But again, that’s the point. Investing 100% of short-term money in the stock market presents a significant risk of loss of capital. Fortunately, we have better ways to invest for the short-term.

Happy investing!

Topics: Investing

The post The 9 Best Investment Strategies for Short Term Savings Goals appeared first on The Dough Roller.

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