Category: Saving

What Do I Need to Know About the Recent Student Loan Changes?

by Advantage One, posted in Budgeting, Lifestyle, Loans, Saving, Tips & Best Practices, Uncategorized

Q: There have been so many changes to federal student loans over the last few years, and I’ve heard there are more coming. As a college graduate with a federal student loan, what do I need to know about these changes and how will they affect my payment plan?

A: Student loans have undergone quite a few changes over the last few years. Backtracked statements and moving rollout dates have only made the headlines more confusing. As a borrower, though, it’s important to keep up with these changes and stay informed about how they will impact you. Here, we’ve outlined the important changes you need to know about and included steps you might need to take to benefit from these adjustments. 

A brief overview of recent student loan changes 

First, let’s take a look at the timeline of student loan changes of the last few years: 

  • Mar. 2020-Forbearance (a temporary pause) on student loans is enacted by the federal government in response to financial hardships caused by the coronavirus pandemic.
  • Apr. 2022-The Education Department announces an Income-Driven Repayment (IDR) plan and Public Service Loan Forgiveness (PSLF).
  • Oct. 2022-Congress passes the Joint Consolidation Loan Separation Act.
  • June 2, 2023- A debt-ceiling deal is passed by congress. A provision in this deal prevents any further payment pause extensions on federal student loans. 
  • June 30, 2023-President Biden’s proposal to erase up to $20,000 in federal student loans is struck down by the U.S. Supreme Court.
  • July 14, 2023-The Education Department announces that the first major wave of loan forgiveness is coming for over 804,000 borrowers.
  • July 30, 2023-Parts of the IDR plan goes into effect.
  • Sept. 1, 2023-Interest on student loans resumes accrual.
  • Oct. 1, 2023-Student loan payments resume.
  • July 1, 2024-The rest of the IDR plan goes into effect. 

Forbearance ending on Oct. 1, 2023

After more than three years of student loan pauses, payments are set to resume this October. In the meantime, though, interest will begin accruing again on Sept. 1. Borrowers who’ve grown accustomed to skipping their monthly payments will need to readjust their budgets for these “new” bills. 

Steps to take: If you have an open student loan, prepare for the change in your budget instead of waiting until it hits you by surprise. Review your budget to see whether you have room for this new expense or if you need to make some major adjustments. If you are unsure of how much your monthly payment will be, contact your loan servicer now to find out. 

PSLF account adjustment, or waiver

On July 14, the Education Department announced that loan forgiveness is coming for more than 804,000 borrowers who’ve been paying off their student loans for at least 20 years. In total, close to $39 billion in student debt will be automatically wiped out with this adjustment. Millions more borrowers will have three years of additional credit toward forgiveness under the new plans when their accounts are updated next year. 

If you’ve been steadily paying off a student loan for at least 20 or 25 years (including forbearance) you’ll be student debt-free after the adjustment. If you borrowed less than $12,000, you’ll be debt-free even if you’ve only been paying off your student loan for 10 years. 

Steps to take: The adjustment is mostly automatic. However, if you have a loan from the Federal Family Education Loan (FFEL) Program, Perkins or Health Education Assistance Loan (HEAL) Program, you must apply to consolidate them at StudentAid.gov by the end of 2023 to enjoy the full benefits of this adjustment. The consolidation process can take a while, so get started as soon as you can. 

A new IDR plan

The existing income-driven REPAYE plan is being replaced by a new, broader plan called Saving on A Valuable Education, or SAVE. SAVE is expected to halve the monthly payments for many borrowers. 

Steps to take: Borrowers can sign up for this new plan before forbearance ends this fall. However, the full plan will not take effect until July 2024. If you are already enrolled in the REPAYE plan, your loan will automatically be moved into the SAVE plan in October.

Also, if you qualify for the PSLF waiver above, but you’ll have a balance remaining after the adjustment, you’ll need to sign up for an IDR plan when payments resume this fall to keep building credit toward loan forgiveness. If you believe you are in this category, be sure to contact your servicer to get your paperwork submitted soon. This way, it’ll be set up to go into an IDR plan as soon as forbearance ends. 

Student loan servicer switches

In April, 2023, the Education Department signed contracts with five federal student loan servicers, which are expected to go live in 2024. Eventually, the department plans to launch a central servicer portal at StudentAid.gov, but for now, it’s important to know the name and contact info of your servicer. If the department transfers your loans to another servicer, your current and new servicers will notify you of the change.  

Steps to take: Make sure your contact information is up to date with your current servicer. 

Other student loan changes underway

There are several other changes underway for student loans:

  • Fresh Start program for delinquent or defaulted loans. Borrowers with past-due loans now have more opportunity to get them back on track through the new “Fresh Start” program. Eligible borrowers must sign up for Fresh Start within one year of the end of forbearance on myeddebt.ed.gov or by calling the Education Department at 800-621-3115.
  • Updated bankruptcy guidance. The departments of Education and Justice jointly released updated bankruptcy guidance in November 2022 to standardize the requirements for borrowers to discharge their federal student loans in bankruptcy.
  • Joint Consolidation Loan Separation Act. Passed in October 2022, this law allows consolidated student loans of spouses to be separated so that each partner can access debt relief for their loan. 

Use this guide to stay informed on recent student loan changes. 

Should I Take Out a HELOC to Pay Off My Credit Card Debt?

by Advantage One, posted in Budgeting, Credit, Debit, Lifestyle, Loans, Saving, Tips & Best Practices, Uncategorized

Q: I’m struggling to pay down my credit card debt and I’m wondering if it’s a good idea to use my home’s equity to pay it off. Maybe then I could make some real progress. Should I take out a HELOC to pay off my credit card debt?

A: Your home’s equity can be a versatile financial tool, but using it to pay off your credit card debt can potentially be risky. Let’s take a look at the pros and cons of using a HELOC to pay off credit card debt so you can make an informed decision about this financial move.

Pros of using a HELOC to pay off credit card debt

Under specific circumstances, it can be a good idea to use a Home Equity Line of Credit to pay off consumer debt. 

Here are some of the pros of using a HELOC to pay off credit card debt:

  • Favorable interest rates. Interest rates on HELOCs tend to be lower than interest rates on most credit cards. Moving the debt to a HELOC can potentially save you thousands in interest payments. 
  • Potential tax benefits. The interest payments on a HELOC can be tax-deductible if the funds are used to increase the value of the home. You may be able to pay off your credit card debt, improve your home and then enjoy the tax benefits of a HELOC. Be sure to consult with a tax professional about this before considering this factor.
  • Streamlined monthly payments. When you consolidate your credit card debt to a single loan, it’s easier to keep on top of the monthly payments. 

Cons of using a HELOC to pay off credit card debt

Unfortunately, using a HELOC to pay off debt has significant possible disadvantages as well. 

Here are some of the cons of using a HELOC to pay off credit card debt:

  • It uses your home as collateral. A HELOC is a line of credit taken out against your home’s value. This means if you default on the payments, you risk losing your home.
  • You can end up upside-down on your home loan. If your home’s value drops at some point in the HELOC’s term, you can end up owing more on your home than it’s actually worth. 
  • You may end up in even more debt. If you don’t change your financial habits, transferring your debt to a HELOC can land you right back in deep debt. Without solving the underlying issue, such as insufficient income or the inability to control your spending, you can end up using your new line of credit (or even the credit cards you just paid off) to overspend and ultimately have more debt than when you started.
  • Fluctuating interest rates. While a HELOC’s APR may initially be lower than a typical credit card’s APR, its rates are generally variable and subject to fluctuations in the market. The APR can rise over time, increasing your monthly payment amount and making budgeting and affordability challenging.
  • Extended repayment terms. HELOCs can have repayment terms of 10 years or longer. This means that transferring credit card debt to a HELOC is not a quick fix for your debt. 

Before using a HELOC to pay off credit card debt

If you decide to go ahead and take out a HELOC to pay off your credit card debt, first consider these factors:

  • Your debt repayment strategy. Evaluate your spending habits and assess whether a HELOC will help you address the underlying causes of your credit card debt. Develop a realistic debt repayment strategy that includes a budget, emergency fund and a plan to avoid incurring additional debt in the future.
  • Financial stability. Examine your overall financial situation, including income stability, employment prospects and future financial goals. Before opening a HELOC, you need complete confidence in your ability to make timely payments while maintaining your other financial obligations.
  • Loan terms and fees. Be sure to thoroughly research and compare HELOC offerings from different financial institutions. Pay close attention to interest rates, repayment terms, rate adjustments, fees and any potential penalties.

Taking out a HELOC to pay off credit card debt is generally not recommended, but it can be a viable option under specific circumstances. Use this guideline to make an informed decision about this financial move. 

Travel Hacks 8 of 12 – Six Ways to Save on Vacation Food Costs

by Advantage One, posted in Announcements, Budgeting, Lifestyle, Saving, Tips & Best Practices, Uncategorized

When you’re traveling on a budget, food expenses can quickly destroy all your carefully planned savings. From trying out the best local restaurants to splurging on snacks and drinks on the road, food costs while on vacation add up and can take a big bite out of your budget. Lucky for you, though, paying for your eats when you’re away doesn’t have to cost a ton of money. Here are six ways to save on vacation food costs. 

  1. Research local eatery options 

When your stomach is grumbling and you’re desperate for a delicious, hot meal, you likely won’t have the willpower to make the best choices about where to go for dinner. Instead, if you plan on dining out while on vacation, research your options before you head out on your trip. This way, you can look up local eateries from the comfort of your home, and compare prices and ratings so you can make the best decisions for your vacation and your budget. Don’t forget to look up possible coupons on sites like Groupon and to check for possible deals the restaurants may offer at certain times of the day, or on specific days of the week.

  1. Pack snacks and drinks

Those frequent rest stops to grab a bag of chips, some beef jerky and a cold drink to keep you going can eat up more of your vacation budget than you may realize. A little pre-planning, though, can go a long way. Stock up on non-perishable snacks like granola bars, trail mix, crackers and dried fruit for on-the-go snacking that’ll last throughout your vacation. You can also buy your beverages now and stick them in an ice-filled cooler for a chilled drink whenever you’d like it while you’re on vacation. Buying these items in your own town instead of on the road is more convenient and will cost significantly less money for the same exact products. That’s called planning ahead!

  1. Cook while on vacation

If you’ll be staying at your vacation destination for a while and/or if the area only has expensive eateries, consider booking a rental or apartment that comes equipped with kitchen facilities. During your trip, pick up fresh ingredients at local grocery stores or farmers’ markets and whip up your favorite dishes. If the thought of cooking while vacationing makes you rethink the entire trip, you can also prep several meals at home and just reheat them while on vacation. This option is particularly beneficial for families or larger groups, as it reduces the need for dining out every day.

  1. Explore the local street food

Get a real feel for the place you’re visiting and save on food costs by taking advantage of the nearby street food options. These tend to be a lot cheaper than dine-in eateries, and usually feature local cuisine that’s made fresh while you wait. You can enjoy iconic soft pretzels in New York City, sizzling hot gyros on the streets of Athens, authentic tacos in Cancun, fresh croissants in Paris and so much more!

  1. Share meals 

When you dine out during your vacation, consider sharing meals with your travel companions. Sharing will allow you to sample a variety of dishes while reducing individual costs. Don’t hesitate to ask the waiter for portion sizes or recommendations for sharing options.

  1. BYOB 

Alcoholic drinks can be the biggest expense of a restaurant meal. Check local regulations and policies, but if allowed, bring your own bottle of wine or other beverages to restaurants that offer corkage fees. This way, you can enjoy your favorite drinks without the hefty markup on alcohol prices. 

Food costs don’t have to eat away at your vacation budget. Use the tips outlined here to save on food costs while on vacation. 

TikTok Inspo: What’s your vacation food cost hack? Tell us all about it in a short video.

Supercharge Your Savings: End-of-Summer Saving Tips

by Advantage One, posted in Announcements, Budgeting, Lifestyle, Saving, Tips & Best Practices

As summer slowly starts winding down, it’s a great time to reflect on your financial goals and implement strategies to boost your savings. Whether you’re saving for a vacation, preparing for upcoming expenses or building a nest egg, implementing smart strategies before summer fades away can set you up for financial success. Let’s take a look at some end-of-summer saving tips to help you supercharge your savings.

Review and adjust your budget 

Take a close look at your budget and assess your spending habits. Identify areas where you can cut back or find more affordable alternatives. Consider trimming non-essential expenses, like dining out, unused or unnecessary subscriptions and impulse purchases. Allocate your saved funds toward your short- and long-term savings goals. With the new season approaching, plan your budget accordingly, accounting for upcoming expenses, like cold-weather wardrobe essentials, increased heating costs and school supplies, as necessary. 

Optimize your energy usage

With the weather gradually cooling down, it’s a perfect time to ensure you’re optimizing your energy consumption. Utilize natural light whenever possible, and if you haven’t already done so, make the switch to energy-efficient LED bulbs. Keep the shades drawn during the hottest part of the day and set the thermostat at the highest setting that’s still comfortable. Unplug electronics when not in use to minimize vampire energy usage and consider investing in smart power strips that automatically cut power to idle devices. These small changes can lead to substantial savings on your energy bill, leaving you with extra cash to put into savings.

Take advantage of end-of-season sales

The turn of a season is always rife with big sales and items retailing at bargain prices. If you’ve been eyeing a new set of patio furniture all season, or you’ve been drooling over a new grill, this is the time to make your dreams come true without draining your wallet. As summer takes its final bow, look for discounted warm-weather clothing, outdoor furniture and equipment, gardening tools and more. You can enjoy these steals for the rest of the season and/or put them away for next year. Stocking up on essentials at less cost will free up more of your later cashflow. 

Take a financial fast

Mild-weathered summer is the perfect season for free or low-cost entertainment options. Resolve to keep one weekend, or even longer, completely spend-free. Meals are whatever dishes you can throw together using contents in your fridge, freezer and pantry. Activities can include visiting local parks, hitting a scenic trail or an organized game night with friends. You can also check community calendars for free events, like concerts or outdoor movie screenings. By embracing cost-effective options, you can enjoy the season without compromising on your savings goals.

Automate your savings 

Consider automating your savings to make it super-easy. Set up an automatic monthly transfer from your checking account to a specially designated savings account. This way, a portion of your income will automatically be set aside for savings without any actual effort on your part. If your employer offers direct deposit, split your paycheck so a portion goes directly into your savings account. By automating your savings, you’ll be less tempted to spend that money, and it will steadily grow over time.

Open a Vacation Club Account

The end of summer is a fabulous time to start thinking about next year’s summer getaway. Consider opening a Vacation Club Account at this time. This special savings account enables the account holder to make regular contributions toward a predetermined goal. These accounts are designed to help the account holder save up for vacation expenses. By spreading the cost of a large, seasonal expense throughout the year, you’ll have an easier time saving the full amount by next summer. Also, you likely won’t be able to withdraw your funds until a specific date or sum of money has been reached. This makes it harder to use your vacation funds for another purpose. 

Summer may be fading out, but it’s not too late to boost your savings this time of year. Follow the tips outlined here for end-of-season savings.

The Importance of Saving for a Rainy Day

by Advantage One, posted in Budgeting, Lifestyle, Saving, Tips & Best Practices, Uncategorized

When life is comfortable and things are going well, it’s hard to think about experiencing harder times. But failing to plan for stormier days can have a devastating impact on your financial health. Life is full of surprises, and some of them can be expensive. Whether it’s a medical emergency, job loss, car repairs or any other unforeseen event, having a financial safety net can provide a sense of security and stability. Let’s take a look at why it’s so important to save for rainy days.

Stay out of debt

Did you know that approximately half of Americans do not have more than $400 saved for emergencies? And yet, emergencies do not discriminate –they can, and do, happen to those who are unprepared just as much as to those who are prepared. When life throws an expensive surprise your way, and you don’t have the funds to cover it, you may fall into debt just to get by. You may choose to swipe the plastic, borrow more than you can afford or fall behind on your monthly payments in order to cover the cost of the emergency. 

Unfortunately, this can lead to months, or even years, in debt, as consumer debt tends to have high interest rates and can be difficult to repay. On the flip side, if you had a well-padded emergency fund prepared, you would have the cash you needed to fall back on in case of an emergency. This would help you stay out of the debt cycle and keep you financially fit, no matter what life throws your way.

Be prepared for sudden unemployment

When you live paycheck-to-paycheck, you depend on your job for financial survival. However, unless you are a Justice serving on the Supreme Court, no job is guaranteed to last forever. Your workplace may decide to downsize, close its doors or even to replace you with a bot. Or, you may find yourself unable to work due to personal circumstances. Having an emergency fund in place when you’re gainfully employed can help you stay afloat should you suddenly find yourself unemployed. 

Flexibility and freedom

Saving for a rainy day brings an element of flexibility and freedom to your life. It enables you to pursue new opportunities, take more risks and make major life changes without the constant fear of financial instability. Whether it’s starting a business, furthering your education or taking a sabbatical from work, having this fund will provide the necessary support to explore these possibilities. 

Peace of mind

Financial stress can take a toll on your physical and mental wellbeing. Constantly worrying about money can lead to anxiety, depression, strained relationships and more. Knowing you have an emergency fund built up and on the ready for a rainy day can offer a sense of security and peace of mind. 

Achieve long-term financial goals

Saving for a rainy day is not just about preparing for emergencies; it is also a stepping stone toward achieving long-term financial goals. Whether it’s buying a house, starting a family or planning for retirement, having savings will help you stay on track.

Avoid economic downturns related to market fluctuations

The economy is subject to fluctuations, and financial markets can be volatile. During economic downturns or recessions, people will often face reduced job opportunities, pay cuts or decreased business revenue. However, an emergency fund can make a challenging economic climate easier to navigate. People who’ve saved up money for emergencies will be less reliant on credit cards and loans during these times, thus reducing their vulnerability to economic uncertainties.

If you don’t have a well-padded emergency fund, start building one today! Most experts recommend having three to six months’ worth of living expenses in your emergency fund. Review your monthly expenses to reach this number, and then make a plan for building up your fund until it’s complete. You may want to prioritize your emergency fund over other investments until it’s set up. 

When the sun is shining, it’s hard to believe the rain will come, but no one’s life is all sunshine, all the time. Saving for a rainy day is a crucial part of financial wellness. Start saving today for a more secure and financially fit life. 

TikTok Inspo: What kind of emergency will have you running for your emergency fund? Tell us about it in the comments. 

Travel Hacks 7 of 12-Save on Transportation Costs on Vacation

by Advantage One, posted in Budgeting, Lifestyle, Saving, Tips & Best Practices, Uncategorized

Vacationing with a prepared spending plan on hand is one of the best ways to have your fun, and your financial wellness, too. However, transportation costs can take a big bite out of a vacation budget. The good news is, there are loads of tricks and hacks you can use to bring those costs down. Here’s how to save on transportation costs while on vacation. 

Book early

One of the most effective ways to save on transportation costs is to plan and book your travel arrangements in advance. By doing so, you can take advantage of early bird discounts, promotional fares and special offers. Whether you’re booking flights, train tickets or rental cars, comparing prices and booking ahead of time can significantly reduce your transportation expenses.

Travel offseason

Timing your travel during off-peak seasons can yield substantial savings on transportation costs. Popular tourist destinations often have peak and off-peak seasons based on factors such as weather, holidays and local events. By choosing to travel during less-crowded times, you can take advantage of discounted transportation services.

Take advantage of public transportation

Public transportation can be a cost-effective option when exploring a new city or country. Many destinations offer efficient and affordable public transportation systems such as buses, trains, trams and subways. Research the available public transportation options and consider purchasing daily or weekly passes for unlimited travel within the area. You’ll save loads on your transportation costs and enjoy the unique experience of rubbing shoulders with local residents.

Get moving

Think outside the box and consider exploring your vacation destination on foot or by bicycle. Getting from point A to point B outside the confines of a vehicle will give you a more immersive and intimate travel experience. Many cities have well-planned walking and cycling routes, making it convenient and enjoyable to navigate through popular areas and attractions. You can rent a bike for the duration of your stay, or opt for a daily rental when needed. You can also choose to participate in guided walking tours to save on transportation costs while staying active and getting up-close and personal with the destination.

Share rides and carpool

If you prefer the convenience of private transportation, sharing rides or carpooling can significantly reduce costs. Services like Uber and Lyft often offer shared ride options, allowing you to split the fare with other travelers who are heading in the same direction. You can also link up with fellow travelers through websites and apps dedicated to carpooling, helping to reduce expenses while meeting new people.

Use travel passes

Many destinations offer travel passes or city cards that provide discounted or free access to various modes of transportation, attractions and activities. Research and compare available travel passes at your destination to determine which best aligns with your travel plans. These passes can provide substantial savings, especially if you plan to visit multiple attractions or use public transportation frequently.

Seek out local discounts

Keep an eye out for local discounts and offers that can further reduce your transportation costs. Look for tourist information centers, visitor bureaus or websites that provide information on discounted transportation tickets, car rentals and more. 

Rent smartly

If you do plan to rent a car, be sure to do it right to score the best deal. First, use an app like Hopper or Hipmunk to learn about special deals. Next, choose a smaller car for big savings. Finally, don’t ask for recommendations. The hotel concierge who shares the name of a rental place is likely getting a kickback from the company for every referral, which significantly increases your price.

Don’t let your transportation costs kill your budget! Use the tips outlined here to save big on vacation transportation costs. 

TikTok Inspo: Tell us how you’re going to get around for less while on vacation in a short video. 

The Homebuying Process for First-Time Homebuyers

by Advantage One, posted in Budgeting, Credit, Home Buying, Lifestyle, Loans, Saving, Tips & Best Practices

Buying a home is a long and, sometimes, overwhelming process. That’s especially true for a first-time homebuyer. However, with some self-education, good planning and preparation, the process can be smooth and less stressful. Let’s take a look at the 11 steps of the homebuying process and what to expect along the way.

Step 1: Prepare your finances

Before you begin the homebuying process, ensure you’re financially ready to handle a mortgage. Here are some tips for preparing your finances ahead of the homebuying process:

  • Set a realistic budget. How much house can you actually afford? Before you start your search, take some time to determine how much house debt you can carry. Consider your existing and expected income as well as ongoing expenses. 
  • Boost your credit score. If you’re thinking of buying a home within the next year, take steps now to bring your score up. Make full and on-time payments, avoid opening too many new credit cards and keep your credit utilization low. You’ll also want to check your score before applying for a home loan to ensure you’ll qualify for a mortgage. 
  • Save for a down payment. If you haven’t already done so, start saving for a down payment now. 

Once you have your finances worked out, you can start shopping for a mortgage.

Step 2: Choose a lender

When choosing a lender for your mortgage, you can decide to use your current bank or credit union, another financial institution or to utilize the services of a private lender. 

When researching potential lenders, look up online ratings and reviews. Also, look for lenders that offer excellent service experiences, reasonable closing costs and fees, transparency about the loan process and favorable loan rates. Don’t be afraid to ask potential lenders all your questions; they should be more than willing to provide you with answers. 

Step 3: Get preapproved for a mortgage

Once you’ve chosen your mortgage lender, you can apply for a preapproval on your loan. Getting preapproved for a mortgage before you start your search will make the homebuying process easier. It will also help ensure you keep your search within your budget.

Depending on your lender, the preapproval process can take several months, or just a few days. The lender will ask for your financial history and other personal information. If you have a co-borrower, the lender will need this information about them as well. If the information you provide is satisfactory, as is your credit report, the lender will begin constructing the details of your loan.

When they have determined how large a loan you are eligible for, they will grant you a preapproval letter. This letter can be a good bargaining chip if you find yourself competing against another borrower for the same property.

Step 4: Find a real estate agent

A real estate agent can help you find the perfect home that fits your budget and preferences. They have access to a broad range of homes on the market and can negotiate on your behalf.

Step 5: Find your dream home 

Once you have a pre-approval and a real estate agent, it’s time to start shopping for homes. Here are some tips to keep in mind as you look for your dream house: 

  • Know what you want. Make a list of your must-haves before you start house-hunting. Is a large backyard a deal-breaker for you? Do you need a specific number of bedrooms? Knowing what you want will help you narrow down your options.
  • Be prepared to negotiate. The seller may counter your offer, so be prepared to negotiate on the price. Your real estate agent can advise you on the best course of action.
  • Beware of red flags. Inspect a home thoroughly before considering it for a purchase. Look for structural issues, like doors that don’t close, cracks in the foundation and sagging ceilings as well as the presence of mold and unexplained smells. 

Step 6: Make an offer

Once you’ve found the home you want to buy, you can put down an offer. If your offer is accepted, the deal will officially be “under contract”. This means you’ve made an offer on a home which the seller has accepted, but there are a number of contingencies that must be addressed before the sale is finalized. At this point, you’ll likely need to pay “earnest money,” or a portion of the down payment. 

Home sales are typically under contract for 4-8 weeks, though this can vary with each lender and sale. You won’t be sitting around waiting for the closing, as you’ll need to complete steps 7-10 at this time. 

Step 7: Get your mortgage

As soon as your offer has been accepted, your mortgage lender will get to work on the details of your loan. If you’ve gotten a preapproval, you should have most of this ironed out already, though the final number-crunching will depend on the loan amount, the property value, the type of mortgage you choose and the size of your down payment. Throughout this time, you’ll need to provide your lender with various financial documents and sign a host of documents as well.

Step 8: Schedule a home inspection 

Hire a professional home inspector to thoroughly check out the home. This will reveal any issues with the home that you may not have noticed. If the inspection uncovers any major issues, you can choose to walk away from the deal, or to negotiate with the seller for a lower price.

Step 9: Obtain homeowner’s insurance

Homeowner’s insurance is necessary to protect your investment. Shop around for the best rates and coverage and make sure you have a policy in place before the closing date. 

Step 10: Schedule an appraisal

The home appraisal, which determines the actual value of the home, assures the lender they are not lending you more money than the home is worth. Your lender will likely choose the appraiser, though the homebuyer usually pays for and schedules it. 

Step 11: Close and move in

Congrats – you’ve made it! You’re ready for the closing, which is when the property will change hands. Be sure to set aside several hours for the closing and to come prepared with all the funds you need to cover the remainder of the downpayment and all closing costs and fees. 

Once you’ve closed, the home is yours. All that’s left to do now is to pack up and move in. Best of luck in your new home sweet home!

TikTok Inspo: Are you selling a home? Convince prospective buyers in a 15-second video that yours is the one they need.

How Much Business Debt is Too Much?

by Advantage One, posted in Budgeting, Career, Lifestyle, Saving, Tips & Best Practices, Uncategorized

Small businesses routinely require additional capital. Funds may be needed for covering everyday operations during a slow season, or to pay for the company’s growth and expansion. Often, small businesses will take out a loan to procure these necessary funds. However, while debt can be a useful tool for growth and investment, excessive debt can lead to financial distress and, ultimately, the demise of the business. There’s no one-size-fits-all answer for how much business debt is too much, but these factors can help you determine whether your business has too much debt and whether it can take on any more.

Debt-to-equity ratio

The debt-to-equity ratio measures the proportion of a company’s financing that comes from debt compared to its equity. A higher ratio indicates a greater reliance on debt and higher potential financial risk. A healthy debt-to-equity ratio varies across industries, but as a general rule of thumb, a ratio above 2:1 is considered excessive debt.

Debt service coverage ratio (DSCR)

The DSCR measures a company’s ability to cover its debt obligations with its operating income. It provides insight into whether the business generates enough cash flow to service its debt. A DSCR below one suggests that the business may struggle to meet its debt payments, indicating that the debt level may be too high.

Cash flow

It’s important to analyze your company’s cash flow when assessing debt levels. Negative or inconsistent cash flow can be a warning sign, as it may indicate the business is struggling to generate enough revenue to cover expenses, including debt payments. Insufficient cash flow can quickly lead to financial distress when carrying a substantial debt burden.

Industry standards and benchmarks

Comparing your business’s debt levels to industry standards and benchmarks can provide valuable insights. Some industries require business owners to take on more debt, and comparing your own debt to industry-specific ratios and averages can help determine if the company’s debt is within reasonable limits or if it exceeds industry norms, potentially indicating an elevated risk.

Growth opportunities and investment needs

Consider your company’s growth prospects and investment requirements. Debt can be a reasonable option to finance expansion or capital investments, but it should be balanced against the expected return on investment. If the debt level becomes excessive relative to growth potential, it may hinder future profitability and financial stability.

Risk tolerance

Every business has a unique risk tolerance based on factors such as industry dynamics, market conditions and the management’s risk appetite. A company with low risk tolerance should aim for lower debt levels to ensure greater stability, while a company with higher risk tolerance might be more comfortable carrying a higher debt burden.

Future outlook

Consider the overall economic climate and the business’s long-term prospects when considering its debt. If economic indicators suggest a potential downturn, it may be best to reduce debt levels to increase financial flexibility and mitigate the risks associated with economic uncertainties.

If you’re still unsure whether your business has too much debt or if it can handle more, consult a professional, such as an accountant or business consultant. 

Debt is often a necessary part of owning a business, but too much debt can be harmful for a business. Use this guide to determine how much business debt is too much. 

TikTok Inspo: How are you using a business loan? Tell us all about it in a short video. 

What Do I Need to Know About the Current State of the Economy?

by Advantage One, posted in Budgeting, Lifestyle, News & Events, Saving, security, Tips & Best Practices, Uncategorized

Q: I find the financial news to be confusing despite my efforts to keep up with developments and trends in the economy. What do I need to know about the current state of the economy and how can I learn to read the financial news? 

A: Kudos to you for taking the initiative to learn all you can about how the economy impacts your money and livelihood! Indeed, financial news can be confusing. One day the economy is headed for a deep recession, or worse. But the next day’s headlines will boast about rising stocks and a climbing dollar. It’s hard to make sense of it all and to sift through the noise and find what’s relevant to your life. Here, we’ve outlined the factors you need to know about today’s economy and provide a primer on how to read the financial news. 

Which factors characterize the economy now? 

While your grocery bills may have you thinking otherwise, there’s actually good news on the economic front … right now, at least. The consumer price index (CPI), which tracks the cost of household staples, rose 4.9% in April, 2023. It’s the smallest increase in two years. The inflation readings of the U.S. Bureau of Labor Statistics report weakening inflation readings for 10 consecutive months since its peak in June of 2022. This means consumers should be seeing relief in staple categories like food, energy and housing. 

However, the state of the economy is measured by more factors than the inflation rate alone. Consumer spending, for example, has weakened in recent months following a spike in January. Additionally, the U.S. Gross Domestic Product (GDP), rose at an annual rate of 1.1% in the first quarter of 2023, falling short of the 1.9% that economists had expected. It’s also important to note that the average interest rate now averages 5-5.25%, which is its highest level since 2007. On the flip side, though, new home sales rose in March for the fourth consecutive month.

While the economy has definitely seen better days, all is not doom and gloom on the financial front. Inflation is easing and there is hope for more good news in the coming months and years. As a consumer, look out for fluctuating interest rates and a decreasing rate of inflation. While these factors may influence your spending, it’s important to practice responsible money management in any economic climate. 

How to read the news

Follow these tips to make sense of the financial news:

  • Be prepared to read news items you’ll disagree with. The internet is bloated with content, and you can find articles, memes and videos on nearly any opinion in the  world. This makes web surfers vulnerable to confirmation bias, in which their browser continuously spits out blogs that confirm their already-established opinion. This can be particularly dangerous as you may mistakenly believe your own opinion to be fact. This is why it’s a good idea to open your mind a bit and read some articles where you don’t agree with the opinion.
  • Read both professional and amateur content. The articles you’ll read at The Wall Street Journal and The New York Times may have more reputable sources than your average basement blogger, but they’re also written with deadlines and the company’s quarterly earnings in mind. Be wary of clickbait and of doomsday headlines that have little basis in reality. Amateur writing, though it may be less-sourced, will likely be less biased and dramatic.
  • Remember that not every news story is actionable. You may read dozens of articles on the economy each week, but few, if any, require you to take action. Ignore most of what you read about the stock market because it’s usually best to keep your investments in place for years to achieve optimal growth. You also don’t need to take any action when reading about inflation highs and lows, the GDP or most other financial news items. Read these articles for the purpose of broadening your understanding and knowledge of the state of the economy.

Financial news can be confusing. Use this guide to learn what you need to know about the current state of the economy and how to read financial news. 

Can a Budget Wedding be Beautiful?

by Advantage One, posted in Budgeting, Lifestyle, Saving, Tips & Best Practices, Uncategorized

Q: My partner and I are preparing for our wedding, and due to financial constraints it will need to be planned on a strict budget. I’m glad we aren’t racking up huge bills, but I don’t want to compromise on the day of my dreams. Can a budget wedding still be beautiful?

A: Your desire for financial responsibility is commendable. Fortunately, a budget wedding can still be beautiful – even on a tight budget. Here’s how to plan the wedding of your dreams without breaking your budget.

Set a budget

The first step in planning a wedding on a budget is to actually set a budget. Determine how much money you can afford, and are willing to spend, on your wedding and allocate your funds accordingly. Jot down a list of all the wedding expenses you expect to incur, such as venue rental, catering, photography and decorations. Then, prioritize them based on their importance, attaching a higher dollar amount toward your top priorities.

When setting your budget, be realistic about what you can afford. Don’t take on more debt than you can handle, as it can put a strain on your relationship in the long run. Consider cutting back in areas that aren’t as important to you. This might include having a smaller guest list or opting for a simpler, or secondhand, dress. On the flip side, remember that your budget does not need to be evenly balanced as long as the total does not exceed your maximum budget. For example, you can decide to spend a lot of your wedding money on an elaborate dessert table, and hire a no-frills caterer for the rest of the meal. 

Remember, a budget is an opportunity to get creative. Together with your partner, you can find unique ways to make your wedding special without spending a fortune.

Choose a venue

One of the biggest expenses of a wedding is the venue rental. The good news is, an out-of-the-box venue can save you boatloads of money without sacrificing on style and beauty. Consider having your wedding in a park or on a beach; many public spaces offer affordable or even free venue rentals. Alternatively, if you’re set on having a traditional venue, look for off-peak times or consider a weekday wedding, as these can often be more affordable.

Another option for saving on the venue is to have your ceremony and reception in the same location. This can save on transportation costs and can be more convenient for your guests, too. Look for venues that offer both indoor and outdoor spaces so you have a built-in backup plan in case of inclement weather.

When choosing a venue, be sure to keep your overall wedding theme in mind. For example, if you’re going for a rustic feel, look for venues with natural elements like wood and stone. If you’re going for a more modern look, go for venues with clean lines and minimal decor. The venue sets the tone for your entire wedding, so it’s important to choose one that reflects your personal style.

DIY Decorations

Another big-ticket item likely to be on your wedding budget is the decor. To save in this area, consider DIYing some, or all, of your wedding decorations. You can look up tutorials online to learn how to do a job that will bring professional results, and with the help of a few friends, and a minimal investment in materials, you can create beautiful, low-cost decorations for your wedding. This can include centerpieces, floral arrangements, favors and more. 

Another way to save on wedding decor is to repurpose items you already own. Mason jars, vintage books, old picture frames and unique vases can all serve as decor elements for your wedding. You can pick up more low-cost decor items in secondhand shops or borrow from friends. 

Finally, consider renting decorations instead of buying them. Many rental companies offer affordable options for wedding decor, such as tablecloths, chair covers and ceremony arches. This can shave lots of money off your budget wedding while also reducing waste.

A beautiful budget wedding is more doable than you may think. Follow these tips to plan the budget wedding of your dreams.

TikTok Inspo: Did you plan a budget wedding? Tell us about it in the comments.