Money Management

Attending an open house? Read on for a checklist to follow. 

If you’re looking to buy a home, you’ll ideally partner up with a real estate agent who can guide you in your search. That means arranging showings so you can check out different properties at a pace that’s comfortable for you.

But your real estate agent might also suggest that you attend some open houses in the course of your house hunting. Or, you might stumble across an open house in your neighborhood independently and decide to pop in.

Attending an open house certainly isn’t a bad idea. Quite the contrary — it’s a good way to check out a home without pressure. But if you’re going to attend an open house as a potential buyer, make certain to do these important things.

1. Look out for obvious signs of damage

Buying a home today is hardly an inexpensive prospect. It costs a lot to sign a mortgage loan, especially with borrowing rates being up. And so if you’re going to purchase a home, you’ll want one in good condition.

It’s important to be on the lookout for signs of property damage during an open house. These include water stains on the ceilings, cracks in the walls, and mold, which might look like black spots on walls or in corners.

An issue like a leaky roof or sinking foundation could cost thousands upon thousands of dollars to address. If you’re already paying up for a mortgage, chances are, you don’t want extra surprises.

2. Test the water fixtures and appliances

If you’re attending an open house and the property in question seems like a good fit, be a little nosy — you’re allowed. Turn on faucets to make sure they run, and turn on showers to get a sense of how happy you are with the water pressure.

Also, flush toilets to make sure they work, and try to test out appliances if they’re being sold with the house. This doesn’t mean you should bring laundry along to make sure the washing machine is up to par. But it wouldn’t hurt to quickly press the start button on the dryer to make sure it operates.

3. Listen to what other prospective buyers are saying

There may be other buyers roaming around an open house at the same time as you. And eavesdropping on their conversations could work to your benefit.

If you’re interested in the property and hear that another buyer is looking to make an offer, that might prompt you to take action quickly rather than risk losing out on that home. And if you hear other prospective buyers criticizing the home, pay attention — they might call out a problem you didn’t identify yourself.

Should you make an offer during an open house?

Quicken says that most of the time, a home won’t sell in the course of an open house alone. Rather, open houses are a way to get buyers in the door.

If you’ve seen your fair share of homes and come away from an open house with a positive impression, then you may be inclined to make an offer on the spot. That’s not necessarily a poor choice, especially if your real estate agent agrees that it’s the right move.

However, you should also know that today’s housing market isn’t the same competition-laden one as 2020’s and 2021’s. Yes, there are still more buyers than available homes. But buyers also aren’t clamoring for homes the way they were a few years ago when mortgage rates were really low.

So if you come away from an open house unsure of what to do, you may want to err on the side of sleeping on it. Better yet — if you think the home has potential but you’re just not certain, ask your real estate agent to set up a private showing. That way, you can take your time exploring the property to come to a decision.

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Burnout is increasingly common in the American workforce. Find out how you can recognize it, and how to recover financially. 

Burnout can be devastating. As increasing numbers of Americans know, it goes far beyond stress or feeling tired at the end of the week. According to a recent report from Aflac, 59% of American workers face at least moderate levels of burnout.

So, what is burnout? The WHO categorizes it as a “syndrome conceptualized as resulting from chronic workplace stress that has not been successfully managed.” At its worst, it’s extreme exhaustion that makes it hard to get to the office, never mind get anything done when you get there. Sadly, on top of the physical and emotional impact of burnout, there’s often a financial one, too.

How burnout hurt my finances

Twenty years ago, I worked in offices where it was normal to have to pull 20-hour days or work through the night to get the job done. That is no longer acceptable in many of today’s workplaces. Unfortunately, I haven’t shaken those unhelpful work habits, even after what I now know were several bouts of burnout during my career.

Here are three of the ways burnout hurt my finances.

Reduced income: As a freelancer, there’s a direct connection between the amount I work and the amount I get paid. Periods of burnout mean less — sometimes even no — money coming in. Most recently, I calculated about $6,000 in lost income because of exhaustion. If you have a salaried job, burnout can still impact your earnings, though it’s harder to put a dollar amount on it. You might miss the promotion you wanted or find it harder to negotiate a raise. You may also need to take unpaid leave or work reduced hours to recover.Overspending: Two of my worst money habits come through when I’m tired and stressed: I spend a lot more on conveniences like takeouts and taxis, and I stress-shop online for things I don’t really need. As a personal finance writer, I know that a reduction in income means it’s time to put the brakes on my spending. But knowing and doing are two very different things.Ignoring my finances: It isn’t easy to admit, but when you’re so tired you can barely make a cup of coffee, logging into your online banking account often gets pushed to a tomorrow that never arrives. Ignoring my credit card balance for six months cost me around $400 in interest. It’s hard to put a price tag on other types of financial neglect, such as periods of time where I didn’t keep up with my investment contributions.

How I got back on track

If a lot of the text above had you googling “burnout” because you felt it described what you’ve been going through, it may be worth getting medical advice. It could be burnout, but there may also be an undiagnosed health issue that’s behind it. A doctor may also be able to help you recover and tell you what support is available.

Sadly, that recovery will take time. It isn’t going to get magically fixed with a few days of vacation and a couple nights of good sleep. One study from the University of Montreal suggested it could take one to three years to put burnout behind you. It often involves making serious changes to the way you work, or even a career change.

Take it slowly

Resist the temptation to dive straight back in and work extra hours to make up for any financial deficits. My first instinct when I looked at the missed deadlines and thousands of dollars of lost earnings was to cancel all my social activities to work nights and weekends so I could catch up. That made things worse. The brain fog descended again, and I fell even further behind.

Give yourself time to rebuild your bank account balance. Try to accept that you can’t fix everything by working more hours, and look for other solutions. For example, I talked to my boss about the work I’d fallen behind on and agreed to new deadlines. I implemented a strict work and sleep schedule, which eventually resulted in fewer — more productive — hours at my desk. Financially, I sold or returned some of my unnecessary internet purchases.

Make a plan

I am a big fan of planning, particularly when faced with something that seems impossible. As soon as I felt able, I sat down with my recent bank statements and did a complete overhaul of my budget so that it reflected my situation.

I wanted to factor in:

A period of lower earnings: Being realistic, I couldn’t expect to work as much while I recovered. I needed to significantly reduce my costs so that I could live within my means. That meant canceling subscriptions, cutting my takeout expenditure, and planning low-cost ways to relax and socialize.Rebuild my emergency fund: The point of an emergency fund is to get you through periods of reduced income or health issues. But once I started to get back on track with work, I needed to replace that money. I transferred 10% of my paycheck to my savings account until I had six months’ worth of living expenses again.Credit card repayments: Dipping into my savings meant I hadn’t taken on huge amounts of credit card debt. Nonetheless, I wanted to pay down the balance. I stopped using it and put another 10% of my paycheck toward paying it off.

Once I’d topped up my emergency fund and paid down my debt, I switched my attention to my retirement account. One of the keys to saving for old age is to make regular contributions over a period of time. But I couldn’t balance a reduced income and my savings and my debt repayments and my investments. Rather than setting myself up to fail, I prioritized the more urgent issues. Everybody’s situation is different, but for me, that made the most sense.

Main takeaway

If you’ve been struggling with burnout, it can feel as if there’s no way through. But there are always options, even if you can’t see them right now. Start by talking to someone, whether that’s a colleague, friend, employer, or medical professional. When you start to get back on track, look for ways to recover financially as well.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Emma Newbery has no position in any of the stocks mentioned. The Motley Fool recommends Aflac. The Motley Fool has a disclosure policy.

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Financial experts generally say to maintain a three-month emergency fund. Read on to see why that might fall short. 

A recent SecureSave survey found that 63% of Americans don’t have enough money in the bank to cover an unplanned $500 expense. But the reality is that the typical worker should have way more than $500 in savings.

You’ll often hear that it’s important to maintain an emergency fund with enough cash to cover at least three months of essential expenses. The logic there is that if you were to lose your job, a three-month emergency fund would allow you to pay your bills for a period of time without resorting to debt.

But is a three-month emergency fund really enough? Here’s why it may not be.

A recession could keep you out of work longer than expected

It’s one thing to lose your job because your employer had financial problems or because your industry has been a bit sluggish. But it’s another thing to lose your job during a full-blown recession.

If that were to happen, it’s conceivable you could be out of work for far longer than just three months. This especially holds true if you have a unique job or are a higher-level employee. Oddly enough, sometimes, having a higher-level job that requires more skills puts you at a disadvantage when looking for work because there are fewer jobs of that nature to fill.

It’s for this reason that you may want to aim for more like a six-month emergency fund. That gives you more leeway to do some job-hunting without having to resort to debt to pay your bills.

You could run into issues if you lose your job at the same time home or car repairs arise

Let’s say you lose your job and aren’t entitled to severance or unemployment. Perhaps you’ll manage to find a replacement job in three months. But what if you happen to need a $3,000 car repair or $5,000 home repair at the exact same time you’re out of work? Suddenly, you’re in a jam.

That’s why, again, a six-month emergency fund might be a better target to aim for. Alternatively, you could aim to sock away enough cash to pay for three months of bills but also add a few thousand dollars on top of that for home and vehicle repairs.

How to build up a larger emergency fund

Seeing as how the majority of Americans clearly don’t even have a three-month emergency fund, building a six-month fund might seem next to impossible. But one thing to remember is that you don’t need to come up with six months’ worth of expenses in savings today.

It might take you a couple of years to complete your emergency fund if you’re aiming for a higher number, and that’s okay. The key is to build up gradually as you can.

That said, there are steps you can take to move the process along. First, consider taking on a temporary side hustle. Since that money won’t be earmarked for existing bills, you can sock it away in the bank for emergencies.

Next, if you’re used to living on a certain income and you get a raise at work, set that extra sum to get transferred to your savings account automatically. If it’s not money you need to pay your bills, you should be able to part with it pretty easily. And if you set up that automatic transfer right away, it’s money you won’t even miss.

Having a three-month emergency fund puts you in a solid position to deal with unplanned expenses or a period of joblessness. But if you’re able to save for emergencies beyond that, you’ll buy yourself that much more protection and peace of mind.

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You don’t need a lot of cash to jump-start your passive earning potential. Here’s how to spend $500 or less to get started. 

If you’re unfamiliar with the idea of passive income, it can include any type of money you earn that doesn’t require you to be constantly working.

For example, if you buy a second home and rent it out, you’re collecting passive income each month. You still need to invest time and money into getting the house on the rental market, finding a tenant, and occasionally doing repairs, but most of the time, it’s providing a constant stream of income.

Your day job, on the other hand, isn’t passive at all. You have to get up every morning and work on your projects, make calls, close sales, etc. Then you get up the next day and do it all over again.

Nearly one-fifth of Americans have some form of passive income, but what if you don’t have lots of money to spend on buying a second home to rent out? Fortunately, there are ways to improve your personal finances using passive income that don’t require a significant financial investment.

Here are five ways you can get started building passive income with $500 or less.

1. Sell digital products online

One way to generate passive income online is to sell digital products. For example, you could design journals, notebooks, or digital artwork and sell them on Etsy.

You’ll have to spend time creating the content at the beginning, but once you have it all made, you can upload it to an online shop. Many people who sell digital products manage their business by creating new products regularly and researching lucrative niches. But once your products are online, they can generate sales on their own.

If you go this route, you may need to spend some money on a subscription to design software like Adobe’s Creative Cloud ($55 per month) or even Canva ($120 annually).

2. Buy stocks

This is a pretty obvious one, and it’s one of the most passive ways to generate income. Like any investment, there’s no guarantee you’ll make money from it, but the potential from buying stocks is significant.

For example, let’s say you invested $500 in Microsoft five years ago, added $500 to your position each year, and reinvested any money you received from the company’s dividends. Your total contributions over the five years would be $2,500 ($500 in the first year plus $500 for the next four years), but with Microsoft’s share price gains over this time, your total investment would now be worth nearly $4,700.

This is just one example; not all stocks will increase at the same pace, but the point here is that small amounts of money — even $500 invested each year — can turn into much larger sums, thanks to compounding interest. The good news is that you don’t even have to like investing or pick your own stocks to benefit. You can always invest in passive exchange-traded funds and let your money grow over time.

3. Real estate investing through crowdfunding

Companies like Yieldstreet, CrowdStreet, and Fundrise allow you to invest as little as $10 into a property portfolio. These crowdfunding platforms combine the investments from a large group of investors and then put them toward buying properties. This allows the collective group of investors to purchase properties they wouldn’t otherwise be able to purchase on their own.

No form of investing is a guaranteed win, so do your research before putting money into a real estate crowdfunding app. You should also look into each platform’s fee structure. For example, Yieldstreet’s annual management fee is between 0% to 2.5%. The more fees and the higher the percentage companies charge, the less you’ll earn on your investment.

4. Vending machines

Owning vending machines can be a relatively easy way to earn passive income. While new machines can cost thousands of dollars, I found some used vending machines on eBay for under $500 that were still in working order.

You’ll have to find high-traffic locations and get permission — or rent the space — to get your machines up and running. But other than spending some time restocking and maintaining them, this can be a great passive income source.

Data from Naturals2Go, a vending machine company, says that the typical machine earns about $300 monthly.

5. Open a high-yield savings account

Banks are paying very high yields relative to a few years ago, which means that depositing your cash into a new account could easily earn you some nice passive income. Some of the best high-yield savings accounts offer between 4% to 5% APY right now.

Some banks even offer bonuses when you set up a new account, but you’ll have to check to see if there are any requirements — such as setting up monthly automatic deposits — to get the deal. The good news is that you can likely open a new account with just $500 and start earning money immediately.

You won’t get rich off of a high-yield savings account, but considering that you need a good place to store your emergency fund and other savings, it’s a no-brainer way to make some easy money.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Etsy and Microsoft. The Motley Fool has a disclosure policy.

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Buying a home at 23 was doable for my husband. It may not be as doable now, though. Read on to see why. 

When my husband was 23 years old, he purchased a starter home on his own. Even though he’d only been out of college for about a year, he had savings to use for a down payment on a mortgage as a result of having worked during his studies and getting a good job after graduating.

I didn’t know my husband at the time he bought this house. But once we got together, I wound up moving into that home and living it in for a handful of years. In fact, it was the equity from that home that allowed us to upsize to a larger house about 14 years ago despite the much higher mortgage that came with it.

But while buying a home at 23 was feasible for my husband, it may not be as doable today. Here’s why.

A totally different housing market

My husband bought his starter home in 1999. During the first quarter of that year, the average U.S. home sold for about $189,000, according to the St. Louis Fed.

That’s very much not the case today. These days, the average home sale price is about $495,000. That’s more than 2.5 times what homes were selling for when my husband was looking to buy.

Also, my husband bought a home before the housing market crashed in 2008. Back then, mortgage lenders were more lax in terms of approving home loan candidates. They also had lower requirements for down payments.

Now, my husband happened to be a strong borrowing candidate at 23. He had a steady job, a solid down payment, and excellent credit.

But even so, it’s important to acknowledge that borrowing requirements have changed throughout the years. And these days, it may be harder for a 23-year-old to purchase a home by virtue of simply not having had enough time to establish a steady income history.

What’s interesting is that at the time my husband bought his home, the average 30-year mortgage rate was around 7%. That’s comparable to where rates are sitting today. But because of the huge gap in home prices, a 7% mortgage rate was much less problematic back then than it is today.

In fact, let’s compare the monthly payments on a 30-year mortgage for a home selling for $189,000 versus $495,000, assuming a 20% down payment. At 7%, for the former, you’re looking at a monthly payment of $1,006 for principal and interest. For the latter, you’re looking at $2,634.

You can buy a home today at a young age, but it won’t be easy

Clearly, it was a lot more feasible to buy a home right out of college two decades ago than it is today. But that doesn’t automatically mean that homeownership is off the table for younger buyers.

If you have a great job and a sizable down payment, you might qualify for a mortgage, especially if you’re able to secure a letter from your employer attesting to the fact that your job is high in demand and secure. And if you earn enough, it may be that you can afford a mortgage today on a 23-year-old’s salary.

But if you aren’t successful in buying a home today at age 23, don’t beat yourself up, either. It’s hard enough these days to buy a home at 33 or 43, let alone 23. And also, waiting to buy could work to your benefit.

If you buy a home at 23, you may not yet be settled in terms of a relationship or career. So it may be better not to commit to a specific location until you’ve had more time to explore your options.

When I first met my husband, I told him I found it surprising that he was willing to commit to a home purchase at such a young age. His response? “I guess I’m just a commitment sort of guy.”

I don’t know if he said that to win me over or whatnot, but in the end, buying a home at a young age worked out well for him. If you’re able to pull off a home purchase at a young age, it might work out great for you, too.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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