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A payroll tax in Washington state that is designed to establish a fund for older residents’ long-term care needs could be undone by voters this fall through a ballot initiative.

“WA Cares” is a payroll tax that is described as a “public long-term care insurance program” in which all working Washington residents contribute 0.58% of each paycheck to the associated fund. After 10 years of contributions, a long-term care benefit is accessible so long as there is an associated care need when requesting the benefit.

Those who qualify can begin accessing the benefit in July 2026, and they can access a benefit of up to $36,500 adjusted with inflation. Residents born before 1968 typically “have lower contribution requirements and benefits,” according to the state’s WA Cares Fund website.

But the mandatory payroll tax — created as part of the program by the Washington Legislature in 2019 — now faces an “existential threat” to its existence, according to advocates. A successful signature-gathering campaign has added a new voter initiative to the state’s ballot in the fall. Voters can choose to make the payroll tax voluntary.

Should that initiative be approved by Washington voters, what has been described as a “first-of-its-kind” effort to tackle issues of financial unpreparedness for long-term care needs by older Americans could be dealt a blow it would not recover from, according to advocates who wish to keep the payroll tax mandatory.

“Essentially, it’s framed as a choice, but it really kills the program,” according to state Rep. Nicole Macri (D) in a February interview with The Seattle Times. “[That’s] because like any other social insurance program like Medicare or Social Security, it depends on a broad, extremely broad, base of contributors in order for everybody to be eligible for a benefit.”

Recent polling to gauge voter interest in the initiative is not looking favorable for keeping the payroll tax mandatory. In polling conducted for the Seattle Times, 52% of likely voters would support the initiative to make the tax optional. Another 27% of likely voters said they would vote “no” on such an initiative, while 22% remain undecided.

While an overwhelming majority of Washington Republicans support the initiative (63%), so do a majority of Democrats (53%). The lowest share of support from those who identified their political affiliation came from Independents (43%).

Proponents for the campaign seeking to persuade voters to vote “no” on the initiative — and keep the payroll tax mandatory — expressed concerns about the poll’s language.

Long-term care is seen as a key attribute to allow seniors to age in place in their homes. A study by researchers at Rutgers University in New Jersey earlier this year found that home-based care is a leading outcome for older Americans, particularly as the U.S. population grows older more quickly.

Source: housingwire.com

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Managing your money wisely starts with understanding how you spend it. Let’s break down the common habits that can make or break your budget. Whether you want to save more, spend less, or just be more mindful of your finances, knowing these key habits is essential.

This guide will help you identify and change spending patterns that can impact your financial future. Let’s dive in and see how you can take control of your money.

Budget your money

Image Credit: Karolina Grabowska from Pexels.

Budgeting helps you decide how to spend your income wisely. It ensures you have enough for essentials and don’t overspend. It’s a smart way to meet your financial goals.

To learn more: How to Budget Money and Still Enjoy Life

Cancel bills you can’t pay

Image Credit: Caliphoto from Getty Images Signature.

If you can’t pay a bill, contact your creditors to ask for cancellation. If that fails, explain why you missed the payment. With many unpaid bills, you may look at debt consolidation, but stop using debt as a form of payment.

To learn more: How to Get Out of Debt in 5 Easy Steps

Switch Banks

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Don’t pay for banking services. If you do, it’s time to switch to a credit union. They often offer better deals and lower fees.

To learn more: This is the Simple Answer…How Many Bank Accounts Should I Have

Insurance bundles

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Insurance bundles include different coverages like home, auto, life, and disability insurance. They often come with riders for income loss and medical expenses, providing comprehensive protection.

Switch banks to one with high APY

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Not investing in a high-interest account means losing money. Look for banks with a high APY (annual percentage yield) on deposits. This is a smart place to keep your rainy day fund.

Learn More: Breaking Down the Purpose of a Rainy Day Fund

Increase income

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Increase your income by finding a new job or starting a business. More income means more money to save or invest for your future.

To learn more: Explore the Many Ways to Make Money

Cut your bills

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The average person spends about $150 monthly on bills like electricity and gas. Cutting these expenses where possible can save you a lot of money each month. Look for others you can trim.

To learn more: What Are Fixed Expenses? How to Budget for Fixed Costs

Earn cash back on purchases

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Earn cash back on things you already buy using a credit card, debit card, or other means. It’s an easy way to get some money back on your regular purchases.

Learn More: 15 Most Effective Credit Card Hacks and Rewards

Make money on things you own

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Sell items you no longer need on eBay, Craigslist, or other sites instead of throwing them away. It’s a good way to make extra money.

Avoid unnecessary spending

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When you’re out, avoid places that tempt you to buy things you don’t need. Staying away from these places helps you save money and avoid impulse purchases.

Don’t buy things on credit

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If you can’t afford it, don’t buy it on credit. This way, you won’t end up paying more than what the item is worth due to interest and fees.

To learn more: 7 Simplistic Habits Needed for Debt Free Living

Save your spare change

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Save your spare change in jars. Over time, it adds up and can become a nice amount of money that you didn’t even miss.

To learn more: The Penny Challenge Will Easily Save More Than $650

Automate your budget

Image Credit: Alexander’s Images.

Automate your budget to know what you have to spend. It helps keep your shopping in check and prevents impulse buying, making it easier to manage your finances.

To learn more: How to Budget Your Money With Percentages – Cents Plan Formula

Avoid fees from simple transactions

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Be aware of fees from credit cards, debit cards, and electronic check transactions. Avoid unnecessary charges by knowing what fees apply to your transactions and finding ways to minimize them.

Then Become Financially Sound

Image Credit: Dean Drobot.

These money management habits are solid and emphasize the benefits of saving money, spending less, and maintaining financial stability. This is how you want to live.

To learn more: How Quick can you Become Financially Sound?

Know someone else that needs this, too? Then, please share!!

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

Source: moneybliss.org

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You need to understand your willingness, need, and ability to take portfolio risks. It’s an idea that straddles the line between personal preference and objective truth.

Let’s break down each of the three constituents, then put it all together with an example.

Need

Your need to take risks relates to the amount of objective investment growth required to meet your financial goals.

Understanding need starts with a comprehensive financial plan showing your projected cash flow over the next 10 or 20 years. Money in, money out, and most pertinent to today’s topic, your projected portfolio withdrawals. Those future portfolio withdrawals dictate your need for risk today.

For example: I’d argue that reader Vince (the star of Winning the Game: Retiring at 57 with $4.2M) had minor needs for investment risk. His asset base is very healthy, his withdrawals are proportionally small, and therefore, little risk is needed for Vince to meet his goals.

Whereas a family underfunded for their retirement goals might have either 1) an enormous need for investment risk or 2) the need to decrease their financial goals.

Need is about how much investment growth you require.

Ability

Ability is related to need, albeit on the opposite side of the coin. An investor’s ability to take risk is based on their capacity to withstand or recover from losses (either temporary or permanent). Need is a function of required growth, ability is a function of recovery from loss.

In general, the more assets you have, the greater your capacity to recover from loss. More assets = more ability for risk. That’s why certain high-risk, concentrated, and/or illiquid assets are only appropriate for investors with “excess capital.” Those investors are the only ones with the ability to take on that risk.

But for younger or newer investors, the ability to take on risk is directly proportional to their income and savings rate. They have long timelines of dollar cost averaging ahead of them. They have decades to make up for any losses. Their ability for risk is high.

Ability is about recovering from loss, either through excess current assets or a healthy stream of future saving.

Willingness

Willingness is the only subjective measure in today’s trio. It’s purely mental. How will you react to the higher volatility that comes with high-risk investments? Are you willing to stomach losses?

Willingness is not correlated with need or ability. That fact complicates the act of giving responsible financial advice. If someone’s need suggests large returns but their willingness cannot stomach any risk, how do we square that circle?

Willingness is the “personal” side of this personal finance topic. Need and Ability are both objective. Willingness is subjective. Each of your Willingness’s will be unique and different.

Putting It All Together

How do we combine these three factors to provide actual portfolio advice?

When I give advice, I do my best to collect both objective data and subjective feelings.

The objective data helps my colleagues and me assess Need and Ability. Based on those numbers, we can provide a range of portfolio allocations that should work well for the particular investor. e.g. “from 60% to 75% stocks, plus 35% to 15% bonds, plus 0% to 10% alternatives or private investments.”

Start with facts…

This objective portfolio range can then be combined with the investor’s subjective Willingness for risk. If they’ve voiced their opinion for high-octane risk-taking, we’ll advise them toward the aggressive end of our range. The more timid investor will be advised toward the conservative end of the range. Either way, we feel comfortable that the objective numbers will work out in their favor.

…then add feelings

But what if someone pushes back further, showing a Willingness outside our prescribed asset allocation range? There are a few outcomes from here:

  1. Sometimes, we worry that a client’s hard-headedness prevents us from providing fiduciary advice. For example, one client insisted on selling to cash during the spring of 2020 (peak COVID-19 fright in the markets) and then insisted upon staying in cash. The lost all Willingness for risk. They ignored our cautions against this move. They ended up unhappy with their results, and we were unhappy they ignored us.
  2. If a client only wants to push slightly outside our recommended range, we have a transparent and reasonable conversation. For example, an aggressive investor client asked to be invested in 100% equities despite our “max risk” recommendation of 80% stocks, 10% bonds, and 10% alternatives. That’s what their Need and Ability suggested. We discussed the pros and cons of our recommendation compared to their preference. We all understood each other, and ultimately invested their money in our stock portfolio per their preferred allocation – 100% stocks. We don’t want to make perfect the enemy of good enough.
  3. If a client is more conservative than we recommend, that typically warrants a different conversation: you might not hit your stated goals on time. In that case, our recommendation is often based on their Need for long-term growth in order to fund retirement, afford the kids’ college, buy their dream lake house, etc. But if their Willingness is conservative, then their preferred portfolio likely won’t grow fast enough. Again, we hold an open and honest conversation; each conversation feels and sounds different.

The triad of Need, Ability, and Willingness isn’t perfect. But it’s a darn good start. Combining the objective and subjective reasons for risk and reward is a terrific framework for portfolio construction.

Thank you for reading! If you enjoyed this article, join 8500+ subscribers who read my 2-minute weekly email, where I send you links to the smartest financial content I find online every week. You can read past newsletters before signing up.

-Jesse

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Source: bestinterest.blog

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Living small can have big advantages — particularly when it comes to cost. With fewer square feet to build, maintain, and keep lit, cooled, and heated, a tiny house can be far cheaper than more traditional iterations of the American dream.

Still, not all tiny houses come with tiny price tags. While it’s possible to build an off-the-grid tiny house for $10,000, some luxury tiny homes cost $100,000 or more. On average, a tiny home costs just over $50,000 to build, not including the price of the land it’s sitting on, though purchasing a prebuilt tiny home could rack up a higher price tag.

What Is the Average Tiny House Cost?

While, as we’ve seen, the cost of a tiny house can range significantly, the average price is usually somewhere between $30,000 and $60,000, according to Porch.com. Compare that to the latest median sale price for a non-tiny home — $434,000, according to real estate giant Redfin. (That’s before accounting for peripheral expenses like closing costs.) Bear in mind, though, that tiny house prices generally don’t include the land where the house will be located or the cost of any water, sewer, or electrical service hookup.

That’s a pretty hefty difference, although of course the tight housing market has an effect on the cost of prebuilt tiny homes, too. It’s not uncommon to see tiny homes listed for close to (or even over) $100,000, especially in highly desirable areas.

Many tiny houses are so relatively low cost that they don’t meet the minimum threshold to qualify for a home loan, although there are different types of mortgage loans and you can shop around to find a lender that might finance your home.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Questions? Call (844)-763-4466.

Tiny House on Wheels vs. Foundation

As you may already know, tiny homes can be built on wheels (though they’re not usually as mobile as standard mobile homes) or built on a foundation just like a larger home. Along with giving their owners some flexibility when it comes to location, building a tiny house on wheels can also change the price tag.

According to data from The Spruce, a tiny house on wheels costs an average of $60,000 to $80,000, while those built into foundations start lower — at $35,000 — but can run substantially higher, to $180,000.

Many other factors also play into the overall tiny home cost, too, which we’ll take a closer look at next.

Recommended: How to Get a Mortgage

Factors Affecting Tiny Home Cost

What other factors affect your tiny home’s bottom line? Here are some of the most impactful.

Size and Square Footage

While “tiny” is a fairly open-ended description, according to builder United Tiny Homes, these structures are generally between 100 and 400 square feet. There is some wiggle room on either end, though, and 500-square-foot tiny houses aren’t unheard of.

As you might expect, the larger your tiny house is, the more materials it takes to build — and therefore, the higher its price is likely to be. Still, since even the largest tiny homes are so much less expensive than traditional homes, it may be worth it to have just a little bit more room to roam.

Building Materials

Another factor that’s true for tiny homes as well as their larger counterparts: The higher the quality of the building materials, the more expensive the tiny home is likely to be. (However, it may also be able to withstand the test of time better, lowering overall maintenance costs and actually saving you money over time.)

However, some tiny home builders save by using recycled or reclaimed materials, which can substantially lower the overall cost (though make the project more time- and effort-intensive).

Labor and Professional Services

Labor is, of course, another major factor. If you’ve got the skills to build your tiny home yourself — or the patience to learn them — you stand to save thousands of dollars on what you’d spend to have a professional builder do it for you. How much does it cost to build a tiny house when it comes to labor? Construction work usually starts around $20 per hour, depending on the specific project, and that’s not counting the cost of materials and any overhead a contractor would charge. Professionals such as a plumber or electrician can run into the hundreds of dollars per hour.

Of course, when it comes to tricky and even potentially dangerous aspects of building a tiny home, like running electricity, professional know-how might be worth the price if you’re an amateur.

Building vs. Buying a Tiny House

When you’re budgeting for buying a house, bear in mind that buying a premade tiny home could be a lot more expensive than building one yourself — but as we’ve seen, you can also rack up a large overall bill on building your own if you rely on professional labor to do so. Here are some other considerations to keep in mind as you decide which route is right for you.

Custom Build

Having the opportunity to literally dream up your perfect tiny home and bring it to life might be priceless to you — and, again, if you’re able to DIY the project from start to finish, it might cost you less than buying someone else’s already-built dream. However, working with a contractor and architect to draw the blueprint and build the entire home from scratch could be a lot pricier. The good news is, tiny homes are popular enough now that services specifically designed to build tiny homes are more readily available.

Prefab or Kit Homes

Looking for a good middle road between a custom-designed, DIY tiny home and buying one that’s ready to go? Tiny home kits are available for prices starting around $12,000 or so — although this figure of course doesn’t include the land the tiny home will need to sit on, or the labor it’ll take to get it from flat to 3-D.

Used Tiny Homes

Buying someone else’s used tiny home is an option that could save you money — or cost you more, if the house has been carefully flipped and staged and is well marketed. Used tiny homes on wheels may be less expensive than those on foundations, but lots of factors play in, including geographical location, materials used, and more.

Recommended: Mortgage Calculator

Cost-Saving Tips for Tiny House Living

Here are some best practices for minimizing tiny house cost:

DIY Construction

Once again, if you have (or can summon) the know-how to build your own tiny house from scratch, you can shave a substantial portion off the final price tag. Plus, you’ll be better prepared for inevitable maintenance projects down the line — which means the saving opportunities just keep going.

Repurposed and Recycled Materials

Using repurposed and recycled materials can lower the cost of the physical parts of your building. In some cases, recycled and repurposed materials are available for free — though you may “pay” in the time it takes to find them.

Off-Grid Living

Finally, setting your tiny house up for off-grid living saves you money on utilities and city services like trash and water. By utilizing solar panels and a composting toilet, you can make your tiny house ready for the great outdoors — and self-sustaining enough to forego the regular monthly bills.

The Takeaway

While the cost of a tiny home can vary significantly, it’s almost always substantially lower than the cost of traditional, larger American houses — which can give those who live tiny big gains in terms of financial freedom.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

What is the cheapest way to build a tiny house?

If you have the know-how, building your own tiny house from scratch with recycled and repurposed materials can save you thousands of dollars. Many knowledgeable tiny home owners have completed the project for under $10,000.

How much does it cost to hire a tiny house builder?

While labor costs vary substantially depending on where you live (and other factors), the cost of materials for most tiny homes is already around $50,000, and labor usually costs about $20 per hour. Which is to say, the overall cost to hire a tiny house builder can quickly approach $100,000, particularly if you want a custom design.

Can you get a loan for a tiny house?

Tiny homes are still a relatively new phenomenon, and some mortgage lenders’ policies have not yet been updated to work for them. Given their relatively low cost, the amount you need to borrow may be under the mortgage lender’s minimum. Personal loans are another option for those who want to finance a tiny house, but beware: Unsecured personal loans usually come at higher interest rates than secured mortgages, and the interest may not be deductible on federal taxes as it would with a traditional mortgage.

Photo credit: iStock/RossHelen

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Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Source: sofi.com

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Coinciding with the effective date for a previously announced reverse stock split, the price for shares of leading reverse mortgage lender Finance of America (FOA) stood well above the minimum threshold the New York Stock Exchange (NYSE) requires to maintain trading activity.

As of the close of trading on Friday — the day the reverse stock split went into effect — FOA’s share price jumped from $0.73 at the end of trading on Thursday to $7.19 per share the following morning, roughly corresponding to the 10:1 ratio the company explained would take place on the effective date.

By 4:00pm EST on Friday, the share price had increased 3.43% compared to morning hours to sit at roughly $7.72 per share.

This was the intended impact of the move, according to regulatory filings and company officials who spoke with HousingWire’s Reverse Mortgage Daily (RMD) in the days leading up to the effective date.

“[E]very ten issued and outstanding shares of the company’s class A common stock will be automatically reclassified into one issued and outstanding share of the company’s class A common stock,” the company explained when announcing the effective date of the move last week. “No fractional shares will be issued as a result of the reverse stock split.”

RMD reached out to FOA for comment, and a company representative referred questions to a new 8-K filing with the Securities and Exchange Commission (SEC) posted Friday.

All shares of class A common stock “outstanding immediately following the effectiveness of the reverse stock split remain fully paid and non-assessable,” the filing stated, and and the shares continue to trade on the NYSE under the “FOA” symbol.

The split “had the principal effect of proportionately decreasing the number of outstanding shares of class A common stock at the 10:1 reverse stock split ratio,” the filing added.

The stock market broadly speaking experienced a rally on Friday, according to reporting at CNN, which stems from strong corporate performance and a prevailing perspective that the Federal Reserve could move to cut interest rates by this fall.

“The Dow jumped 624 points, or 1.6%, on Friday after soaring more than 800 points earlier in the session. The S&P 500 gained 1.2% and the Nasdaq Composite added 1%,” CNN reported.

FOA previously explained in a filing with the SEC last month that it has moved to perform the reverse stock split to bring its share price into compliance with the NYSE’s continued listing standard, which states that listed stocks maintain a price of at least $1 per share “over a consecutive 30 trading-day period.”

The company explained that it expected the move to “increase the per-share trading price of our class A common stock back above $1.00,” also saying it believed that it “may make our class A common stock more attractive to a broader range of institutional and other investors,” the company said when announcing the move in June.

In December 2023, the company received a notice from the NYSE that it was out of compliance with the exchange’s continued listing standard. FOA said it returned to compliance after this point, but NYSE issued a second notice in February 2024.

Earlier this month, NYSE took steps to begin delisting FOA’s warrants, traded under the ticker symbol “FOA.WS,” although the class A common shares traded under the “FOA” ticker symbol continued to be traded.

Earlier this month, credit rating agency Fitch announced that its long-term issuer default rating (IDR) for FOA had been downgraded following the announcement of a debt exchange plan that staves off maturity risk beyond 2025.

Source: housingwire.com

Apache is functioning normally

Mortgage rates edged slightly higher in the week ending July 25, but are still near their lowest levels since spring.

The 30-year fixed-rate mortgage averaged 6.69%, up two basis points from the previous week’s average, according to rates provided to NerdWallet by Zillow. A basis point is one one-hundredth of a percentage point.

This week’s change in the average rate was so small that it was imperceptible to most borrowers. Not counting the previous week, this week’s average 30-year rate was the lowest since the week ending March 28, when it also averaged 6.69%.

Explore mortgages today and get started on your homeownership goals

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Rates have headed lower since April

The week-to-week movements in mortgage rates can obscure the bigger story: that ever so slowly, mortgage rates have been on the decline since April. The 30-year mortgage averaged 7.04% in April, 7.01% in May, 6.82% in June, and 6.76% in the first three weeks of July. That’s a drop of only about a quarter of a percentage point in three months, but it appears that mortgage rates have nudged themselves off the chairlift and are skiing downhill.

As a result of lower rates, the typical monthly mortgage payment decreased for home buyers in June compared to buyers in May, according to the Mortgage Bankers Association. The association says the median principal-and-interest payment in June was $2,167, down from $2,219 in May. That’s a drop of $52.

Explore mortgages today and get started on your homeownership goals

Get personalized rates. Your lender matches are just a few questions away.

Won’t affect your credit score

Existing home prices hit a new peak

Rates are moving in the right direction, but home prices aren’t. The median price paid for an existing home rose to an all-time high of $426,900 in June, according to the National Association of Realtors. That represented a 4.1% increase compared to 12 months earlier, and a 49.6% increase compared to $285,400 in June 2019.

As prices increased in June, fewer people bought homes — and the inventory of unsold homes on the market went up, NAR said. There were 1.32 million homes on the market at the end of June — an increase of 250,000 compared to a year before.

With buyers having more homes to choose from, the landscape is slowly shifting from a seller’s market, where home sellers call the shots, toward a balanced market. As a result, more buyers are able to insist on having home inspections “because now the buyers understand that they have [a] little more power compared to one year ago,” said Lawrence Yun, NAR’s chief economist, in a conference call.

Source: nerdwallet.com