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Personal Financial Improvement With The Fruit Of The Spirit

How does love apply to money? Is it possible to be joyful even when broke? Do I have the self-control to get out and stay out of debt? Find out more!

The post Personal Financial Improvement With The Fruit Of The Spirit appeared first on Bible Money Matters and was written by Tim Kiser. Copyright © Bible Money Matters – please visit biblemoneymatters.com for more great content.

Source: biblemoneymatters.com



Why 2 Finance Experts Still Struggled To Buy This House

home buyerTony Matheson

Think two seasoned certified financial planners would have an easy time buying a house? Tony and Barbara Matheson would beg to differ.

In fall 2019, these empty nesters found themselves itching to downsize from their large rental in the uaexpensive San Francisco Bay Area. Hoping to buy a reasonably priced house within walking distance of restaurants and other amenities, they set their sights on Sacramento, CA. Armed with a healthy income, solid credit history, and a deep knowledge of personal finances—plus they’d owned property before—they figured they would sail through the home-buying process.

Six months and three lost bidding wars later, they realized that Sacramento’s real estate market was far more cutthroat than they’d imagined.

In March, the Mathesons finally purchased a three-bedroom, one-bathroom 1926 Tudor on a tree-lined street. With the closing papers signed, they figured they were home-free—but COVID-19 was about to throw another curveball into the picture.

Here Tony shares their story, and his hard-won lessons for aspiring first-time home buyers and others who want to learn what buying real estate is really like today.

Tony Matheson House
Tony and Barbara Matheson’s new home in Sacramento, CA

Tony Matheson

Location: Sacramento, CA
House specs: 1,225 square feet, 3 bedrooms, 3 bathrooms
List price: $550,000
Price paid: $580,000

Why did you decide to move?

We’d been living in the Bay Area and were looking to downsize since both of our kids had moved out. We wanted to be near downtown Sacramento, close to restaurants, bars, museums, and coffee shops.

I’d think home buying would be a breeze for two finance pros. How did it go?

I was really surprised by how tough the market was. After five months touring homes, we made an offer on our first house. This house went into a bidding war; we had to raise our bid five times before tapping out.

Next, we fell in love with a second home. This time, we offered the sellers $30,000 over the asking price. The sellers had so many other bids, they never even bothered to counter our offer.

We found a third home, and once again bid over the asking price. But after five tries, we lost out again. It was heartbreaking.

How awful! Why do you think these homes sold to other buyers?

We came prepared with what most consider strong financials for making an offer on a single-family home: great credit scores, a significant down payment, pre-approval for a mortgage. We offered good earnest money and 15-day escrow, didn’t include an appraisal contingency, and probably had a few other bonuses to the seller that I’ve forgotten. So we were doing everything “right.”

What we were finding is that we were up against some other buyers who were making all-cash offers, sometimes $50,000 above the asking price. How does anyone compete with that?

So how did you finally get an offer accepted?

We were extremely fortunate that we had a great real estate agent who was able to find a home that hadn’t been listed yet. We could negotiate one on one with the seller without having to compete against multiple offers.

The sellers had planned to invest $30,000 to $40,000 on home improvements before putting it on the market. We offered to buy the house as is, without the improvements. After going back and forth a few times, the sellers took our offer.  

What did you like about this house?

We knew within 5 seconds of walking into the house that this was the one. It was the perfect neighborhood. We were close to everything, within walking distance to plenty of bars and restaurants. The outdoor area is gorgeous. Beautiful trees surround our house, and the house is the perfect size for us.

Living Room
The living room of Tony and Barbara’s Sacramento home

Tony Matheson

So once your offer was accepted, what happened next?

The sellers weren’t prepared to move immediately. They needed time to prepare. So we rented the house back to the sellers for a month after closing. We closed on Valentine’s Day, but we didn’t move in until mid-March.

Little did we know what was about to happen.

Tony's home
Tony and Barbara love this window in their Sacramento home.

Tony Matheson

March is when the coronavirus really hit. What was it like moving during that time?

It was difficult and terrifying in the beginning. We moved in ourselves without hiring movers. Then, after we moved in, it was quite an adjustment. Simple things like calling an electrician or completing other minor home projects were enormously difficult.

Did you make any renovations to your home?

We put $10,000 to $12,000 into the house so far. The major issue after moving in was electricity—it needed to be completely reconfigured. For example, the second bedroom, which became my office, only had two plugs. Between my monitors for work, computers, Peloton, cellphones, and other devices, I needed 12 plugs. We also wanted to put in a tankless water heater for more space, and install a security system.  

Tony working on the house
During the COVID-19 shutdown, Tony and Barbara painted their new home.

Tony Matheson

How did quarantine affect these repairs?

It was horrible. We couldn’t get anyone to come out to do any work for at least three months. For the first month, no one was booking. Then, when we could finally get through, the businesses were overwhelmed with requests.

Tony celebrating new home
Tony and Barbara celebrate finally closing on their dream home in Sacramento.

Tony Matheson

What was it like when you finally settled in?

It was exhilarating, exciting, and weird. Exhilarating because we got the house we wanted. Exciting because we were beginning a new phase in our lives. And weird because we moved in at the beginning of the pandemic. We wanted to have a housewarming party, but of course, we couldn’t.

What is your advice for aspiring home buyers?

Even if your finances are completely buttoned up, be prepared that buying a house may be a difficult and even painful process.

first time home buyer
Tony and his daughter on game night in their new home

Tony Matheson

Emotionally it does get hard. As much as you try not to get attached to a house during the negotiation process, you can’t help it. And there is a competitive drive that kicks in when you are in a bidding war with others. It’s draining.

Still, in the end, knowing that you’ve overcome challenges along the way just makes you more appreciative of the reward at the end. We have a place to call home amidst all this craziness. It’s all worth it.

first time home buyer
Their parrot Kiwi also enjoys the new home’s view.

Tony Matheson

The post Why 2 Finance Experts Still Struggled To Buy This House appeared first on Real Estate News & Insights | realtor.com®.

Source: realtor.com



7 Ways To Make Music Lessons More Affordable

Playing an instrument can be a wonderful experience for a child.  There are many ways to give your child a musical education without spending a fortune.

The post 7 Ways To Make Music Lessons More Affordable appeared first on Bible Money Matters and was written by Melissa. Copyright © Bible Money Matters – please visit biblemoneymatters.com for more great content.

Source: biblemoneymatters.com



How to Make Better Financial Decisions

Woman learning how to make better financial decisions

A key financial decision people struggle to make is how to allocate savings for multiple financial goals. Do you save for several goals at the same time or fund them one-by-one in a series of steps? Basically, there are two ways to approach financial goal-setting:

Concurrently: Saving for two or more financial goals at the same time.

Sequentially: Saving for one financial goal at a time in a series of steps.

Each method has its pros and cons. Here’s how to decide which method is best for you.

Sequential goal-setting

Pros

You can focus intensely on one goal at a time and feel a sense of completion when each goal is achieved. It’s also simpler to set up and manage single-goal savings than plans for multiple goals. You only need to set up and manage one account.

Cons

Compound interest is not retroactive. If it takes up to a decade to get around to long-term savings goals (e.g., funding a retirement savings plan), that’s time that interest is not earned.

Concurrent goal-setting

Pros

Compound interest is not delayed on savings for goals that come later in life. The earlier money is set aside, the longer it can grow. Based on the Rule of 72, you can double a sum of money in nine years with an 8 percent average return. The earliest years of savings toward long-term goals are the most powerful ones.

Cons

Funding multiple financial goals is more complex than single-tasking. Income needs to be earmarked separately for each goal and often placed in different accounts. In addition, it will probably take longer to complete any one goal because savings is being placed in multiple locations.

Research findings

Working with Wise Bread to recruit respondents, I conducted a study of financial goal-setting decisions with four colleagues that was recently published in the Journal of Personal Finance. The target audience was young adults with 69 percent of the sample under age 45. Four key financial decisions were explored: financial goals, homeownership, retirement planning, and student loans.

Results indicated that many respondents were sequencing financial priorities, instead of funding them simultaneously, and delaying homeownership and retirement savings. Three-word phrases like “once I have…,", “after I [action],” and “as soon as…,” were noted frequently, indicating a hesitancy to fund certain financial goals until achieving others.

The top three financial goals reported by 1,538 respondents were saving for something, buying something, and reducing debt. About a third (32 percent) of the sample had outstanding student loan balances at the time of data collection and student loan debt had a major impact on respondents’ financial decisions. About three-quarters of the sample said loan debt affected both housing choices and retirement savings.

Actionable steps

Based on the findings from the study mentioned above, here are five ways to make better financial decisions.

1. Consider concurrent financial planning

Rethink the practice of completing financial goals one at a time. Concurrent goal-setting will maximize the awesome power of compound interest and prevent the frequently-reported survey result of having the completion date for one goal determine the start date to save for others.

2. Increase positive financial actions

Do more of anything positive that you’re already doing to better your personal finances. For example, if you’re saving 3 percent of your income in a SEP-IRA (if self-employed) or 401(k) or 403(b) employer retirement savings plan, decide to increase savings to 4 percent or 5 percent.

3. Decrease negative financial habits

Decide to stop (or at least reduce) costly actions that are counterproductive to building financial security. Everyone has their own culprits. Key criteria for consideration are potential cost savings, health impacts, and personal enjoyment.

4. Save something for retirement

Almost 40 percent of the respondents were saving nothing for retirement, which is sobering. The actions that people take (or do not take) today affect their future selves. Any savings is better than no savings and even modest amounts like $100 a month add up over time.

5. Run some financial calculations

Use an online calculator to set financial goals and make plans to achieve them. Planning increases people’s sense of control over their finances and motivation to save. Useful tools are available from FINRA and Practical Money Skills.

What’s the best way to save money for financial goals? It depends. In the end, the most important thing is that you’re taking positive action. Weigh the pros and cons of concurrent and sequential goal-setting strategies and personal preferences, and follow a regular savings strategy that works for you. Every small step matters!

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Want to know how to allocate savings for your financial goals? We’ve got the tips on how to make financial decisions so you can be confident in your personal finance! | #moneymatters #personalfinance #moneytips


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