Beware of Digital Kidnapping

Most parents warn their kids against taking candy or accepting a ride from a stranger, but there’s a digital equivalent to conventional kidnapping that is unknown to many people. Digital kidnapping happens when a crook takes control of a target’s social media profiles and holds them until a ransom is paid. It can also involve “kidnapping” photos that are posted on social media pages. Here’s what you need to know about digital kidnapping and how to protect yourself from falling victim. 

How the scams play out

In a digital kidnapping scam, a hacker or ring of scammers will take control of one or more of a target’s social media profiles. The target will be effectively locked out of their own social media accounts and will be unable to access or update them. Once the scammer has control of the profile, they’ll contact the target, demanding a hefty ransom in return for access to the account. They may even threaten to post damaging or humiliating content on the social media profile unless the ransom is paid.

In another version of this scam, hackers will “kidnap” a photo of a child or baby off an unsecured social media account. They will post these photos in their own accounts, using the picture-perfect moments to create a fantasy world of their own. In a creepy twist of reality, they’ll pretend these are snapshots of their own family. They may use this fake world to help them create an imaginary escape, or to draw traffic to their own public accounts. Sometimes, they’ll utilize these photos to help build a bogus story, such as a baby being put up for adoption, or a charitable fund to benefit a child whose parents are struggling financially. Unfortunately for the actual parents, it can be months or years before they find out that their child’s picture is splashed across a public account with thousands of followers. 

If you’ve been targeted

If you believe you’ve been targeted by a digital kidnapping scam, there are steps you can take to mitigate the damage. First, alert the company that owns the social media platform to let them know your account has been compromised. They’ll likely have specific instructions for you to follow to ensure your account remains safe. They may even advise you to close the compromised account and open a new one. Next, tip off the Federal Trade Commission (FTC) and local law enforcement agencies which can help you determine whether it makes sense to pay the requested ransom. Finally, clean up your accounts and make sure there is no identifying or potentially dangerous information being posted on a public forum.

Protect yourself

The best way to protect yourself from digital kidnapping is by keeping your accounts private and secure. Always choose the strongest security settings on your devices and opt for private social media accounts across every platform. This will limit your audience to by-invitation-only viewers while helping to keep hackers and creeps away. 

It’s also a good idea to be mindful of what you post, and how often you post it. Even when using the strongest security settings, sharing a picture online essentially means sharing it with the public. You never know who may be trolling your accounts or looking for pictures to “adopt” as their own. Think three times before posting a picture of your kids. Extra caution is advised for those with super-cute kids.

Finally, be sure to follow basic online safety rules to avoid giving a scammer access to your accounts. Use strong, unique passwords for each of your online accounts and change up your passwords every six months or so. Avoid using public WiFi unless absolutely necessary. Accept every security and software update offered for your device to keep them operating at optimal security. Finally, avoid sharing sensitive information with an unverified contact and never download an attachment or click on a link within an email from an unknown sender. 

Stay alert and stay safe!

Your Turn: Do you have a digital kidnapping experience to share? Tell us about it in the comments.

Financial Lessons You Can Learn from Fantasy Football

As summer winds down with autumn creeping closer, it’s time to start thinking fantasy football! Drafting the best team and guiding them toward the championship takes knowledge, dedication, skill and real talent. Do you have what it takes to be a fantasy football champ?

Whether you do or do not, know that fantasy football is so much more than just a super-absorbing hobby. You can actually learn a lot about money management and growing your wealth from the game. Here are five financial lessons you can learn from fantasy football.

  1. Do your research

Every fantasy football aficionado can tell you that your team’s performance throughout the year significantly depends on that one day (typically) in August: Draft Day. Knowing which NFL players to “draft” to your team is crucial to its success. If you sail into this uber-important day unprepared, you’re essentially setting yourself up for failure. Instead, in the weeks leading up to draft day, the true fantasy football pro knows to listen to podcasts from training camps, research potential trades and learn about past performances of various players. Come prepared for draft day and you will make better decisions. 

In personal finance, the rules are similar. When choosing a place or company to “draft” for sinking your money into, you’ll want to do as much research as possible and ask lots of questions: Is this investment secure? Is this company projected to experience growth over the next few years and beyond? What kind of annual gains can I expect to see from this stock? What values drive this company’s culture? Find out as much as you can about any potential investment before forking over your money.

  1. Diversify

In fantasy football, it’s important to diversify your team and to draft players who excel at various positions in real life to ensure the most wins. In finance, diversification is even more important. You’ll want to spread your investments over a mix of whole-market funds, securities and savings accounts. The more exposure your portfolio has among various asset classes and markets, the more protection it has against market volatility and inflation.

  1. Keep your investments private

To a true fantasy football manager, there’s no conversation topic as exciting as the team they’ve drafted and the wins they’ve scored. But to the uninitiated, there’s no conversation topic that can put them to sleep faster than your fantasy football league. Find like-minded fans to talk shop with, but otherwise, you’re best off keeping your observations and insight on the game to yourself.

Investments are similar. You don’t want to be the drag of the party, the office or the block. Talk about your stock performance with your partner, your financial advisor and maybe your mother. Otherwise, keep it to yourself.

4.   Don’t let personal biases impact your investments

It’s hard to leave your personal feelings and opinions behind when drafting players for your fantasy football team. You might want to pick your favorite quarterback, even though there may be one that’s more likely to put up massive stats available to draft. Or maybe you’ll plan to pick players from your favorite team, no matter what they are likely to produce during the season. Or maybe you’ll pass on a top-tier player simply because he’s on the rival team of your favorite. However, the real fantasy football pro knows to ignore personal biases like these and to focus on the skill of each individual player when drafting your roster. 

This rule parallels perfectly in the world of investing. Investors sometimes let their own biases get in the way of making sound financial decisions. For example, they may choose to keep their money in a stock that’s performing poorly because they’ve always loved the company. Or, they may feel personally invested in a stock they’ve purchased, but have a hard time letting go when it is clearly time to sell. To be a successful investor, it’s crucial to leave all personal biases behind when making decisions. 

  1. Assess your financial health throughout the year

While the decisions you make on draft day will have the biggest impact on your team’s performance throughout the season, the fantasy football pro knows how important it is to continuously monitor the performance of each player in real life. There will always be players who get injured, teams that change their strategies or don’t use your chosen player much and players who simply have unproductive seasons. You’ll need to keep an eye on what’s happening so you can make the best decisions regarding potential players on the waiver wire (players who are not on anyone’s team and generally available for any team to add) going forward. 

Financial health is never a set-it-and-forget-it affair. To achieve and maintain true financial wellness, you’ll need to monitor your budget, savings, spending habits and more throughout the year. It’s not enough to give your financial wellness a check-up at year’s end; review and assess your money management every few weeks for the best results. 

Fantasy football–it’s so much more than an addictive hobby! Fantasy football can teach you financial lessons for life. 

Your Turn: Which financial lessons have you learned from fantasy football? Share them with us in the comments.

Buy This, Not That: How to Spend Your Way to Wealth and Freedom

Title: Buy This, Not That: How to Spend Your Way to Wealth and Freedom 

Author: Sam Dogen

Hardcover: 336 pages

Publisher: Portfolio

Publishing date: July 19, 2022

Who is this book for? 

  • Financial Samurai fans looking to learn more.
  • Readers of average economic status who want to learn how to build wealth and achieve financial freedom.

What’s inside this book?

  • The Financial Samurai’s unique approach to money management, which has been absorbed by an audience of 90 million over the past 13 years.
  • The Financial Samurai’s innovative 70/30 framework for optimal financial decision-making.

4 lessons you’ll learn from this book:  

  1. How to tell the difference between good debt and bad debt.
  2. The best way to invest on your own terms.
  3. How to create your own rules for spending.
  4. How to take the guesswork out of financial planning.

4 questions this book will answer for you:  

  1. Can I invest in real estate if I can’t afford to buy property?
  2. How can I build passive income streams that work with my goals and risk tolerance?
  3. What’s the best way to pay down debt?
  4. How do I optimize every dollar I earn so I can maximize my wealth?

What people are saying about this book: 

“Financial Samurai and this book have prepared me for life after basketball! A straightforward guide to live a balanced, financially free life. – Shaun Livingston

“A no-nonsense guide to living your best life now while also ensuring a financially independent future.” – Emily Chang

“A one-of-a-kind book! Bold advice from someone who’s not just done the math, he’s lived it. A must read!” – Kumiko Love

“Step-by-step, chapter-by-chapter, Sam shows how to make optimal money choices that focus on wealth building—not just saving for saving’s sake, but for living life on your terms.” – David Mcknight

Your Turn: What did you think of Buy This Not That? Share your opinion in the comments. 

Cash, Credit or Debit–How Should I Pay?

Q: With inflation soaring, I want to spend my money in the best way possible. When paying for various everyday and occasional purchases, should I be using cash, credit or debit?

A: There’s a time and place for everything. Some purchases should be paid for with cash, some with a credit card, and others with a debit card. Your lifestyle and personality may influence this choice as well. Let’s take a closer look at each payment method and when they should be used.

When should I use cash?

Between P2P payment platforms, mobile payment wallets and the growth of cryptocurrency, the world of commerce is becoming increasingly cashless. In fact, some consumers barely touch cash at all. 

However, there can be times when you’d be better off using cash. First, some gas stations charge less per gallon when the driver pays in cash. The difference is usually modest, up to 10 cents a gallon, but with gas prices soaring, it can add up to substantial savings over the course of a month. Next, if you have trouble sticking to your budget when you shop, it can be helpful to take only the amount of cash you need and leave your cards at home. This way, you’ll be forced to stick to your budget. Finally, some small businesses, like food trucks or independently owned stores, only accept cash payments or offer discounts for paying cash.

On the flip side, there are many disadvantages to using cash. First, cash provides no purchase protection. Consequently, it’s best not to use cash for very large purchases. Next, cash leaves no paper trail and it can make tracking expenses difficult. It’s best not to use cash if you’re trying to get a clear picture of where your money is going. Finally, cash always carries the risk of being lost or stolen. 

When should I use my credit card?

Credit cards are the double-edged sword of personal finance. On the one hand, credit card debt is one of the leading causes of consumer debt in the country. On the other hand, owning credit cards and using them responsibly is a crucial part of one’s financial health. 

In addition to the impact to your credit score, responsibly used credit cards offer two primary advantages: rewards and purchase protection. Using a rewards card for purchases you’d need to make anyway, such as paying utility bills or subscription fees for a service, can help you earn cash back, airline miles or another reward. The second big advantage to using a credit card – the purchase protection it offers – makes it the ideal choice for paying for large purchases or when buying something from a newer retailer. Knowing you can always dispute the charge or even cancel it if the product turns out to be different than expected, can help you shop with confidence. In addition to these advantages, paying with a credit card and making on-time payments can help boost your credit score while making expense tracking easy. 

Ideally, credit cards should only be used to cover fixed or steady payments, such as monthly bills, and for purchases you know you can pay for in full when the bill becomes due. It’s never a good idea to swipe your card for a purchase you cannot pay for today or within the next few weeks. Use your cards responsibly to ensure a healthy credit score and to stay out of debt. 

When should I use my debit card?

In many ways, debit cards offer the best of both worlds. You can always track your spending by reviewing your checking account statement, and you generally can only spend what you have. This helps minimize the risk of falling into debt. In addition, if your card is lost or stolen, you can cancel it and/or close the associated account. 

Debit cards can be a great choice for everyday purchases of any kind. However, since they  typically don’t offer rewards or the same level of purchase protection as credit cards, they may not be the best choice for large purchases, or for paying for products from a new retailer. 

Life is expensive, and you want your money to go as far as possible. Use this guide to help you choose the right payment method in every situation. 

Your Turn: When do you use cash, credit and debit? Tell us about it in the comments. 

Don’t Forget to Follow Up on Your Home Inspection!

If you’re under contract for a new home, you’ve likely had an inspection conducted on your new home. This inspection is an important part of the home-buying process, and is generally required by the mortgage company. It can help you find any major defects in the home, such as a faulty roof or dying HVAC system, which may prompt you to walk away from the deal. Alternatively, the seller can choose to repair any areas needing major work before the closing. 

In addition, a home inspection often reveals other, smaller recommendations the seller is not required to fix. This can include a long list of items that need minor repairs or replacements, such as a leaky faucet, overstuffed gutter, or an insecure stair railing. Often, in the rush to close on the home and all the tasks that must be tended to before the big move, these repairs are forgotten about and never get fixed. 

Some homeowners mistakenly assume that it’s no big deal to leave some repairs on their newly purchased home unfixed. Unfortunately, though, nothing will fix itself. Instead, the longer you wait to make a repair, the more likely it is that you will need to make more extensive and expensive repairs or replace the faulty system, appliance or part. Consequently, it’s best to make any necessary repairs on your home as quickly as possible. 

Here’s what you need to know about following up on a home inspection.

Hold onto the list of recommendations

Most inspectors will leave the potential buyer with a list of items that need repairs. While some will require urgent attention, the less-important items on the list can be forgotten about and never tended to at all. You may not have the time or resources to fix everything on the inspector’s list before you move, but it’s a good idea to hold onto that list for future reference. File the list in a safe place so it won’t get lost during the move. You can also snap a photo and upload it to a digital storage space so you can always find it if the original document is misplaced. 

Categorize repairs according to urgency

Once the dust has settled after your move and you’re ready to tackle the household repairs you haven’t yet gotten to, dig out your list and categorize repairs by urgency. Look for repairs that can cause extensive damage if left unfixed, such as a leaky pipe, faulty exterior drainage or the presence of mold or mildew. These should be tended to as soon as possible. Cosmetic repairs, on the other hand, can be delayed without major consequences. Create a new list with all the repairs written in order from most to least urgent. 

Identify what you can do on your own

It’s almost always cheaper to do home repair projects on your own. However, there are some areas that are best left to the experts. In addition, if you will need to spend a lot of money on supplies you will use just for this one-time repair, it can actually be cheaper to call in the experts. Keeping these two factors in mind, look through your list carefully to see what you can realistically do yourself.

Start working through your list

Now that you’ve sorted your list according to urgency and you’ve identified which repairs you can do on your own, you’re ready to start tackling the repairs. Start with the most urgent repairs, and set aside time on weekends for the repairs you plan to do on your own. When hiring professionals, be sure to do your research carefully and to ask for references of past clients. 

Uphold general household maintenance

It may be a while before your entire list of repairs is complete. To help prevent further damage, and to keep your home in the best condition at all times, follow these tips for general upkeep and maintenance:

  • Make sure faucets and showerheads are completely turned off when not in use.
  • Keep the air clean by vacuuming and dusting regularly.
  • Look for discolored spots on ceilings and walls, which can indicate an internal leak.
  • Keep your home heated in very cold weather, even when you’re not home, to prevent freezing pipes. 
  • Drain your outdoor sprinklers completely before turning off for the winter.
  • Keep all trees and shrubs near your home well-trimmed. 
  • Control moisture levels with a dehumidifier or humidifier, as necessary.
  • Clean your dryer vent and all heating vents regularly.

A home inspection is an important part of the home-buying process. Don’t forget to follow up on the list of recommended repairs!

Your Turn: Have you followed up on your home inspection recommendations? Tell us about it in the comments.

What to Buy and What to Skip in September

Get ready for savings on big-ticket items this month! Retailers are looking to bring the crowds back after the big back-to-school storm has passed, and bargain prices are always a great way to attract shoppers. They also need to clear shelves before the holiday season blows in with its shopping frenzy. Add in the Labor Day sales that kick off the month, and it means big savings during September – but not on everything. Here’s what to buy and what to skip in September. 

Buy: Mattresses and bedding

Mattress sales practically give Labor Day its awesome name, and for good reason. You can find crazy-deep discounts on mattresses this month at almost any retailer that sells them. Top off the deal with some bedding and bath supplies, which are also selling at bargain prices. Be sure to start comparison-shopping at least a week or two before Labor Day to snag the best deal. After all, if you snooze, you lose. 

Skip: Halloween costumes and decor

Retailers might have you thinking Halloween is tomorrow, but you still have plenty of time to prep for Oct. 31. Though Halloween costumes and decor will hit the stores this month, it’s best to hold off on these purchases until October rolls around, as that’s the earliest you’ll start seeing scary-low discounts. 

Buy: Airfare

Since the days are getting shorter, it’s time to think winter! The holidays will be here before you can blink, and if you’re looking to grab airline tickets at a great price, you may want to shop for them now. The best deals on plane tickets usually show up eight weeks before the travel date, and for Thanksgiving, that means you’ll need to buy tickets in September. Look out for deals on tickets at the end of the month to save big on your travel plans. 

Skip: Autumn wear

It’s too early in the season for slashed prices on clothing. Pick up some essentials if you must, but you’re best off waiting until October or November to shop for your complete autumn wardrobe at sizzling-hot prices.

Buy: Plants

Hold onto summer a little bit longer with some vibrant greenery. All summer plants, trees and shrubs will be retailing at dirt-cheap prices this month as garden centers make room for autumn and holiday plants. This can be a terrific time to upgrade your property’s landscaping with some well-placed perennials. You can also find some fabulous deals on summer flowers, though you may not have much time left to enjoy them.

Skip: Electronics

Labor Day might bring some incredible deals on big-ticket items, but electronics aren’t among them. Instead, TVs, headphones, audio systems and more tend to see their lowest prices during Black Friday sale events. Wait just a little bit longer and you can snag a fantastic deal on an electronic item you’ve been eyeing for months. 

Buy: Denim

Jeans are a hot item during back-to-school shopping. Come September, retailers will slash prices to unload their unsold inventory. Cash in on a great deal by shopping these sales for a new pair of denim jeans this month. 

Buy: Beauty and skincare products 

Early autumn is a great time to stock up on beauty and skincare products. As college students pack up to head back to the dorm and consumers pick up skincare routines, prices may have dropped over the summer. Look for price cuts on products like shampoo, body wash, moisturizer and all kinds of cosmetics from Labor Day and on. 

It’s back to school, back to work and back to savings this month! Use this guide to know what to buy and what to skip in September. 

Your Turn: Have you picked up any great bargains in September? Tell us about them in the comments. 

6 Ways to Pay Less at the Pump

Just when you think they can’t possibly jump any higher, gas prices start rising again. They’ve long passed the $5 mark in much of the country, and in some areas they’ve even gone beyond $6 a gallon. This means it’ll cost the average American close to $100 just to fill a 16-gallon tank. With prices peaking on so many other goods, the pain at the pump is real.

There isn’t much you can do about the cost of gas, but there are ways you can pay less at the pump. Here are six ways to save on the cost of gasoline.

  1. Use cash

Lots of gas stations offer a discount for cash payments, sometimes up to $0.20 per gallon. This can quickly add up when pumping a full tank. Just be careful to have the cash handy when you need it, as you don’t want to lose all those savings to ATM fees when using machines that are not connected to your credit union.

  1. Use a rewards program or credit card

If you don’t like the idea of carrying around a lot of cash, but you still want to save at the pump, consider signing up for a rewards program or credit card. Tread carefully, though; not all of these programs actually benefit the consumer. Ask these questions about any rewards program or credit card you’re considering before signing up:

  • Is there an annual fee? An annual fee can easily offset any savings you might incur from rewards.  
  • Is there a cap on rewards? Some programs limit the amount of rewards that can be accrued per quarter or year. If the cap is not sufficient for your needs, the program might not be for you.
  • What is the redemption value for each reward point? Actual rewards can vary tremendously by program. Be sure to find out exactly how much a rewards point is worth  to see if it’s actually a good deal.
  • Is this card only good for purchasing gas? Some rewards cards allow you to rack up points with any purchase at a gas station, while others are strictly for fuel only.
  • What are the membership requirements for this rewards card? Make sure the requirements aren’t so rigid or restrictive that you can’t earn enough points to make it worthwhile.

In addition, consider your personal track record with credit cards before signing up for a gas rewards credit card. If you already find it challenging to pay off your balance in full each month, it may not be the best idea to open another credit card. 

3. Check your tire pressure

According to the US Department of Energy, a  well-inflated tire can save you $0.15/gallon by boosting your gas mileage by 3%. Check your tires regularly to ensure they’re always inflated. To make this easier, consider springing for a tire pressure gauge that will automatically monitor the health of your tires.

  1. Use a gas-tracking app

In 2022, there’s no need to search for the gas station offering the best-priced gas. There’s an app for that! Popular gas-tracking apps include GasBuddy, Upside and Waze. Using the gas station conveniently located right near your home or workplace might be easier, but taking the extra time to find one that sells fuel for less can save you a bundle.

  1. Purchase a club membership

If you don’t already have one, this may be the time to buy a club membership. Costo, Sam’s Club and Walmart Plus all offer discounted gas exclusively to members. Of the three, Costco tends to feature gas for the lowest price, up to $0.34 less per gallon than a typical gas station. In today’s gas-crazy climate, that’s a huge difference. Of course, you’ll want to find out how much a club membership will cost you before signing up to join any of these or other club stores to ensure it’s worth the price. Also, be prepared for long lines at the club store’s gas station, especially with spiking gas prices. 

  1. Buy gas at the right time of day

Did you know there’s an ideal time of day to fill your tank? And no, we’re not talking about shorter lines, or even the time of day before prices will change yet again. You can get more bang for your buck if you buy your gas in the early morning or late evening hours, when it’s generally cooler out. If you pump gas during the midday hours, after the sun has been beating down on the gas reservoir all day, the gas has likely expanded. This means you’ll be paying the same price for a less-dense gasoline, which will not last as long. Pump when it’s cooler outside for the densest gas.

It’s sticker shock at the pump these days, but there are still some ways you can save on gas costs. Use these tips to get started.

Your Turn: How do you save at the gas pump? Share your best tips and hacks in the comments.

Step 8 of 12 Steps to Financial Wellness-Know When and How to Indulge

[Now that you know how to spend mindfully, pay it forward, and regularly set aside money for savings, you’re ready to learn how to indulge in the occasional expensive treat–responsibly.]

Many people equate financial health with a life of deprivation, but this is far from the truth. In fact, living a life of true financial wellness means being happy with a lifestyle that is within your means, but does not leave you feeling like you are lacking. Like an overly restrictive diet, an overly tight budget is more likely to become broken.

On the flip side, financial wellness means spending your money wisely and learning how to treat yourself for less – or for free. It means money choices are governed by discipline, and not by emotion. And sometimes, it means telling yourself no.

How, then, do you strike a balance between the two?

Here’s how to indulge responsibly. 

Live with a budget

The first step to financial wellness is knowing where your money is going and how much you actually have to spend. The best way to always have this information is to create and stick to a budget. 

[If you’ve been following all the steps to financial wellness until this point, you’ve already developed and live with a budget. So you know how to stick to it. Let’s take a quick review of this crucial money management tool.]

Create your budget by tracking your spending for three months. Make a list of all your expenses, including fixed, non-fixed and discretionary expenses, and list your income in a parallel column. Tally up your totals and assign a realistic dollar amount to each expense. Going forward, be sure to only spend within the allocated amount for each expense category each month. 

Leave room in your budget for “just for fun” purchases

As you work on building and sticking to a budget, be sure to leave room in your spending plan for the occasional treat. The exact amount will vary by income level, lifestyle and personal choice. However, choose an amount you can easily afford without feeling deprived. 

To ensure you don’t overspend in this area, you can borrow an idea from the money-envelope system and withdraw the designated amount from your checking account at the beginning of the month. Place this cash in an envelope, and use it as necessary. When the money is gone, so is your “allowance” for pricey treats this month.

It’s important to note that the indulgences referenced here are spontaneous buys, or small purchases that aren’t part of your normal budget. Large purchases you have planned for and saved toward for months, or even years, are in an entirely different category. 

Review your savings

Before giving yourself permission to indulge, make sure you are setting aside a percentage of your monthly income to savings. Savings should be an item line on your budget, with short-term savings like an emergency fund in a savings account, holding enough to keep you afloat for 3-6 months if you have no source of income. Long-term savings should be sufficient to support your retirement and any long-term savings goal you may have, like saving for a house or a luxury vacation. 

Choose your “treats”

Everyone’s got their personal vices and their guilty indulgences. Take a look at where your non-discretionary money went during the last month or two. Highlight the more expensive impulse buys and hold them up to these questions:

  • Did this purchase bring me happiness or positive energy the day I bought it? Did that feeling last until the next day? The next week?
  • Did this impulse buy blow my budget?
  • Does thinking about this purchase now fill me with joy, guilt or something else?
  • If I found myself in the same circumstances today, would I make that purchase again?

Here, too, the answers to these questions will depend on your personal set of circumstances and lifestyle. Use the insight you’ve learned about your indulgences to help you make better money choices in the future. 

Lose the guilt

Once you’ve decided how much you want to spend each month on indulgences you can afford, it’s time to let go of the guilt. If you’re spending responsibly and you’ve already fed your savings as well as your future, there’s no need to eat yourself up over an impulse buy you could have done without. As long as you’re keeping these just-for-fun purchases within your budget, and your choices fill you with happiness or positive energy, you can still maintain your financial wellness.

Your Turn: How do you indulge responsibly? Share your best tips in the comments.

My House Skyrocketed in Value. Now What?

Q: The value of my house has shot up a lot in recent months. What steps should I take now?

A: The flaming real estate market means homes are rising in value at a meteoric rate. In fact, in some areas of the country, properties have doubled in value over the last two years. Because of this, many homeowners like you may be wondering what, if anything, they can do with this burst of equity. Here, we’ve outlined several financial moves you may want to consider at this time.

  1. Sell

Naturally, the financial move that first comes to mind when homes experience an explosion in equity is to sell the home and pocket the profits. For some people, this can be a great idea, but for others, it can spell financial disaster. 

Here’s what to consider before making this move.

First, it’s important to have a clear picture of your next step after selling your home. Do you plan to buy a new home in the same area as your existing home? If yes, you may want to think twice about selling. If you do choose to go ahead and sell your home, you’ll likely walk away with a tidy sum of money, but you’ll need that money (and maybe more) to purchase your next home, which will also be selling at an exorbitantly high price. 

If, however, you’re looking to downsize and find a smaller and cheaper place to live, this can be a great time to sell your existing home. The market is hot, and you’ll likely get lots of generous offers along with a nice profit from the sale, which can take you far beyond the purchase of your new, smaller home. The same is true if you plan to move from a particularly popular area, such as the suburbs, to a quieter town that is not in such high demand. 

Finally, be sure to get an estimate of the interest rate and payment you’d have on your new mortgage before putting your current home on the market. Rates are rising, and you may end up with a monthly payment that is higher than anticipated. Run the numbers before making a decision so you have a clear idea of what your new mortgage scenario will look like. 

  1. Have your home appraised to remove mortgage insurance

If you put down less than 20% of your home’s value at the time of purchase, you likely pay toward private mortgage insurance, or PMI, each month. These payments are generally set into place until the buyer owns 20% of their home. However, if the home’s value jumped, that time will come sooner than expected. Having your home professionally appraised will tell you if you own 20% of the home’s current value, in which case, you no longer need to pay the PMI. The appraisal will cost several hundred dollars, but this cost will easily be offset by the cancellation of the PMI. 

  1. Reassess your insurance coverage

If you don’t plan on selling your home, and it has significantly increased in value, you may want to review your insurance coverage. Your insurance policy was likely purchased when your home was worth less than it is now, which means it will not cover the current value of your home. Review your policy and consider increasing your coverage to avoid being left with insufficient coverage in case of catastrophe. 

4.  Take equity out

Thousands of homeowners are taking advantage of the increased equity in their homes through one of two means: a Home Equity Line of Credit (HELOC) or a Home Equity Loan (HEL). A HELOC is a line of credit that allows the homeowner to take out cash as needed

over a “draw period,” after which the funds are returned over a predetermined time.  A HEL is a lump sum of money a homeowner can borrow and then pay back over the loan’s term. Each of these products uses the home’s available equity as collateral. 

Another way to tap into your home’s equity is through a cash-out refinance. This works by taking out a new mortgage, paying off the existing loan and keeping the difference in cash. This is typically recommended when homes are rising in value, like they are in the current market. If you do go this route, it’s important to crunch the numbers carefully before going ahead to be sure you can really afford the payback terms on your new mortgage.

Home values are skyrocketing, and you may want to cash in on the action. Read the tips listed here to learn about possible financial moves you can make, all thanks to your home’s increased equity. 

Your Turn: Have you taken any type of financial move since homes started increasing in value? Tell us about it in the comments. 

5 Ways to be a Better Coworker

Every employee wants to be that coworker the entire team loves. But when you’re working with the same people day in and day out, it can be challenging to constantly put your best foot forward. Whether you’re in the same workplace for a while or you’re just starting out, here are five ways to be a better coworker.

  1. Communicate in person

Yes, it’s old-fashioned, and yes, there are so many other ways to communicate, but nothing beats a face-to-face conversation. Whenever the opportunity presents itself, talk to your coworkers in person. In an NPR TED Radio Hour, psychologist Susan Pinker said that face-to-face interactions can trigger the release of oxytocin in the body, which can positively impact your mood and help promote trust and collaboration. 

  1. Pay it forward

Kindness has a place in the workforce, too. Whenever you can, do a favor for a coworker without expecting anything in return. You can offer to make another team member a coffee, to pick up lunch if you’re running out anyway or even to help with their workload if you see they’re overwhelmed. Kindness always generates warm feelings in both directions. 

  1. Work hard

Nobody likes a shirker. Make sure you always do your job well and meet all your expectations at work. You’ll be helping the entire team stay productive and avoid any resentment that coworkers may harbor toward a member of the team who doesn’t pull their weight. 

  1. Be honest about your capacity

While you want to do your job well, it’s also important not to take on more than you can handle. If you’re asked to shoulder additional work and you’re completely swamped, you’re better off explaining that you can’t take on any more work at the moment, instead of agreeing to do it and then struggling to get it done on time or let other work suffer. It’s always best to be honest – with others and with yourself. 

  1. Avoid gossip

Catching up on office gossip around the water cooler is a daily ritual for many employees, but it doesn’t make many friends. It’s always great fun to hear the latest about everyone at the office, but no one wants to be the one everyone else is dishing about. If you build a name for yourself as the team member who avoids gossip, you’ll also be the one everyone loves and knows they can trust completely.

Follow these tips to put your best foot forward at work!

Your Turn: Are you an awesome co-worker? Tell us about it in the comments.