First comes marriage then comes mortgage. And as you know, both cost a pretty penny. From how to plan a wedding without going broke to figuring out how much home you can afford, we can help you make the most of your hard-earned cash in these exciting milestone years.
Article
How Much Home Can You Afford?
One of the most important decisions to make as a first-time homebuyer is determining your budget. It's important to get this number right so you don't waste time looking at (and falling in love with) homes you can't afford.
ne of the most important and difficult decisions you will make as a first-time homebuyer is determining your budget. Be aware that it's important to get this number right as early in the process as possible. After all, you don't want to waste time looking at (and maybe falling totally in love with) homes that you can't afford.
While the standard rule of thumb is to allocate about 30 percent of your income to housing costs, there are a plethora of online calculators that will help you arrive at a ballpark number. The actual calculation, however, is more complicated. Try to answer these questions to figure out the housing budget that’s right for you and your individual situation:
How much cash do you have? While it's possible to get a mortgage for a down payment as low as 3.5 percent, putting down at least 20 percent will get you a better rate from a lender. But before you plunk all of your reserves into a down payment, remember that you will need extra money to pay for the move and for expenses associated with the mortgage (around 2 percent to the loan). You'll also want to have on hand an emergency fund of at least three months' worth of expenses in the bank once you move into the loan. That will help you out if you happen to lose your job or if you need to fund a pricey repair on the property after you’ve moved in.
What does the mortgage lender say? In today's housing market, you will need to get pre-approved for a mortgage before any seller will seriously consider your bid. Once you've gone through that process, the lender will tell you how much of a loan you are eligible for given your current income and debt level. Typically, they’re looking for a debt-to-income ratio (including your mortgage as well as any other outstanding debt you might have) of less than 43 percent.
While it's helpful to know how much money you can borrow, it's important to remember that this number is not a reflection of how much money you should borrow. You'll want to consider how that monthly commitment would fit into your current budget and whether you are willing to make any lifestyle changes it might require.
Have I made a realistic budget? In addition to paying your mortgage, consider the additional new expenses that come with homeownership. A report by Zillow last year found that U.S. homeowners spend an average $6,000 per year on necessities like insurance, property taxes, and utilities. Maintenance tasks like lawn care and housecleaning can add on another $3,000 per year. Homeowners with older houses may face additional and expensive maintenance costs. And if you're buying a fixer-upper, you will need to factor in the cost of all your planned renovations. Homeowners' association fees are another big expense that many new homeowners forget to factor into their calculations. (Homeowners Associations, popular in condo communities or planned subdivisions, require monthly payments from residents to cover the maintenance of common areas.)
What other expenses do you have (or expect to have)? While your mortgage lender looks at your current financial picture, he or she does not consider whether your payment will leave you with enough money left over to pay for non-essential items like vacations, hobbies, and dining out, for example. You probably don’t want to spend so much on your home that you don't have any money to enjoy your life while you're living there, or to meet other financial goals such as saving for retirement or paying down debt.
Lenders also don't look at how future costs could impact your ability to pay for a home. If, for instance, you plan on going to graduate school or quitting work to care for children, you may want to consider buying a cheaper home now.
Article
Here's How Much It'll Cost You to Be a Wedding Guest
Celebrating a friend's nuptials can be one of your most gratifying experiences. Unfortunately, it can be one of the most expensive ones as well. If you're not careful, you can rack up debt that can last longer than you'd expect.
elebrating a friend's nuptials can be one of your most gratifying experiences, and a chance to create memories that will last a lifetime. Unfortunately, it can be one of the most expensive experiences as well. If you're not careful, it’s a chance to rack up debt that can last far longer than you might expect.
Wedding guests spent an average of $670 per wedding they attended in 2015, according to the American Express Spending and Saving Tracker. That sum included money spent on travel, new clothes, and wedding gifts. Wedding season doesn’t have to be a budget buster, though. Follow these tips to keep the spending in check:
Gift creatively.
The average guest spent just over $100 on wedding gifts last year (excluding additional outlays for shower and engagement party presents). You can spend far less than that by pitching in with friends on a large group gift or crafting a DIY present like a photo album or framed wedding invitation. Putting together a colorful themed basket with many smaller, lower-priced items (kitchen gadgets, for example, are great for this) is just another way to make a less costly present appear more impressive.
If you're buying an item from the couple's registry, log on early so that you will have a better selection among items in your price range. Look for online coupons to lower the price of your present; then have the item shipped directly to the couple's home to save on rush shipping and potential luggage fees.
Book your travel ASAP.
Couples typically can secure a discount on a limited block of rooms for wedding guests, so call the hotel early to snag that rate. If you miss it, or if it still seems high, call around to other nearby hotels and check home rental sites like AirBnB or VRBO.com to see if you can find a more reasonable option. Splitting the room or vacation rental with one or more friends can also cut the expense. If you become the point person for your group's reservation, you will have even more control over the cost of where you stay.
The best time to purchase a domestic airline ticket is about one to three months before the flight, according to a recent analysis by CheapAir.com. So book your flight as soon as you RSVP to the wedding. The more flexible you are with flight dates and time, the better price you're likely to find on airfare. Be sure to use a rewards credit card for your purchases to build up miles that can help offset future travel costs.
Dress strategically.
If you're buying new attire for the wedding, shop for a look that can do double duty at multiple events or that you could dress down for work. Be creative with accessories to give the look a little more flexibility. For weddings where you really want to flaunt your style, you may want to consider renting a dress or tux to get the look at a fraction of the price. For men with many events to attend, it might be a wise investment to purchase a tux because styles change infrequently.
It's OK to say no.
Remember that you don't have to agree to attend every wedding. Particularly for destination weddings or those of more distant friends, politely declining the invitation may make it easier for you to splurge on weddings that you really do want to attend. For those special weddings, skipping out on such ancillary events as bachelor parties and rehearsal dinners and declining to be in the wedding party can help take some of the sting out of the total cost.
Listicle
How Not to Go Broke When Planning a Wedding
Planning a wedding is undeniably exciting, but it's also notoriously stressful. Adding to that is the ever-increasing price tag. Here are 11 tips to keep costs (and stress) down.
lanning a wedding is undeniably exciting, but it's also notoriously stressful to coordinate. Adding to that stress is the ever-increasing price tag, which averaged more than $31,000 in 2014, according to TheKnot.com. Here are 11 tips to keep costs down:
1. Make a budget first. Keep expenses from getting out of hand by creating a wedding budget at the start of the planning process. Allocate a certain amount of money for each feature of the wedding (venue, food, flowers, etc.), and make that your bottom line when you start to shop.
2. Invite fewer people. The easiest way to cut costs is to trim the guest list. Time to let go of that Facebook friend you haven't seen in real life since college, and cross off your mom's second cousin once removed. The smaller your guest list, the less you'll pay for food, flowers, linen rentals—pretty much everything. You can also save with a smaller bridal party, since you’ll have to purchase fewer flowers and spend less on gifts for them.
3. Choose flowers strategically. Buy flowers that are in season, and select those flowers with larger blooms since you can buy fewer of them and still achieve a big look.
4. Skip the ‘Save the Date.’ Everyone who really matters will already have the date booked in their calendars. If it’s important for you to have other potential guests block off the time, send the announcement via email to save on printing and postage.
5. Avoid Saturday night. Since demand for wedding venues is highest on Saturday nights, booking your event for a weeknight or a Sunday can mean substantial savings. Having a daytime reception will cost less, no matter which day you choose. Your closest family and friends will re-arrange their schedules to be there no matter what, and those who can’t make it will help you trim your guest list even more.
6. Opt for food stations. Rather than passed hors d'oeuvres and a seated, plated meal, offer your guests appetizer stations and a buffet lunch or dinner. They'll enjoy more options, and you’ll have fewer servers to pay.
7. Limit the alcohol selection. Offer guests their choice of beer, wine, or a custom cocktail, rather than a full open bar. Everyone will still be able to enjoy libations without running up the liquor tab.
8. Make your own album. Ask your photographer if you can purchase the digital proofs from your event rather than buying printed photos or a pricey, glossy album. Then upload the snaps to a site like Shutterfly or Snapfish to build your own personalized album.
9. Negotiate everything. Whatever the first price may be that vendors offer you, ask whether they can do better. Explain what your budget is and see what they can offer in that range. If they're unable to provide what you want, start shopping around for someone who can, although you may be surprised at how much wiggle room there is in most opening rates.
10. Use a rewards card. Use a travel rewards card to pay for wedding costs (and pay off the balance each month). That will let you rack up miles that you can use to offset the cost of your honeymoon.
11. Honeymoon in the off-season. Traveling outside of peak season can cut the cost of your trip significantly. Booking your flight and hotel together, or being flexible with the time and dates of your trip, can also save money.