One of the most important questions consumers will ask themselves is “how much money the sale of their home will yield?” That’s largely dependent on two things: the amount you still owe on the home and what you will have to pay your realtor for selling the home. If you have a second mortgage, or home equity loan, on the property you’ll have to pay that off when you sell the home. When you sell a home, you’ll also have to pay interest on your outstanding mortgage balance from the date of your last payment until the date of the sale. You’re also liable for property taxes up until the day you sell the home. At times, seller’s have additional expenses. Local governments will often require that you pay a transfer tax when the home is sold. Incidental closing costs may also nibble away at your proceeds.

Proceeds from Sale of a Home

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Depending on how fast prices and rents rise and how long you stay in your home, you may be better off renting rather than buying. Factors that are part of the equation are the difference in monthly rent versus mortgage payment, home value appreciation, annual rent increases, the interest rate you will pay on your loan, your marginal tax rate and the yield you might receive on savings. When looking at these factors, consider the present value of each option. The one with the lower present value will be the better financial choice.

Rent or Buy?

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Everybody wants to be a millionaire, but few have the savings discipline to get there. Your current savings, additional monthly savings and the rate of return you receive all go into saving to be a millionaire. But it may not stop there. If you want to have a million dollars worth of purchasing power, you have to factor in inflation into your savings plan. That means that depending on the amount of time it takes you to save a million dollars you might have to have saved even more in order to have a million worth of purchasing power.

Save to be a Millionaire

View Resource Save to be a Millionaire

Whether you’re trying to save for big screen television, new car or for a down payment on a new home, time, money and rate of return will all be determinant factors of when you’ll meet your savings goal.

Save Towards a Goal

View Resource Save Towards a Goal

When purchasing a home the mortgage you choose and the options you choose with it will have significant impact on how much your home costs you in the long run. Interest charges, origination fees, fees paid for a specific interest rate (formerly referred to as ‘points’) and settlement charges will often have the most impact. Of these, the interest rate you pay will matter most.

Compare Two Mortgage Loans

View Resource Compare Two Mortgage Loans
You have probably noticed by now that when you get your credit card bill each month, it does not read like all the other bills you receive, like utility, gas, cable, and others that have a total due amount. Your credit card bill comes with a minimum payment amount in addition to your outstanding balance. While the outstanding balance might be a little more than you want to contemplate paying at the moment, the minimum amount may be no better. In fact, it can cost you a great deal more if you pay only the minimum balance for an extended period. What is a Minimum Payment? The minimum payment amount is the absolute minimum amount of money the credit card will accept to consider your obligation to them, for the indicated term – usually a month, satisfied. According to All Financial Matters, the minimum payment is typically two percent of the outstanding balance, although that may vary by card issuer. At a minimum, it should cover accrued interest charges for the month. Card issuers also typically have a minimum dollar amount payment, of say $25 if the alternative minimum payment would fall below that amount. Benefits of Minimum Payments Credit card companies did not have nefarious intentions in mind when creating minimum payments. In fact, they were a bit of a boon to consumers who may need a little more flexibility in their payment requirements. Some months the gas bill can be higher than others, or there may be unexpected car repairs that come up. Having the ability to pay only the minimum payment in these rare months is a great thing for consumers who may be establishing themselves and just getting started on their savings plans and rainy day funds. The problem arises when you rely solely on making minimum payments without making headway on the actual debt. Impact of Making Only the Minimum Payment As the saying goes, “It is a trap!” One that can keep you buried in debt and paying interest on your credit card debt – while barely touching the actual balance due month after month after month. That can occur even if you never make future charges on your credit card. Honestly, though, the minimum due payment is not evil by itself, it was created with good intentions. Unfortunately, it has become far too great a temptation for many consumers who consistently pay only the minimum balance. That is when it becomes a trap – one that ties you to debt and the credit card issuer for many more years than necessary. Credit Donkey explains that by paying only the minimum balance on a $14,718 debt with a 13.04 percent APR, it would take 31 years to pay off the full debt. In the process, you would pay well over $16,000 in interest (remember the balance owed on the credit card is a little less than $15,000). If you increase the monthly payments to $300 per month, you can reduce the payoff time to only six years paying only $6425 in interest. Adding one dollar more per month reduces the total interest payments by $35. Ten extra dollars per month an extra $333. Doubling the payments to $600 per month allows you to pay off the debt within two years and reduces the total interest payments to only $2,493. As you can see from this example, the difference is substantial. Plan to Pay Off Your Balance The best scenario is one in which you pay off your balance each and every month. It minimizes the amount of interest you will pay while allowing you the flexibility credit cards represent. Barring that, because sometimes, it is just impossible to do in one fell swoop, create a plan in which you make significant progress toward paying off the balance each month. Give yourself a deadline for paying off the balance and determine how many months that will take (keeping in mind that interest accrues and grows with each passing month). Making minimum payments on your credit card can be tempting – especially when life takes you by surprise. Try to keep the minimum payment months to a minimum and pay as much as possible whenever possible. In the end, this will let you enjoy an impressive reduction in the total amount you will wind up paying for those items you have charged.

Avoiding the Minimum Payment Trap

View Resource Avoiding the Minimum Payment Trap
Choosing a college major can be intimidating. You are making a commitment about what you think you will want to do for the rest of your life at a time when making dinner plans with friends can be a challenge. With the costs of education rising exponentially, pressure is increased to choose a major that justifies the expense of your education – one that allows you to repay the loans you took out in order to receive that education. The Value of a College Degree Money matters when choosing a college education – especially in light of the fact that some people are beginning to question the actual value of a college education. According to CNBC, college tuition for private universities has tripled since 1990, while public universities have increased tuition costs by more than 100 percent over the last 25 years. At the same time, salaries have seen only small increases, leaving the students of today with a far smaller ROI for attending college than their parents received for those same education dollars. The bottom line is that there is more pressure today than ever for students to select profitable majors. Finding a Major That’s Right for You Choosing the right major can make all the difference in the world for your future financial stability. While many students are tempted to go with their interests and passions when choosing a major, that does not always translate into long-term happiness or financial security. Student Loan Hero suggests that turning your passion into your employment can sour the love affair aspect. For instance, while you may love cooking, the stress of working in a busy restaurant may wear down that love over time. More importantly, following your passions may make paying off an enormous student loan debt more difficult, the organization says. It’s true that there are a few artists who make it big, though many, many more do not. Instead, consider focusing your selection on choosing a major that offers greater earning potential, a larger number of entry level job prospects at a living wage, and financial incentives, such as tuition reimbursement. Tools and websites that can help are Payscale.com, Salary.com, and BLS.gov. Understanding Your Job Prospects Discuss career options and job prospects with academic advisors and career counselors within the college. Look for fields that are always going to have high demand. Healthcare, for instance, offers a high demand industry with virtually unlimited growth potential as the world is already experiencing a global health workforce shortage – one that is set to increase even more by 2035. While not all careers can offer this type of job security or prospect, taking a little time to research your options can help you pinpoint careers offering better prospects within your field of interests. Meeting Your Future Financial Obligations Students today are facing overwhelming debt from day one with their college degrees. Rising costs have rendered parents unable to cover the full costs of tuition and other fees and expenses associated with college educations. That places the burden on students to shoulder more of the costs – often in the form of student loans. That is why it is so important to choose fields that offer you the opportunity to earn a living wage, and also allows you to pay off the debt you are facing at graduation – especially in light of a job market that is less than stellar despite the recent recovery. That means that in addition to job prospects, you also need to pay close attention to likely starting salaries. The median wage in an industry is just that – median. Students coming out of college are rarely going to start anywhere near the median income in their industries. Ask around and get facts about actual starting salaries and use that as your guide to help you choose a major and career path that aligns with some of your interests, while simultaneously keeping your financial interests at the front and center of all your educational decisions. When you take the time to choose a major that is a financially sound decision you have greater opportunities to pursue your passions on the side while working in a career that pays a living wage with plenty of room for growth.

Will Your Choice of Major Payoff Financially?

View Resource Will Your Choice of Major Payoff Financially?
Losing a job is never easy. Losing the health benefits that your job provided to you and your family can be a devastating loss for any family. Since 1986, COBRA laws have provided an opportunity for people who have left their jobs, voluntarily or otherwise (except those fired for gross misconduct), to continue their health insurance coverage while in between jobs. Overview of COBRA Benefits You will be responsible for the costs of continuing your insurance coverage through COBRA, and the coverage can extend to your spouse and dependent children. The period you are eligible for coverage will vary according to your situation and is typically between 18 months and 36 months. When COBRA coverage was introduced, it was the only option available to the many people who needed to continue health insurance coverage between jobs – one that came at a high price as employers were able to charge the full cost of the insurance coverage plus a two percent administrative fee. If you are accustomed to your employer paying some or the bulk of your health insurance premiums, you might be in for a little bit of sticker shock. Today, people have other options to consider, including special circumstances for Health Insurance Marketplace enrollment. There, you can compare options available to you and costs to see if COBRA is the best option for you – and it may be. Just make sure you are making an apples to apples comparison that considers terms like deductibles and coverage limits. Eligibility for COBRA Unfortunately, not all workplaces are required to participate in COBRA. For instance, the U.S. Department of Labor only requires employers that have 20 or more employees currently covered by the company health care plan to be required to provide COBRA protection, and you must have been eligible for coverage at the time your employment was terminated. Additionally, you may be eligible for COBRA benefits if you are the dependent of a COBRA eligible employee who lost coverage because of the death of the covered employee, divorce, or the covered spouse becomes eligible for Medicare. You do not have to be laid off or quit your job to be eligible for COBRA. In fact, you may be eligible if your hours are cut, rendering you ineligible for the coverage previously provided by your employer. What COBRA Coverage Involves COBRA coverage must be identical to the coverage employees receive as part of their benefits packages. For many families, this is perfect as they are already familiar with the COBRA coverages and limitations. For other families, it may be a good time to explore your options and find out what else is available. Just as with traditional health insurance benefits, children born to covered employees during the continued coverage period are eligible for immediate health insurance coverage upon their birth (as are those adopted by covered parents) though you must add the child to the plan according to the requirements of your health plan. You can lose coverage through COBRA if any of the following things occur: Additional Information For three decades, COBRA has proven to be a lifesaver for people who lost their jobs and needed health insurance. Some had preexisting conditions that would have rendered them ineligible to qualify for new insurance after a period of having no health insurance. By continuing coverage until new health care coverage began, this became a non-issue for many employees throughout the country. Today, people have more options available to them. While COBRA coverage continues to provide a lifeline for many, it is not always the best choice for all. Take your time and discuss your needs with your insurance agent to find out if there are other health insurance products that may serve your needs, and those of your family, better. At the very least you may find that there are other products that are more affordable during a time when money matters most.

Your COBRA Health Insurance Rights

View Resource Your COBRA Health Insurance Rights
Renting a new apartment can be exciting. However, it is important not to rush into things lest you make mistakes you will spend a long time wishing you could take back – like these listed below. When Choosing Your Apartment While some might think this is the easy part, it is not always as easy as it seems. It is especially true when apartment shopping from a distance. Make sure you avoid these mistakes, though, because you may discover the charming little apartment that you see as a diamond in the rough may turn out to be just a lump of coal. When Signing the Lease You should never sign a lease without carefully reading it first. Look for anything that isn’t as originally described for you and pay attention to the responsibilities you face as tenants for things like lawn care, snow removal, association fees, utilities, water, and garbage. Also be aware of regulations stated in the lease regarding deposits and first and last month’s rent. Do not sign a lease that you do not like. Some unscrupulous landlords have been known to change the parameters between what they tell you when trying to get you interested in the apartment and what they write into the lease. They may also add things that they never told you about into the lease. If you do not like it, don’t sign it. There are other apartments and plenty of honest landlords out there. When Moving In Before you move one box into the apartment, conduct a room-by-room walk-through inspection, with a video or still camera to document every scuff, nick, tear, and flaw in the apartment. Submit a copy with your lease agreement and save copies of your own for posterity. That way you can make a legitimate claim for the return of your security deposit at the end of your lease. You are also protecting yourself from claims that you did the damage. The final mistake that many renters make comes in the form of failing to get renters insurance. In most cases, it is a very small monthly investment – one that is worth every penny and then some for the liability protection alone. After all, you may be responsible for legal fees even if you are found innocent of liability claims against you. Renters insurance will cover your legal fees (up to the limits of the policy) as well as any judgments awarded against you. Additionally, renters insurance will help to replace or repair personal property that is damaged or destroyed in a covered event. Avoid these mistakes when renting your next apartment, so you can rent without regrets.

Renter Mistakes to Avoid

View Resource Renter Mistakes to Avoid
Regardless of how safe and careful you are as a driver, the odds are good that you will be in an auto accident, on average, once every ten years. People who drive in large, urban areas or late at night face greater risks of being in accidents, but the nationwide average is once every ten years. That means you need to make sure you have the right kind of coverage to protect your interests if and when an accident occurs. Difference Between Comprehensive and Collision Insurance Comprehensive coverage refers to damage done to your vehicle by something other than a collision. This includes things like: Collision coverage applies to damage resulting from a collision. This includes things like: Depending on the terms of your policy, collision coverage can be used to pay for repairs to your vehicle when another driver is at fault but is slow to pay. In these instances, your insurance will cover the cost of repairs and then seek reimbursement from the other driver’s insurer. When Collision Coverage Makes Sense Collision coverage not only makes sense but is critical, for some people. These instances include: Times when Dropping Collision is Appropriate People with newer cars often keep collision coverage to protect their investments – even if your car loan is paid off. That does not mean it is always in your best financial interests to do so. There are occasions when it might not be as financially beneficial to have collision insurance, like in these instances: That said, not everyone can afford to go without insurance coverage even when these rules apply. There are no hard and fast rules; that is why it is best to work closely with a trusted insurance agent to determine what your needs are when it comes to auto insurance protection. After all, insurance is about protecting your financial interests.

Dropping Collision from Your Auto Coverage

View Resource Dropping Collision from Your Auto Coverage