Author Archives: Ms. Miel

About Ms. Miel

Miel spends her time split between Washington, DC and Africa. She works on international relief and development projects in DRCongo, Burundi, Zimbabwe, Liberia, & Sierra Leone. Check out Miel's photos!

7 Tips for First Time Homebuyers

Leave a reply

3e2f5f558c9d443b8748b3b0a47d9f2e Purchasing your first home is one of the most exciting, yet terrifying, times of your life. Most likely, this is the most amount of money you’ve ever spent, by far. Buying a home is not an easy process, as many first-time buyers will come to find out. In order to make the process as smooth as possible, take into account these 7 tips when buying your first home.

Be patient. Homes may come and go very quickly, especially if you’re buying in a seller’s market, where bidding wars may even take place. While it’s easy to get emotionally attached to a home, especially as a first-time buyer, do your best to be patient and have confidence that the right house will come along.

Know beforehand what you can afford. What you can afford and what you may qualify for can be two very different numbers. Prior to shopping for a home, decide in advance how much you are able to spend per month and what type loan you’d prefer to have. It’s very easy to get swayed in the moment, so think long and hard about how much you want to spend before looking at houses.

Comparison shop for the loan. Your home loan is probably the largest amount of money you’ve ever borrowed. Make sure you get the best interest rate and the best terms by shopping around at different banks, credit unions and lenders. Don’t forget to online shop, too. A home loan through Newcastle Permanent, for example, offers awarding-winning packages to suit a variety of buyers.

Decide what you want in a home. It’s a good idea to make a checklist of all the “must-haves” for your first home, and then be flexible. You may be able to get a good deal on a home that doesn’t meet all of your criteria but can be changed to your liking down the line. Have a general idea of what you want but be willing to stray from your desires if it positively impacts your finances.

Think long-term regarding your home. You may only be planning on staying in the home for a few years, but what if the market goes down and you find yourself upside down in your mortgage? Since predicting the market can be an impossible task, think of your home as somewhere you will be for the long-haul. Decide how this affects what you want to spend, the location and what you’re not willing to budge on.

Look at the entire cost of the home, not just the loan. There are factors to consider other than your monthly principal and interest payment, including home owner’s insurance, HOA fees, cost of heating and cooling, distance to work, any repairs that need to be done and more. Mortgage payments tend to be lower than rent payments, which can make owning a home enticing to many if they haven’t considered all of the outside factors, including maintenance.

Put at least 20 percent down. While there are a variety of loans that do not require a 20 percent down payment, it’s in your best interest to put down as much money as possible. This greatly increases your chances of qualifying for the loan, it eliminates the need for private mortgage insurance (PMI) and it gives you instant equity in your house.

While buying a home for the first time seems fun and exciting, there are many details that need to be figured out beforehand. By keeping a level head and not letting your emotions get the best of you, you will find a home you love that suits your needs for the long-term.

How You Can Use Your Credit Card to Boost Your Credit Score

1 Reply

9e344e349634408da3b4707eefdd5480 If you have poor credit, a shallow credit history or no credit history at all, you may be able to boost your score through the (responsible) use of a credit card. When used properly, a credit card is a great tool for improving your credit, but when used without caution it can lead you down a sure path to debt.

Whether you have just filed for bankruptcy, are a student with no credit history or simply want to improve your credit profile before applying for a loan, a credit card can help your credit score in a variety of ways.

Prove That You Can Use Credit Responsibly

The good news about credit is that you are judged only on your ability to make your payments. Therefore, you can actually start building good credit just by buying $25 worth of gas each month and paying it off by the due date. This gives anyone the opportunity to establish their credit while paying for their daily expenses.

Knowing How to Read Your Credit Score

Your credit worthiness is calculated through your FICO score, which is a three-digit number that helps creditors determine which types of loans they should offer. When it comes to calculating your FICO score, ability to pay on time makes up 35 percent. Keeping your balances low can also help because the amount you owe on a given account is 30 percent of your credit score. That means paying on time and maintaining a low balance account for over half your score.

Establish a Longer Credit History

One thing that lenders look for when approving an individual for a loan is the average age of their credit history. Generally, you have a better chance of getting a loan if you have a credit history of at least five years. However, you don’t have to use your credit card for five years to get credit for having it. As long as the account has been open for five years or more and you have always made your payments on time, you can show lenders that you are worthy of a loan. A longer credit history is better for your credit score as it is 15 percent of your FICO score.

Credit Cards Can Improve Your Credit Mix

In addition to a long credit history, lenders also like to see that you have a good mix of both secured and unsecured loans. Having a variety of different types of loans that are in good standing helps creditors see that you’re both responsible and timely with your payments. However, staying in good standing with credit is sometimes easier said than done. If you’ve found yourself falling behind on your monthly credit card payments, nonprofit agencies like CreditGuard can help. They actually negotiate with your creditors on your behalf to lower your rates and consolidate your payments.

Opening a credit card can help you increase your credit score in many ways. It can improve your credit score, establish your credit history and show lenders that you are able to pay your debts on time. Just remember to use it with caution.

Where has Miel gone?

1 Reply

I’ve been missing in action from writing for the last several months. My blog, Vicarious Nomad, first started out as Where in the World is Miel, and these days it seems you should changed to Where in the World has Miel gone? Not specifically due to dropping off the edge of the earth to some remote locale (though there has been a fair amount of travel), but rather just a whole lot of life going on.

miel clark olivia jan 2015

To sum things up, try this one for size for a summary of seven months in a blurb. Gave birth at home to my dear sweet Clark. Ran several family businesses (while nursing) and increased the profits on both businesses several times over (Olivia Beach Camp Cabins and District Media). Tandemly sold our place in DC and bought a sweet bungalow in a fabulous location in Portland, Oregon (just 1.2 miles from my sis Darcy). If that wasn’t enough, then land my dream job as the new Executive Director of Green Empowerment. Add in travel (with my new born) to Oregon, the Bay Area, New Orleans, Tahoe, and Kenya to top it off.

So you can see that there has been just a bit going on in my life. Looking at my travel and schedule this spring I don’t see that decreasing any, but I do see the need and desire to partner with Darcy in authentically sharing about our finances and what that looks like as we seek our own versions of sustainable family finances.

After nearly nine years of finance blogging, on and off, there is perhaps more than ever to share with readers about what it takes to keep a family in balance, how we prioritize our finances is really how we prioritize our lives, and so much more.

Thanks in advance for reading, commenting, sharing with others. It helps inspire us to continue to share our stories. Thought I’d share a few fun pics of us this holiday season as well.

cronin bash 2014 zoo lights 2014

Cheers,

Miel

Invest in Retirement or Pay for College? How About Both?

Leave a reply

7cd5aed6674a46eab97e53c3da70960f One problem that every parent faces is whether to invest for their retirement or pay for their children’s college.

On the one hand, the cost of college is reaching unprecedented levels. Outstanding student debt recently exceeded $1 trillion so helping out your children with college tuition helps prevent them from going into crippling debt.

On the other hand, your children have their entire lives to pay back student loans while you have a more limited timeline to invest for retirement.

Today we’ll review the advantages of each option and propose a third approach to retirement and college savings.

Advantages of Helping Pay for your Children’s College

There was once a time where a student could work his way through college. Today that is becoming less and less realistic for the 20+ million college students in the United States, even for students who work full-time while going to school.

Students who graduate with large amounts of debt typically end up being forced to hold off on life events like getting married, moving out of their parents’ house, or buying a home. It can lead to additional stress and poor credit scores.

The biggest advantage of helping pay for your children’s college education is that upon graduation they will have a low-level or non-existent student loan debt. This will give them more freedom and flexibility, not to mention stability, in their post-grad life. They will be more likely to take calculated risks such as starting a business, and will likely have a lower level of stress because they don’t have massive student loan debt in the back of their mind.

The advantages of helping pay for your children’s college education is extremely visible and will likely result in gratitude from your children – and who doesn’t need more of that?

Advantages of Investing for Retirement

The advantages of investing for retirement are not as visible in the short-term. Saving and investing for retirement does have an advantage over saving for a child’s college education, though: unlike college, retirement can’t be funded on loans.

Choosing to forgo retirement savings could result in not having enough for those long years of your life. Many people help their children with college with the belief that they will be able to “catch up” later on, but the problem with this logic is that a dollar invested today is worth more than a dollar invested 20 years from now. Compound interest makes money invested today more valuable, making it important – and easier – to save for retirement now instead of playing the catch-up game later on.

Is it Possible to both Pay for College and Invest for Retirement?

You don’t have to think of these two important options as an either-or, but before you start a college fund of any kind, you should make sure you are on track for eventual retirement.

Use a retirement calculator, learn retirement annuity basics, and find out how money manager fees differ. This will ensure that you are knowledgeable about the retirement process and prepared for what’s ahead. Only then should you consider saving for your children’s college educations.

If you do have additional income that can be diverted to save for your children’s college accounts, consider looking into a tax-advantaged 529 plan. Because these accounts are treated favorably from a tax perspective, you will be able to save more than if you simply put money into a savings or individual investment account. Plus, there are hundreds of unique ways your child can save money in college including:

  • Community colleges
  • Keeping a Steady job
  • Applying to small, local scholarships
  • FAFSA
  • Purchasing Used Textbooks
  • Strict Budgeting

Regardless of how much you decide to contribute towards your children’s college tuition, retirement planning is a necessity that can’t be overlooked.

Repairing Your Credit in 2015

Leave a reply

With the calendar flipping over into a new year, resolutions are on everybody’s mind. Maybe you’ve resolved to pay off all of your debt this year. Maybe you are determined to get rid of those bad money habits that landed you in hot water in the first place. It’s important, though, when figuring out plans for the coming year to remember to focus as much on building something as on breaking old things down.

So, in this post, we’re going to talk about the things that you can do to repair your credit rating.

#1. Start at the Beginning

Before you can take action, you have to know where you’re starting. Getting your hands on a copy of your credit report is the best way to do that. You’re entilted to one free copy of your credit report from each of the three credit reporting bureaus every twelve months. What better time to get yours than during the start of a new year?

#2. Fix Any Mistakes

Go over each of those credit reports with the finest of fine toothed combs. There is no such thing as a “minor” mistake when it comes to your credit report. Dispute every single detail that is not 100% accurate. The credit bureaus allow you to do most of this through their websites. They will check into each dispute and if they cannot prove that what they have on record is the truth, that item will be taken off of your report.

Be patient with this. It can take a few months to get these blemishes erased. The credit agencies have 30 days to act on a dispute, then there’s a 30 day wait for the information to be proven and then they have up to 30 days to correct the information on your record. It won’t happen in just a few hours.

#3. Take Out a Secured Credit Card

If you’ve just paid off a ton of debt you’re probably reluctant to take on anything new. And, if you have a history of only paying minimums or maxing out cards, you aren’t yet ready for an unsecured credit line.

A secured credit line is one that you open up with some sort of collateral, typically cash. They are typically granted in smaller amounts–most start at around $300. You pay the bank your $300 and they give you a card with a $300 limit. You then use that card like you would any credit card: paying for things and then paying off the balance. If you default, the bank simply keeps the money you gave them as collateral. It’s sort of like a gift card except that your payment history gets reported to the credit bureaus. Secured lines of credit are great ways to teach yourself new and responsible habits while also building up a positive payment history on your credit report.

#4. Work with Bad Credit Financers For Bigger Things

You don’t want to take on a lot of debt, but after successfully managing your secured credit card(s) for six months or so, you will probably feel ready to take on a larger type of debt. A good way to do this is to buy a car. The best way to do this is to work with a “middle man” who helps people with bad or sketchy credit get auto loans. One such “middleman”, Consumer Portfolio Services, buys automobile contracts from dealerships and retailers and then “sells” them to people whose credit will get them turned away at a regular bank. You then take the loan from CPS (or whoever) and they report your positive payment history to the credit bureaus.

If you manage to go a year without any major slip ups–missing payments, only paying the bare minimums, defaulting on a credit line, congratulations! You’re on your way to having positive and solid credit for good!