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Have credit card debt? You’re not the only one. It’s reported that 43 percent of households carry credit card debt month after month. While credit cards can be a great tool to build your credit score, they can easily impact your budget. If you’ve detoured from your financial goals and racked up a hefty bill, now is the perfect time to create a payoff plan. Use our credit card payoff calculator to see when you could be financially free.

Enter your card details to calculate your payoff timeline.


The total amount you owe on a specific debt account.

Please enter your credit card balance


The percentage amount your debt balance is charged for borrowing.

Please enter your credit card interest rate.

Choose One


Time to Payoff

30 Months

Debt-Free Date

Apr 2023

Monthly Payment

$250.00

Total Paid$7,493.77

Total Principal

$5,000.00

Total Interest

$0.00

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Tips for Paying Off Your Credit Card Debt

Paying off credit card debt can seem daunting at times. Not to mention, 62 percent of Americans have held credit card debt over the past year. Achieving debt-free status may seem easier said than done, but with the right tools, you can reach your financial goals. To nix your credit card debt, use our calculator and follow our four steps below.

1. Track Debts You Have and Which to Pay Off First

Start by listing out all your debt account balances and interest rates. From there, assess which accounts you would like to pay off first. For instance, some people like to pay off debts that have the highest interest rates to save on added expenses. Use our credit card payoff calculator to see which accounts would cost you more in the long-term.

2. See What Payments Work for Your Budget

Once you have an idea of which accounts you’d like to focus on, figure out the right payments for your budget. Keep in mind, you should still make the minimum payments on debts to keep your credit score in good shape. To calculate how comfortable you are with these payments, download our app and evaluate your budget.

3. Negotiate Your Credit Card Terms

If you have a strong credit score and loyalty to your credit card company, you may be able to negotiate your terms. For example, if you’d like your payment to be due on the 25th instead of the 10th of every month, call a representative and see what they can do. You may not always get what you ask for, but you won’t get what you don’t ask for!

4. Reprioritize Your Budget

After you get a better idea of what your budget looks like, prioritize your expenses. As your wants and needs change, adjust your budget accordingly.

Paying off credit card debt may not be as appealing as buying a new car, but it can be a more responsible financial choice depending on your situation. To ensure you’re staying on track with your biggest financial goals, always keep track of your budget using our app.

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Whether you like it or not, the buyer’s market of the past couple years or so has come to an abrupt end.

Now, sellers have the upper hand, with multiple offers streaming in and properties selling way above list.

Don’t believe me? A home in San Mateo, California, just outside San Francisco, snagged an astounding 97 offers during the first eight days it was listed.

The original asking price was $375,000, but ravenous homebuyers managed to push the final selling price to $510,000.

So no, your cover letter about it being your first family home won’t be enough to get your lowball offer accepted.

Sure, this example is absurd and extreme, but it’s happening nationwide in highly sought after areas.

I peeked at a few condos in Los Angeles and saw a similar trend – properties are typically pending within a week or so of the listing date, and selling for a decent premium above ask.

Inventory Is the Culprit

So how on earth did sellers get the power all of a sudden? Well, there are a number of reasons.

First, there isn’t any inventory. This is partially because homebuilders slowed down, and partly because existing homeowners are either underwater or unwilling to sell at rock-bottom prices.

Investors also swooped in over the past few years and bought up all the foreclosed homes at major discounts.

At the same time, homebuyer sentiment is on the up and up, and buyers are finally entering the fray, all at once.

This has to do with relatively low home prices coupled with insanely low mortgage rates, along with the expectation that things can only get better from here.

And when supply is low, and demand is strong, the frenzy begins. It appears as if everyone is simultaneously scurrying to snag a home so they don’t miss out.

The big question is will they? Do you need to buy immediately in order to get a good deal (and a good rate on your mortgage)?

Spring Buying Season Starts Now

While inventory is nowhere close to historic levels, it should pick up nicely over the next few months during the spring buying season.

Most properties get listed in March through May, so there will plenty more to choose from if you can wait a month or two.

The number of new listings may be even more pronounced thanks to this well-documented buying frenzy.

At this point, prospective sellers know demand is strong, and for many who were holding out, this could finally be the time to throw up the for sale sign.

After all, plenty of homeowners who were underwater for many years are finally breathing again, and the kneejerk reaction is to sell the minute you get the chance.

This could spell opportunity for those looking to buy – just note that some of these existing homeowners will need a place to live as well, and may be competing with you when you make your offer.

How to Make a Strong Offer on a Home

I’m not big on cover letters and “getting to know the buyer.” I think a strong offer is one that has the best chance of closing.

That said, it’s not about gimmicks. It’s about numbers. Make the listing agent like you, not the seller. After all, they’re the one who stands to make a tidy commission.

The agent will make the seller like you and your offer if you present it properly.

Get Pre-Approved

At the moment, those who prove they can actually qualify for a mortgage will get first dibs (after cash buyers).

This means obtaining a legitimate pre-approval letter and getting all your ducks in a row before even looking at a property.

Determine the maximum loan amount you qualify for and focus your search on properties you’ll be able to afford, even if they go above asking price.

In the past, you may have been able to bid under list, which would expand your pool of eligible homes. Now, it’s quite the opposite.

Don’t waste your time on homes you won’t be able to afford if a bidding war ensues.

Tip: If the buyer wants you to get a pre-approval with their preferred lender, do it immediately. You don’t need to use them, but it’s an act of good faith to do as they say as quickly as possible.

Provide a Large Down Payment

Assuming you can’t go all cash, bringing in a large down payment is another way to show sellers you’re a serious candidate.

We’re talking 20% down or more, not 3.5% on an FHA loan. Buyers who can’t do at least 20% probably won’t have a chance if there are multiple bidders, even if your offer is high in price.

Sellers (and their real estate agents) know mortgages are harder to qualify for these days, and those who put down more increase their chances of approval.

This is also advantageous in that you avoid paying mortgage insurance, which will keep your mortgage payment down.

For the record, going with a conventional loan vs. an FHA loan may also work in your favor, as there are generally less restrictions with regard to the property itself.

Earnest Money and Contingencies

Along with down payment is the earnest money deposit, which is a deposit made with the offer that shows you’re serious about purchasing the property.

If you can’t or are unwilling to put up a decent size deposit, the sellers may not think you’re as earnest, or as qualified as you say you are.

Your real estate agent will be able to determine what’s large enough to ensure you appear as strongly as possible.

Additionally, make sure you keep important contingencies in the contract, such as a home inspection and the ability to obtain mortgage financing.

It may be tempting to forego some of these to make your offer stronger, but you’ve got to draw the line somewhere.

Just note that contingencies related to selling your current home, in order to buy a new home, will likely be frowned upon and could cost you the deal.

Use a Good Real Estate Agent

This sounds like a no-brainer, but not all real estate agents are created equal. Make sure you’re working with one with lots of experience.

During a buyer’s market, it doesn’t matter as much – after all, a property sitting on the market for months will make for easy pickings.

But when there are multiple offers, you need a seasoned agent that knows what it takes to get the job done.

Even one misstep could be enough to miss a great opportunity. Your agent should be on top of all new listings (and even pocket listings) and good at communicating with the listing agent.

Be Prepared to Close Quickly

Another tip to make your offer stronger is keeping the escrow period short. If you can agree on a 30-day escrow, as opposed to 45 or 60 days, your offer will probably be more attractive.

Just note that lender backlog is a huge issue right now, so closing on time will be a lot more difficult.

However, if you prepare yourself for financing and tackle any possible surprises before applying, it should make for smooth sailing.

A shorter escrow period also means a shorter mortgage rate lock, which could save you money if you don’t float your rate.

So there’s a benefit there as well, and an even bigger one if rates continue to rise as things heat up.

Finally, remember to be realistic. Even though it may be very tempting to buy a home right now, there are still plenty of risks.

Heck, you could overpay for a property or wind up with a money pit if you don’t do your due diligence.

Work quickly, but don’t cut corners.

Read more: Tips for first-time home buyers.

Source: thetruthaboutmortgage.com

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Me: “Who helped you select the funds in your 401(k)?”

Client: “Ummm…..I just picked a few options really quick.”

Me:  “How much time did you spend researching what you picked?”

Client:  “I didn’t.”

Me:  <sigh>

This sort of exchange happens more often than it should.  What most investors don’t realize is that at some point, your 401(k) will most likely be the largest income-producing asset you own.

Sure your home could be worth more, but; the last time I checked your home doesn’t send you a monthly check when you retire.

There are several reasons why 401(k)s make sense for so many people. But the primary reason you should take advantage of your 401(k) is that once it’s set up there’s nothing much left to do (except the occasional review as I’ll discuss).

Your 401(k) can be automatically funded using your earnings at your job – you won’t have to remember to make contributions.

However, there are some 401(k) no-no’s I think you should avoid. And the sad part is that many people make these mistakes…don’t become one of them.

1. Not Saving at All in a 401(k)

If you have a 401(k) available to you and you haven’t taken advantage of it . . . why not? Again, once you have it set up, there’s not much left to do.

 

Investing within a 401(k) will help you automatically save for retirement without hardly thinking about it. Before you even have access to your spending money from your paycheck, your 401(k) contribution will be made. Easy peasy.

You need to start investing for retirement. Unless, of course, you like the idea of living on Social Security payments alone (that’s a scary prospect). Even if you’re wealthy, why not save even more for the future?

2. Just Saving Enough to Get the Match

Some employers offer a match up to a certain percentage of your contributions into a 401(k). This is a fantastic benefit you should certainly use – but you shouldn’t stop there.

Chances are you should invest more money into your retirement than what your employer will match in your 401(k). It would be a good idea to research how much money you need to retire and consistently contribute to that amount.

3. No Match, No Savings

Employers are not required to match your 401(k) contributions. If your employer isn’t matching your contributions, should you just skip investing into your 401(k)?

No. Of course not!

Remember, the 401(k) is a great way to automatically make contributions toward retirement. Take advantage of this super easy way to invest your money. It’s still worth it.

4. Investing Purely Into Target Date Funds

To put it lightly, I rather dislike target date funds. Many times, you’ll find target date funds as options within your 401(k).

Target date funds are funds that usually have a year at the end of the name – the year you might like to retire. The idea is that you choose a target date fund that targets the year you’d like to retire, invest in that fund, and watch that portfolio shift from an aggressive strategy to a conservative strategy.

This sounds dandy, but the problem is that the mutual funds within these target-date funds are usually pretty cruddy. How so? Here are two downsides you’ll often see:

  • High fees – The mutual funds just have outrageously high fees that are going to take money from you that you could have used to invest.
  • Weak performance – The mutual funds do pretty poorly when compared to other mutual funds or market benchmarks.

William Baldwin, a contributor for Forbes.com, writes:

Whoever is buying the [target retirement] funds would not be at the genius level. They have not figured out that they are getting ripped off.

When you invest in your 401(k), do your homework and find out about your investment options – don’t let your employer’s default choice be your choice unless it’s a good one (it probably isn’t).

 

5. Not Getting Professional Help Choosing Your 401(k) Investments

Okay, so if you’re supposed to pick the investments in your 401(k), how do you know which ones to choose? It’s best to hire a professional.

A good financial adviser can drill down into the specifics of the investments within your 401(k) and point out ways to improve your portfolio – and show you which funds you should avoid like the plague.

Don’t go it alone. Get good help and you’ll save more and earn more.

6. Asking Your Coworkers for Help Choosing Your 401(k) Investment Options

I can assure you that most of your coworkers haven’t given much thought into the funds within their 401(k). Get professional help, not the off-the-cuff recommendations of those who don’t live and breathe investments on a day-to-day basis.

Unfortunately, you might find yourself pressured to choose investments within your 401(k) during work when you need to be working, not making decisions about your long-term future.

Instead, spend some free time after work to sit down with a financial adviser who knows their stuff.

7. Not Reviewing Your 401(k) Plan Consistently

While the 401(k) plan is a great way to ensure contributions are made by having them come directly out of your paycheck, that doesn’t mean you can sit back, relax, and forget about your 401(k) altogether.

Instead, you need to review your 401(k) plan on a regular basis.

Should new funds become available within your 401(k), you’ll want to know about them and consider them as potentially better options for your investments. You’ll also want to consider the volatility of your investment mix as you get closer to retirement.

8. Borrowing from Your 401(k)

Borrowing from your 401(k) is definitely a no-no. I say this for two reasons:

  • You’ll make less money – Money not invested is money that’s not earning money. Taking money out of your 401(k) defeats the whole reason you put it in there in the first place!
  • You might find yourself paying extra penalties and taxes – If you don’t have enough money to pay back your 401(k) loan in time, your unpaid balance will be considered a distribution. That means you’ll be looking at a 10% penalty in addition to higher income taxes.

John Wasik, a contributor for Forbes.com, writes:

Repeat after me: My 401(k) is not a piggy bank, nor is it a good source of cash.

Don’t borrow from your 401(k). You should have an emergency fund in place for emergencies.

9. Market Timing With Your 401(k) Investments

Your 401(k) is a great long-term investment vehicle – but not something you should play around with as the market fluctuates.

 

Find the right funds with the help of a professional, reevaluate your funds from time to time, but whatever you do don’t let your emotions dictate your investment decisions.

10. Making Terrible 401(k) Decisions When You Leave Your Job

When you leave your job, whatever you do, don’t cash out your 401(k). Remember those penalties and tax implications if you take a 401(k) loan and don’t pay it back? Well, the same applies here.

However, I would encourage you to consider a Roth IRA conversion with your 401(k) after you leave your job.

Not only will that open up many more investment options than your old employer gave you, but throughout the process, you’ll learn a great deal about how investments work. Note, however, that while it’s worth considering, it’s not always the right thing to do.

Talk with a financial adviser to determine if a Roth IRA conversion is right for you.

401(k)s are a wonderful investment choice as long as you avoid all these no-nos. Do your research, invest with intentionality, and you’ll be just fine.

This post originally appeared on Forbes.com.

Source: goodfinancialcents.com

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There’s been speculation pretty much ever since the last cut that the FHA would lower insurance premiums once more.

And the rumor mill has been really busy the past few weeks, signaling a possible cut in the next month or so.

The latest rumor comes via a bulletin from Inside Mortgage Finance, which revealed that industry chatter points to a 25 basis point cut in FHA premiums after the presidential election in early November.

That means the typical FHA borrower who puts down 3.5% and takes out a 30-year fixed mortgage will pay an annual MIP of 0.60%.

The decrease would return annual premiums to just above their pre-crisis levels of 0.55%, which would make perfect sense given the fact that we are now well beyond the most recent crisis and back to square one for the most part.

In case you haven’t been keeping score, the FHA’s annual MIP was 1.35% before the 50 basis point drop in early 2015.

Actually, it was as high as 1.55% if you had a loan amount above $625,500 and an LTV north of 95%.

But this rumored change will bring things back down to earth.

The argument for the change is that the FHA’s Mutual Mortgage Insurance Fund has been beefed up thanks to the higher premiums collected over the past few years and lower mortgage defaults during that span.

Is It Enough to Justify a Refinance?

While the change will be welcome news to most, it may not sway the decision to refinance.

The 25 basis point change on a $200,000 loan would amount to annual savings of roughly $500.

Currently, such a borrower would be paying about $142 per month in MIP costs. It would drop to $100 with the change.

The problem with FHA is the upfront MIP, which is set at 1.75% and probably not going to change.

If you refinance from an existing FHA loan into another FHA loan, you might be entitled to a partial refund of the upfront premium if the loan isn’t older than 36 months.

If you can snag a lower mortgage rate in the process, the argument is a lot more compelling. For some, just paying a lower MIP might be enough, assuming their loan isn’t very old and much of the upfront premium can be recouped.

Another problem with FHA loans these days is the fact that mortgage insurance is in force for the life of the loan, instead of just the first five years or once the LTV drops to 78%.

That’s why it often just makes sense to refinance out of the FHA and into a conventional loan if your LTV dips to 80% thanks to recent home price appreciation. You can avoid the mortgage insurance entirely and get a similarly low interest rate.

FHA Premium Cut Is Good News for New Home Buyers

Of course, the change will be great news for those looking to purchase homes with FHA financing.

As noted, savings of nearly $50 per month for relatively small loan amounts is nothing to sneeze at. And it just gets better as your loan amount rises.

Aside from the savings, it could help more borrowers qualify with lower monthly payments that could push the all-important DTI ratio to acceptable levels.

It will also make the case for an FHA loan vs. a conventional loan more interesting. You’ll still have to do the math to see which type of loan is best for your situation.

And remember, this is just a rumor. It’s not fact yet. But if it does happen, it’s supposedly going to take place after the election. Of course, the decision could be swayed by the outcome.

Source: thetruthaboutmortgage.com

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Debt-to-Income Ratio Overview

Your debt-to-income ratio, or DTI, is your total monthly debt payments divided by your total monthly gross income. DTI ratio is one of the criteria lenders use to determine whether you can realistically pay back a loan. As a general rule of thumb, you want to have a DTI ratio between 35% and 50%.

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If you’ve been shopping around for a mortgage, then you’ve probably run into the term “debt-to-income ratio”. This can be a confusing term for someone with limited knowledge when it comes to finance. But, when you apply for a major loan, your debt-to-income ratio can have a significant impact on whether or not a lender approves your application. 

So knowing what a debt-to-income ratio is, and how to calculate debt-to-income ratio, is essential if you plan on taking out a mortgage or any other major personal loans in the near future. In this article, we’ll cover the following questions and topics: 

  1. What is a Debt-to-Income Ratio? 
  2. How to Calculate Your Debt-to-Income Ratio 
  3. What is an Ideal Debt-to-Income Ratio? 
  4. What is the 43% Rule? 
  5. Does Your DTI Ratio Impact Your Credit? 
  6. How to Improve Your DTI Ratio 

What is a Debt-to-Income Ratio? 

A debt-to-income ratio, or DTI ratio, is a metric that measures an individual’s gross monthly income against their total monthly debt payments. What your DTI ratio ultimately represents is the percentage of your monthly income that is used to pay off your outstanding debts. 

This ratio is commonly used by lenders to evaluate potential borrowers, determine whether or not they’re able to take on additional debt, and assess the likelihood that they will be able to repay a loan. While a low DTI ratio indicates that you have been able to manage a healthy balance between debt and income, a high DTI ratio indicates the opposite—namely, that you owe a high amount of debt relative to your income, likely aren’t able to save much money each month, and are essentially living paycheck to paycheck. 

Now that you have a foundational understanding of DTI’s meaning and application, let’s dive a bit deeper.

What Factors Make Up Your DTI Ratio? 

The sum of your monthly debt payments includes credit card payments, your mortgage, child support, alimony, and any other loans you may have taken out. However, some recurring monthly payments aren’t included in your DTI ratio. According to moneyfit.org, you shouldn’t factor in non-debt payments such as:

  • Insurance premiums
  • Phone bill
  • Childcare expenses 
  • Home utilities, such as your electric, heating, water, sewer, and trash bills 
  • Gym membership 
  • Music, cable, and streaming subscriptions 
  • Internet bill 
  • Landscaping costs 
  • Storage unit rent
  • Income tax 

Your gross monthly income is just your monthly pay before things like taxes and other deductions are taken out. Some common types of income that are factored into your DTI ratio, are as follows: 

  • Gross income, whether hourly or salaried 
  • Tips and bonuses
  • Any income earned from a side gig
  • Pension income
  • Rental property income 
  • Self-employment income 
  • Social Security benefits
  • Alimony received
  • Child support received

How to Calculate Your Debt-to-Income Ratio 

Learning how to figure out your debt-to-income ratio is a valuable skill that can help you with more than just your mortgage applications. We’ve provided step-by-step instructions for how to calculate your DTI below.

You can calculate your debt-to-income ratio by dividing the sum of your monthly debt payments by your gross monthly income. Once you figure out your total monthly debts payments and add up your gross monthly income, you’ll be ready to divide those numbers and calculate your DTI ratio. 

Dividing your monthly debt payments by your gross monthly income will give you a decimal number. In order to view your DTI as a percentage, you’ll have to multiply the decimal outcome by 100. 

Example Calculation 

To get a better understanding of how to calculate your DTI ratio, let’s take a look at a fictional example.

Here’s the situation: Mike has a gross monthly income of $5,000. He pays $1,000 on his mortgage, $400 for his car, $400 in child support, and $200 for other debts. 

So, following the equation above to calculate Mike’s DTI ratio, we end up with: 

$1,000 + $400 + $400 + $200 = $2,000 

Therefore, Mike’s DTI ratio = $2,000 / $5,000 = 0.4 x 100 = 40% 

What is an Ideal Debt-to-Income Ratio?

In general the lower your debt-to-income ratio is, the more likely it is that you’ll be approved for a loan you’re applying for. According to incharge.org, DTI ratios that fall between zero to 35% are considered healthy according to the standards of most major lenders, since they indicate that your debt is at a manageable level relative to your monthly income. 

So what is a bad DTI ratio? Having a DTI ratio of 50% and above is considered an unhealthy level of debt in most cases, and can severely limit the kinds of loans you qualify for. Such a high ratio indicates that you likely don’t have much money to save or spend each month after making your current debt payments.

What is the 43% Rule?

The 43% rule is a rule of thumb used by banks and lenders to determine who is able to be approved for a Qualified Mortgage. Generally speaking, 43% is the highest DTI ratio you can have in order to be approved for a Qualified Mortgage by a lender. 

If you’re unfamiliar with what a Qualified Mortgage is, it’s a category of loans that meet a particular set of standards and certain safety features that protect both the borrower and the lender. In order for a lender to offer you a Qualified Mortgage, they must adhere to certain requirements and make a good faith effort to evaluate your finances and determine whether you’ll be able to repay the loan or not. 

The upside of a Qualified Mortgage is that it has a number of parameters in place that are supposed to help prevent you from taking out a loan you can’t afford. Some of the requirements for a Qualified Mortgage include:

  • The restriction of risky loan features, such as interest-only periods and balloon payments 
  • A limit on your debt-to-income ratio, the maximum typically being 43%
  • Caps—dependent on the size of your loan—on the amount of upfront points and fees a lender is able to charge 
  • Legal protections for lenders, since it’s assumed that they did their due diligence to ensure you had the ability to pay back your loan
  • Maximum loan term is required to be no longer than 30 years  

All of this isn’t to say that you can’t take out a mortgage at all if your DTI ratio exceeds 43%. You may still qualify for other mortgages with a high DTI ratio, but you generally won’t be able to get approved for a Qualified Mortgage. 

Does Your DTI Ratio Impact Your Credit?

While your DTI ratio has no direct impact on your credit score and won’t show up on your credit report, it can affect your ability to secure loans from banks and other lenders. A low DTI ratio increases the likelihood that you will be approved for the loans you apply for. That’s because lenders take a low DTI ratio as a sign that you are competent when it comes to money management and they can rely on you to pay back any debt you accrue according to the agreed-upon terms. Lenders also take a loan applicant’s DTI ratio into consideration because they want to ensure that borrowers aren’t taking out more debt than they can realistically pay back. 

Although a lower DTI ratio typically makes it easier to get approved for a loan, keep in mind that it’s only one out of many factors that lenders take into consideration. When evaluating a mortgage loan application, lenders will also take a look at a potential borrower’s gross monthly income, the amount they can afford on a down payment, their credit history, and their credit score. 

How to Improve Your DTI Ratio 

There are two variables that go into calculating your DTI ratio—your total monthly debt payments and your gross monthly income. Therefore, to improve your DTI ratio you’ll need to either reduce your total monthly debt payments or increase your gross monthly income. 

Reduce Your Monthly Debt Payments 

Completely paying off debts is a great way to lower your monthly debts payments, but of course this is much easier said than done. Your first step should be to take a look at any loans you’ve already taken out and your current credit card debt and come up with a comprehensive repayment plan. For example, check out our money tips for recent college grads to get some advice on how to formulate a repayment plan for your student loans.

To avoid going further into debt, you should also make an effort to work on your personal finance skills. Try creating a monthly budget for yourself that can help you prioritize essentials, track your spending, and save money, made easy when you use the Mint app.

If you’ve already done some research on how to lower your monthly debt payments, you may be asking yourself, “Is debt consolidation a good idea?” Debt consolidation is when you combine all of your various debts together into one monthly payment with a fixed interest rate, and it may be a good idea depending on your circumstances. 

If you don’t think you’ll be able to make a payment on one or several debts, then you can potentially avoid a late payment by consolidating that debt. However, you must have good credit to get approved for a debt consolidation loan and you should be certain that your financial situation will improve in the near future. If you don’t think you’ll be able to pay back your debts, even with debt consolidation, then you’d likely be better off trying to settle the debts directly with your creditors.

Increase Your Gross Monthly Income

Just like reducing your monthly debt payments, increasing your gross monthly income is a lot easier said than done. After all, it’s not every day that you’re given a raise or offered a job with a high-paying salary. Nevertheless, there are still ways to potentially increase your gross monthly income. Research passive income ideas or check out these examples of things you can do to make a little extra money:

  • Take up a side hustle, such as driving for a ride share company, taking on freelance writing projects, babysitting, etc. 
  • Rent out an extra room in your home (if you have more than one property, consider turning one of them into a vacation rental) 
  • Get a relevant certification or license that would either increase the salary of your current position or help you find a new, higher-paying job 
  • If possible, try to pick up more shifts or get extra hours at work

If you’re in the market for a sizable loan, such as a mortgage loan, you’ll have an easier time securing financing with a lower debt-to-income ratio. If your DTI ratio is higher than 43%, then you might consider waiting to purchase a home until you can lower that number and qualify for a better loan. You should generally try to keep your DTI ratio as low as possible even when you aren’t shopping around for loans. This means minimizing your monthly debt payments and maximizing your gross monthly income—two things that can be hard to achieve, but not impossible. Having a well-thought-out personal finance strategy will make it easier to achieve these goals, keep your DTI ratio consistently low, improve your overall financial health, and provide both you and potential lenders with a sense of financial security. 

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Source: mint.intuit.com

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Let’s face it. Here in America, a car is not a luxury, it’s a basic necessity. With our wide-reaching cities and the harried schedule of our modern lives, the comfort, flexibility and privacy offered by the modern automobile is both an essential part of life, and a little slice of heavenly peace to brighten each day.

As a teenager, you fell in love with your first taste of four-wheeled freedom. As you moved through college and adulthood, you surely upgraded to models a little more befitting of your status. So now here you are in your late 20s, with a blossoming career and car to go with it. Whether it’s an Audi or BMW, Lexus or Infiniti, your ride tells the world who you are: your taste, your status, and your individuality.

Until that magic moment when all of this flies out the window: you have a baby on the way!

Suddenly, there’s more to be concerned about that simply style and performance. You’ll need to accommodate car seats, soccer balls, and strollers. You’ll need to load shopping bags from the mall into the back with a wriggling child or two in each arm. Family life means driving on snow and dirt, and hauling your trailers and toys. And above all, you’ll need the safest vehicle to protect your new precious cargo. This means 4-wheel-drive and superior crash protection.

In short, if the diagnosis is pregnancy, the prescription is SUV.

Luckily we’re on the job for you here at Mr. Money Mustache. I collected the best SUVs on the American market and compared them side-by-side to pick a winner.

2014 Toyota Sequoia Platinum

With seating for 8, the $60,795 Sequoia does it all. Featuring a fully boxed load frame, a responsive 381 horsepower 5.7L V-8 engine, and a 5750lb curb weight, this family hauler is nimble, capable, and luxurious. With fuel economy of 13MPG around town and as high as 18MPG on the highway, it can help your family’s dollar stretch just a bit further, and who doesn’t need that these days?

2014 Ford Expedition Limited EL

Sure, it’s big, and it’s fast, with specs rivaling the Sequoia at the budget friendly price of $51,695. But what really sets the Expedition apart is the perforated heated and cooled front leather seats! What could be a better respite from a pounding day of errands than a cushion of climate-controlled air that soothes you back to sanity? Fuel efficiency is just as good at 13/18 for the 4WD model. Also sold as the Lincoln Navigator, with an even more distinctive selection of luxury appointments.

2014 Chevrolet Suburban LTZ

It’s everything you’ve come to expect from a large SUV and so much more. High intensity headlamps and foglamps, Front Park Assist, 12-way seats, Side Blind Zone Alert with Lane Change Assist, all powered by an EcoTec 5.3L V-8 with the ability to tow 8,000 pounds. Eco-Tec means you’re actually helping the environment as you cruise your way through each 33.5 gallon (126 litre) tank of fuel! But if all that tech-talk makes your eyes glaze over, let’s just put it this way: A very sweet ride that will be the envy of your block, with 16 cupholders for only $62,595! Also sold as the Cadillac Escalade with a more prestigious front grille for only a few thousand more.

2014 BMW X5 50i

For those with smaller families and a higher demand for performance, the venerable X5 may fit the bill. Featuring a 4.4 liter twin turbo V-8 that pours 450 horsepower into this SUV’s lightweight 4950 pound figure, the X5 will scream from 0-60 in about five seconds, smoking all four of its 19″ performance tires in the process. But with heated leather seating for 7 and available personal video screens for each passenger, your lucky children might not even notice what you’re up to.

Starting at under $70,000 with the Mocha Interior Design Package and the Executive Package, the X5 gets my personal vote for the best vehicle to prepare for baby. If cash is a little tight, BMW’s financing and lease packages can have one of these safe and roomy vehicles in your driveway for as little as $789 per month.

Although having your first baby is a challenging experience that will require many costly purchases, I hope I’ve at least helped with the most critical decision of all: what to drive.*

*Oh, and happy April Fool’s Day. The best family vehicle is a pair of bikes for the parents, each pulling a bike trailer. Second choice is a good small car (you can get kid seats that fit 3-across even in compact cars). And if you REALLY need something to carry a lot of people, get yourself a 2007 Mazda5 with a 4-cylinder engine and a 5-speed manual transmission. It comfortably carries 6 adults (tested it myself), burns a reasonable amount of gas, and is not a gigantic Douchewagon that will get you punched in the face by passing Mustachians. Just don’t buy one and then use the damned thing for single-person commuting!

Source: mrmoneymustache.com

Apache is functioning normally

It’s not yet clear if we’re in for another “sold-out summer,” but it’s clear that we’re in for an expensive one — at least on the airline side.

If you’re searching for summer flights, chances are you’ve run into some serious sticker shock.

Fares for flights across the board are more expensive than they have been since the pandemic began, and in many cases, they are passing pre-pandemic summer levels.

Want more airline-specific news? Sign up for TPG’s free biweekly Aviation newsletter.

There are two main factors driving prices up, and both mean that if you’re planning to get away while the weather is warm, you might want to finalize your plans on the sooner side.

Fares are higher and demand is surging

For myriad reasons, airlines are simply charging more for flights this summer than they have in the past.

Data provided by the Airlines Reporting Corporation, a travel intelligence firm and ticket processor, shows that fares have largely risen across the board for flights this summer compared to both 2022 and 2019, the last full year before the pandemic.

The average price of fares for the top 10 summer travel destinations was 9% to 37% higher than in 2022, according to ARC’s data.

Prices increased even more compared to 2019, with average fares for each destination climbing between 23% and 54%.

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Rank Destination (airport) Average ticket price Change vs. 2022 Change vs. 2019
1. Cancun International Airport (CUN). $599. +10%. +40%.
2. Seattle-Tacoma International Airport (SEA). $478. +31%. +38%.
3. Orlando International Airport (MCO). $425. +12%. +36%.
4. Rome Fiumicino Leonardo da Vinci Airport (FCO). $1,683. +13%. +44%.
5. Los Angeles International Airport (LAX). $525. +37%. +51%.
6. Daniel K. Inouye International Airport (HNL). $787. +23%. +23%.
7. Heathrow Airport (LHR). $1,662. +15%. +54%.
8. Boston Logan International Airport (BOS). $456. +19%. +39%.
9. Punta Cana International Airport (PUJ). $790. +17%. +24%.
10. Harry Reid International Airport (LAS). $471. +9%. +47%.

The data reflects tickets sold in the U.S. and processed through ARC’s systems between Jan. 1 and April 6, 2023, for travel during the summer season — between Memorial Day and Labor Day.

Demand is higher than it has been since the pandemic began. Even as airline capacity broadly remains slightly below 2019 levels, a supply-and-demand mismatch is driving prices sky-high. In fact, the U.S. Travel Association, an industry trade group, says domestic leisure demand has surpassed pre-pandemic levels.

ARC’s chief commercial officer Steve Solomon told TPG that the supply-and-demand asymmetry is the main driver of high prices.

“Increased demand is partly driving more expensive airfare as we’re seeing ticket transactions for the top summer destinations up year over year,” Solomon said. “Demand, coupled with other factors including increased labor costs, jet fuel up around 40% year over year, and not every airline operating at 2019 capacity levels, all contribute to higher prices paid by travelers.”

People are booking their vacation flights earlier

Alongside the increase in demand is a return to a pre-pandemic norm — leisure travelers are making their plans further in advance.

During the first two post-vaccine summers, travelers tended to finalize their plans only at the last minute. Uncertainty surrounding case outbreaks, personal illness or infection, travel restrictions and more made consumers wary about committing early. This was particularly true if reservations were nonrefundable or could only be canceled in exchange for a credit.

Plus, business travel was still significantly down. With business travelers more inclined to book close-in flights and typically less sensitive to prices than vacationers, airlines raised fares as departure dates moved closer. With the leisure booking curve shortening, those last-minute prices tended to look more palatable.

Now, airlines are seeing that leisure booking curve elongating again. Coupled with the high demand, that has made for some intense booking cycles.

For instance, Delta Air Lines said earlier this month that about 75% of seats on international flights this summer were already booked. Many of those bookings were made in February and early March: At a JP Morgan conference on March 14, Delta CEO Ed Bastian noted that the airline was experiencing record-breaking ticket sales.

“In the last 30 days, we’ve had the 10 highest sales days in our company’s history,” Bastian said.

“People remember last spring and summer, how hard it was to get those trips that they wanted to go on,” he added. “So we’ve seen a little bit of a pull forward in terms of the advanced bookings.”

United, too, has seen “a clear change in seasonality that is causing peak leisure demand months, March through October, to be even stronger,” CEO Scott Kirby said during an earnings call this month.

“Both international and domestic are booking further out. International more extreme than domestic,” United executive vice president Andrew Nocella added.

ARC’s data confirms that people are booking earlier, particularly for international trips. In March, the number of tickets sold for each of the top 10 European destinations increased dramatically over 2022:

Rank Destination (airport) Year-over-year change in tickets sold
1. Rome Fiumicino Leonardo da Vinci Airport (FCO). +82%.
2. Heathrow Airport (LHR). +63%.
3. Paris-Charles de Gaulle Airport (CDG). +66%.
4. Athens International Airport (ATH). +52%.
5. Josep Tarradellas Barcelona-El Prat Airport (BCN). +86%.
6. Istanbul Airport (IST). +183%.
7. Dublin Airport (DUB) +10%.
8. Amsterdam Airport Schiphol (AMS). +130%.
9. Adolfo Suárez Madrid-Barajas Airport (MAD). +70%.
10. Keflavik International Airport (KEF). +74%

That increased demand in Europe, plus earlier bookings, can also reflect greater consumer confidence over 2022. Gas prices are remaining lower, and there are fewer fears of Russia’s conflict in Ukraine spilling over to other parts of Europe.

For the top 10 U.S. domestic destinations, the changes compared to 2022 were more mixed, reflecting shifting travel preferences domestically and likely greater confidence in travel abroad:

Rank Destination (airport) Year-over-year change in tickets sold
1. Seattle-Tacoma International Airport (SEA). +52%.
2. Orlando International Airport (MCO). -18%.
3. Los Angeles International Airport (LAX). -1%.
4. Daniel K. Inouye International Airport (HNL). -6%.
5. Boston Logan International Airport (BOS). +11%.
6. Harry Reid International Airport (LAS). -11%.
7. O’Hare International Airport (ORD). +11%.
8. San Francisco International Airport (SFO). +2%.
9. Denver International Airport (DEN). -1%.
10. John F. Kennedy International Airport (JFK). +12%.

Early planners have already snatched up the cheapest fares, and those that are left are pricier.

Looking ahead and planning your summer vacation

Still, there may be good news ahead, according to Hayley Berg, lead economist at flight-booking service Hopper — but it depends on where you want to go.

Fares for domestic flights in July have decreased slightly in recent weeks, Berg said. She noted a pattern that seems “typical of normal summer pricing, which starts high in late winter and early spring, drops in April/May before rising in the last month or so ahead of departure dates.”

While overall average domestic fares for June and July are roughly 7% below 2022 levels, they remain 16% higher than they were at the same time in 2019. Berg said that she expects those prices to remain steady before spiking two to three weeks before departure.

However, if you’re looking to pay lower fares to fly abroad, you may be out of luck, Berg said.

“International airfare remains significantly higher than pre-pandemic given low supply of seats, high demand and overall higher costs, including high jet fuel prices,” Berg said. A report by Hopper forecast airfare to Europe over the next six months to be 24% higher than pre-pandemic, on average. Fares to Asia are expected to surge around 60%.

Even so, there are still sporadic deals, according to Katy Nastro, a travel expert at flight-deals subscription service Going.com.

“Airfare is volatile, and so prices you see today don’t necessarily reflect what you see tomorrow,” Nastro said. Even as prices climb on a particular flight or deal, “that doesn’t mean the flight won’t drop again — as we know airfare isn’t static — but the likelihood of it dropping majorly … is less.”

If you’re hoping to take a trip this summer and haven’t found anything for the right price yet, don’t lose hope: Stay tuned to TPG for the latest flight and hotel deals, as well as everything you need to know about traveling this summer.

Related reading:

Source: thepointsguy.com

Apache is functioning normally

Last Friday, I attended a workshop put on by Pamela Slim, who writes about entrepreneurship at Escape from Cubicle Nation. Before this meeting, I didn’t know much about Slim or her message, but her work came highly recommended from my friend, Chris Guillebeau. “Pam is the real deal,” he told me. “Her book is what a lot other books have tried to be.”

Based on this recommendation, I drove to hear Slim speak. I was impressed. Chris is right: She’s the real deal. I was so impressed, in fact, that I spent the weekend reading her book, which is also called Escape from Cubicle Nation.

Opening Up to Opportunities

Escape from Cubicle Nation starts at the beginning of the entrepreneurial journey: deciding what to do with your life. Slim spends several chapters discussing how to get in touch with what’s important to you. At times, this almost seems touchy-feely. Almost.

Even if you currently have no intentions to quit your job, Slim’s advice can help you protect yourself from future layoffs. She recommends:

  • Developing a wide social network
  • Investing in personal development
  • Pursuing a small business on the side

Slim advocates a philosophy of “life first, business second”. By becoming clear about what you want from life, what your ideal life contains, you can craft an entrepreneurial vision that helps you to pursue this goal.

Slim says that it’s important to choose work you’re passionate about. She cites the “sweet spot” described by Jim Collins, which is the place these three sets of skills overlap:

  • What people will pay you to do
  • That for which you have great passion
  • That which you are “genetically encoded” to do

In my case, that seems to be blogging. For you, it’s going to be something else. It may take time to find that “something else”, but when you do, you’ll be ready to create a business plan.

The Reality of Entrepreneurship

“Hating your job intensely is not a business plan,” Slim writes in the book’s introduction.

Although I think it is a tremendous idea to work for yourself and live a life of happiness and financial success, I don’t believe that is possible to become an overnight sensation with a few magic techniques or systems.

Slim doesn’t candy coat things. While she encourages readers to pursue their dreams, she admits that the path is often difficult. She also offers “a few horror stories for good measure”, real-life examples of how things can go wrong. She wants her readers to escape from corporate environments, but she wants them to have realistic expectations.

Escape from Cubicle Nation also covers topics like:

  • Drafting a business plan
  • Building and using a social network
  • Lifestyle design
  • Developing a personal brand

There are a lot of buzzwords in that list, but Slim handles each topic thoughtfully, with examples that readers can relate to. (Rachael Ray, for example, is a perfect example of personal branding.)

Make the Money Work

“Nothing will cause you more pain than ignoring the financial side of your business,” Slim writes. “Not horrible sales calls, crashed laptops, surly employees, or even bad press. When the financial side of your business is not working, life is miserable.”

To begin, however, your personal finances must be in order. Slim offers solid advice (the sort you’re used to seeing on Get Rich Slowly), and encourages readers to have realistic expectations about their financial situations. (This section even excerpts an underrated GRS post about facing and fighting financial trolls.)

There’s also a chapter on benefits for the self-employed, including health insurance.

Making the Leap

It’s one thing to draw up a business plan and to embrace the idea of entrepreneurship, but it’s another thing to actually make the leap. It can be scary to quit a safe job to pursue the unknown. In the final section of her book, Slim offers advice for smoothing the transition.

First, she tells readers to expect resistance from the people they know. “You are crazy if you think you can convince all your friends and family that starting a business is a good idea,” Slim writes. She provides techniques for handling common questions, and she stresses the importance of open communication with your spouse or partner.

Finally, Slim provides some pointers for getting organized — and deciding when it’s time to leave your job, to escape from cubicle nation.

Conclusion

I thought Slim’s workshop last Friday was great, and not just because of her content. I was impressed with the dynamic people in attendance. The flood of tips, ideas, and experiences was inspirational.

But Escape from Cubicle Nation — the book — is even better. Some people might be put off by how often she quotes from other sources. Not me. I love it. I like that she synthesizes advice from a variety of books and blogs to give the readers the best information possible. I wish more authors did this.

If you think Escape from Cubicle Nation might be useful for you but aren’t quite sure, you can give Pam Slim’s ideas a test drive at her blog. (Slim has also made the first chapter of the book available via PDF.) Based on the number of Get Rich Slowly readers at the workshop last Friday, it seems that many of you are looking to escape your corporate jobs to pursue your passions. That’s awesome.

Source: getrichslowly.org

Apache is functioning normally

Patios provide more than additional square footage to your home. They also enhance the design of any house and add to the curb appeal, meaning any improvement you make can turn out to be a good investment later on, when you decide to sell.

When you look around Phoenix, Arizona, you will see a lot of patio covers, gazebos, and porches.Sure, they look good but they serve a much more important purpose. With the sun bearing down on the city 85% of the time in an average year, there’s a dire need for additional protection from the searing heat.

When you think about it, Phoenix is the perfect spot to harness the power of the sun. After all, it is listed as one of the sunniest cities in America. Locals get 3,800 to 4,000 hours of sunlight per year, so why not try to capture that?

Particularly since homeowners can also get incentives when they go for alternative power sources other than the traditional fossil fuels.

Often, the glass panels get installed on the roof where the sunlight hits them directly. Sometimes, you can also see them on the ground with unique mounts that allow the panels to follow the sun’s movement throughout the day.

Solar panels in the patio: Best of both worlds

While most solar mounts you’ll see are set on the roof of the house, not every structure is ideal for supporting their weight, which makes the patio a great alternative.

Converting your patio into a mount for solar panels gives homeowners both additional shade and a great alternative source of power. Over the years, installers have introduced innovative ways to install the panels on smaller scales on Phoenix homes. You have solar trees, solar cars, and ground solar.

But patio manufacturers give an additional platform for suppliers to install solar power on homes. Unlike with ground solar, patios do not require supplementary land.

If you are planning to build a patio on your property, you can hit two birds with one stone by also adding solar panels on the roof.

One option is to use the panels for your main roof instead of a solid cover or a pergola. The main advantage of this option is that you maximize the solar footprint. The drawback, however, is that it does not supply maximum protection from the sun.

If you already have a patio attached to your home, you may need to contact a service provider such as City Seamless Patio Covers, to check the durability of the columns and beams and confirm that they can support the additional weight of solar panels. This is a crucial step in the process, and the good news is that it’s a relatively easy fix to reinforce the posts if they’re not sturdy enough.

If you own a small restaurant or cafe, patios give you that extra footprint to expand your indoor space. As a result, you can add more tables and chairs for your customers. Businesses spend about $2 for every square foot of space.If you have 1,000 square feet of business space, including your patio, you are looking at $2,000 per month. One innovative way to cut your overhead costs is to go solar.

Imagine how much you would save if you could reduce your utility bills down to zero? You can use solar energy to heat your water or to power your heat, ventilation, and air conditioning system. If you store enough energy, you can send it back to the grid for extra credits.

And your smart home can also be powered by the energy you store from the solar panels. The average homeowner in Arizona, for instance, pays about $120 per month on electricity bills. You can reduce that to zero with the help of your photovoltaic panels.

More tips for homeowners

Why is wicker used for outdoor furniture?What’s the difference between faux leather and real leather sofas?How To Set Up a Killer Smoking Room at Home
The Kid-Friendly Home: Creating A Safe Haven For Your Little Explorers

Source: fancypantshomes.com