Money Management

When buying a new house, consider the price, the location, and the ongoing costs you’ll have to incur to live there. Learn why these things are vital. 

When you are buying a new house, it’s easy to get swept up in the magic of looking for the perfect views or a dream kitchen you can’t wait to cook in. But, while you have a lot of things to think about to help you find the right place, it’s essential to prioritize what matters most.

In particular, here are the three most important things that you should consider before you get a mortgage and make an offer to buy a new property of your own.

1. The home’s price

The home’s price has to be the first thing you look at when you buy — unless you’re so rich that you can afford any price. That’s because the amount you pay for your house is going to affect your finances for decades to come.

If you buy a more expensive home, you’ll have higher monthly mortgage payments. A $250,000 loan at 7.00% with a 30-year fixed-rate mortgage loan would cost you $1,663 per month, while adding an extra $100,000 onto the price would bring your monthly payment up to $2,329. That’s a cost difference of $7,992 extra every year you wouldn’t have to save for retirement or other goals.

A costlier home would also necessitate a larger down payment. You’d need $50,000 to put 20% down on a $250,000 home, but would need $70,000 for a $350,000 house. It could take you a lot longer to save the extra $20,000, forcing you to put off your homeownership dream — or to make a smaller down payment, which could raise your interest rate and increase your costs. In this circumstance, your lender would likely require you to pay for mortgage insurance to protect them from potential losses due to your small down payment.

To make sure you stay within your price range, avoid looking at properties that are outside of your budget. You can’t fall in love with a home you don’t see, so you’ll be less likely to make irrational choices if you shop for properties only within your spending limits. Ideally, this would mean looking for homes where the total cost of ownership would be below 25% of your income.

2. The home’s location

Location is also a key factor in determining how happy you’ll be in your house over the long term, and it can’t be changed. You need to make sure the location is safe and is convenient to where you want to go. If you find yourself commuting for hours through horrible traffic each day to go to work or to see family, you are going to be miserable no matter how much you love the house itself.

3. The ongoing costs of ownership

Finally, don’t forget about other costs besides the mortgage. You’ll need to look at things like utilities, property taxes, homeowners insurance, and HOA dues when you decide if a particular house is the right one for you.

The reality is, some homes cost much more to insure — especially if they are in a flood zone. And some have higher taxes, or huge association fees. You don’t want to increase the costs of ownership with these added expenses so much that you find yourself struggling to pay the bills.

By considering these three big factors, you may find the perfect home that really makes you happy. Stuff like the kitchen fixtures or paint colors can always be changed later, but these three things can’t, and that’s why they’re crucial to focus on when deciding which property is right for you.

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If the money in your savings account is too accessible, you might use it for the wrong reason. Read on to see how I’ve ensured it’s harder to get to my money. 

I have several savings accounts that I put my money into for various things, like emergency expenses or for vacations.

My savings accounts are at a different financial institution from my checking account because I want to make sure the money is kept separate and not spent on routine purchases. And, when I set up my savings accounts, I purposefully made the password something that I’m definitely going to forget.

It may seem odd to try to make it harder to get into my account by creating a forgettable password (and not saving it in my password manager). But I had a very good reason for making this choice.

Here’s why I made my savings account password impossible to remember

I made the conscious decision to make my savings account password forgettable because I wanted to create more obstacles to getting into my account. I want to have to deal with the hassle of resetting my password because I don’t want to make it too easy to access my saved funds.

See, I have set it up so money transfers into my various savings accounts automatically. When my paycheck is deposited, money comes out of my checking account right away and it goes into savings. I don’t have to sign into my savings account in order for that to happen.

But, if I want to take money out of my savings account, I have to sign into that account in order to do it. So, by making it difficult for me to get into the account, I’ve reduced the likelihood I will take money out of savings for the wrong reasons. While I am going through the whole process of resetting my password and waiting to gain access to the account, I have plenty of opportunities to think about whether I’m making the right choice.

If I’m motivated enough to actually deal with the process of withdrawing the funds, chances are good that the reason for the withdrawal is a good one that is justified. I’ve eliminated the possibility of taking the money out without thinking, by making it just difficult enough to access the funds that I have to think twice — and not so challenging that I can’t get the money out if there’s a good reason to.

Setting myself up for financial success is easy with some simple tricks

Making it difficult for me to get money out of savings is just one of many little financial tricks I’ve set for myself.

I’ve also taken other steps like removing my stored credit card information from websites where I tend to overspend so I need to manually enter payment details instead of just mindlessly clicking “buy.”

The point of these techniques is to make sure I force myself to think about what I’m doing with my money rather than acting on impulse. When I take the time to consider my actions, I’m much more likely to make the right financial choices.

If you want a simple way to increase the likelihood that you’ll stay on course with your money goals, it’s worth thinking about whether little such psychological tricks could work for you, too.

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It’s still a seller’s market, but home prices are starting to come down. Read on to see how to navigate that. 

The red-hot housing market sellers enjoyed in 2021 is no longer today’s reality. Rising mortgage rates have had an impact on buyer demand. And while people are definitely still looking to buy, we’re not seeing the same persistent bidding wars we did a couple of years ago.

That said, home sales and prices have been sliding. In April of 2023, existing home sales were down about 23% from April of 2022, according to the National Association of Realtors (NAR). And that same month, home prices were down 1.7% from a year prior.

Now a 1.7% dip in home prices is by no means terrible, especially given how elevated property values were in the spring of 2022. But still, sellers should recognize that while the real estate market still gives them an edge over buyers, that edge could wane over time. And so if you’re someone who’s serious about selling a home, you may want to act fairly quickly.

It’s still a good time to sell

The reason it’s still a seller’s market boils down to one factor — inventory, or a lack thereof. As of the end of April, there was only a 2.9-month supply of available homes on the U.S. real estate market, according to the NAR. That’s well below the four- to six-month supply of homes it commonly takes to even out the housing market and meet buyer demand in full.

Even though it’s gotten more expensive to sign a mortgage loan due to rising rates, the reality is that there are still way more buyers out there than there are available homes. For that reason alone, you’re likely to end up with a decent sale price on your property in the near term — assuming it’s in good shape and you price it right. But the longer you wait to list your home, the more you risk ending up with a lower sale price.

We don’t know when housing inventory will pick up to a notable degree, but if inventory levels rise, sellers will start to lose their edge. And also, there’s the potential for a recession to think about.

If economic conditions worsen later on this year, it could drive more buyers out of the market. That reduction in demand could, in turn, lead to lower home sale prices. So if you know for sure that selling your home is something you want to do, you may want to list it this summer.

It’s also worth noting that if your home is located in a neighborhood that appeals to families, you may be better off listing it during the summer specifically, before the school year resumes. Families looking to buy a home may prefer to do so in July so they can potentially close and move in August, before school is back in full swing.

The right agent could help

In 2021, when buyer demand was truly intense, many homeowners opted to sell their properties themselves to save on real estate agent fees. But while it’s still a seller’s market, it’s a very different environment than it was in 2021. And so hiring a real estate agent to sell your home could be a smart bet, even if it means losing some money to a commission you’ll have to pay.

A real estate agent can help price your home strategically and market it to buyers. An agent can also help manage the negotiation process in the event that you end up in the fortunate position of getting to entertain multiple offers. So if you’re serious about selling your home, start contacting real estate agents soon so you can ask the right questions and choose the right person for the job.

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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.
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Many of us turn to side hustles as a means of making extra cash, but is this really the best approach? Read on to learn why passive income matters more. 

As the gig economy continues to flourish, more and more people are looking for ways to supplement their income outside of their day jobs. Two popular terms that have emerged are “side hustle” and “passive income.” While they may seem interchangeable at first glance, there are some key differences that define each term. While both options can help you earn extra money, here is why you want to focus on passive income.

What’s the difference?

A side hustle generally refers to a job or project you work on outside your 9-to-5 job. It typically involves actively earning money by performing a service or selling a product. Common examples include delivering food, online tutoring, or freelance writing.

Conversely, passive income requires an initial investment of time and/or money, but then can generate money with little or no ongoing effort from you. For example, rental property or investing in stocks can generate passive income.

Passive income offers more security

The problem with a side hustle is that it depends on your time and physical presence. You only have so many hours in a day and can only trade your time for money for so long. If you get sick, or if you need to take a break for any reason, your income source dries up.

Passive income, on the other hand, offers more security. Whether it’s through rental properties, stock dividends, or a business that runs itself, passive income streams can continue to earn money for you even when you’re not actively working.

Passive income offers more flexibility

Side hustles often require you to work during inconvenient hours or to accept work that doesn’t align with your passions or long-term goals. On the other hand, passive income streams offer more flexibility.

Once you’ve set up your income source and established a system for maintaining it, you can enjoy more free time and more control over how you spend your energy. Passive income also gives you the freedom to pursue other ventures or projects that may not generate immediate income but could lead to greater wealth and satisfaction in the longer term.

Passive income can provide long-term wealth

While side hustles may offer immediate relief from financial stress, they often don’t provide a sustainable path to long-term wealth. With passive income, however, you have the potential to build a portfolio of income streams that can continue to grow and provide steady wealth over time.

Whether it’s through compound interest or by buying a rental property that appreciates in value, passive income can help you achieve your financial goals without continually trading your time for money. Best of all, you can add multiple passive income streams and create assets that you can potentially sell later.

Building your passive income portfolio

So, how do you go about building your own portfolio of passive income streams? The first step is to identify your strengths and interests. What do you enjoy working on or learning about? What skills or assets do you have that could be leveraged for passive income? Once you’ve identified your niches, it’s time to start exploring the various strategies for earning passive income, such as:

Investing in dividend-producing stocksBuying real estate to rent outStarting a business that can be automatedCreating and selling digital products or coursesReceiving royalties on properties such as books, music, or artworkBuilding a blog or website that generates revenue through ads or affiliate marketingHigh-yield savings accounts and CDs (While the returns may be relatively low, these financial instruments offer a secure way to earn passive income with minimal risk)

As you begin building your portfolio, it’s important to remember that passive income takes time and effort to establish. You may not see immediate results, and it’s important to stay patient and committed to the process.

Consider diversifying your revenue streams by establishing multiple sources of passive income. Even generating $25 from each source on a monthly basis can add up in the long run.

While side hustles may offer some short-term benefits, prioritizing passive income can provide greater financial security, flexibility, and long-term wealth. By identifying your niches and exploring the various strategies for building passive income streams, you can begin building a portfolio that allows you to enjoy more autonomy and financial freedom. Make no mistake — it’s still going to take discipline and hard work upfront. But the benefits of investing in a passive income stream could potentially outlast your active earning years and set you up for a more comfortable retirement.

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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.
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You may be tempted to waive a home inspection to get your offer accepted. Read on to see why that’s a dangerous move. 

When you buy a home, you run the risk of encountering a major repair issue right after you close on that purchase. You can lower the risk of that happening by working a home inspection contingency clause into your purchase contract.

Home inspections are a common part of the closing process. But you may be tempted to waive a home inspection to give yourself an edge over other buyers in a tight market. Doing so, however, could sorely backfire on you.

The problem with waiving a home inspection

When you make an offer on a home and a seller accepts, you generally put down a deposit known as earnest money that lets your seller know that you’re serious about the purchase at hand. That earnest money goes into an escrow account and is held there until your home purchase is complete.

Meanwhile, it’s common for home contracts to include a home inspection contingency. This clause gives you, as a buyer, the right to back out of your home purchase contract and get your earnest money back if issues are discovered with the home and the seller refuses or is otherwise unable to address them.

When you waive a home inspection contingency, you give up the right to back out of a home purchase when problems with the property are discovered. And that could mean giving up your earnest money deposit.

Why do some buyers waive their right to a home inspection?

Many home buyers waived their right to a home inspection in 2021 when mortgage rates sunk to record lows and demand was intense. Back then, it was common for sellers to get multiple offers on their homes, and waiving a home inspection contingency could give the buyer doing so an edge over the competition.

But these days, demand isn’t what it was in 2021. That’s because it’s a lot more expensive to sign a mortgage loan now than it was a couple of years ago. As such, you really shouldn’t feel compelled to give up your right to a home inspection when that inspection could spare you from buying a home with hidden problems.

You may also be tempted to waive your home inspection contingency because you don’t want to bear the cost of an inspection. But that’s really not the best reason to go this route.

Rocket Mortgage says that the average home inspection costs $300 to $450, though some can cost more, depending on the property in question. However, if a home inspection uncovers an issue that will cost $10,000 to address, and your seller either shaves that amount off of your home’s purchase price or fixes the issue, your $300 to $450 fee will more than pay for itself.

As such, it’s really best not to waive a home inspection contingency when buying a home. It’s important to know what you’re getting into as a buyer, and you’ll want an option for backing out if the condition of the home you’re looking to buy isn’t what you think it is.

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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.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Google will pay $23 million in a user privacy class action settlement. Users must submit a claim by July 31, 2023 to qualify. Find out how to file a claim. 

Many of us use search engines like Google multiple times daily, and the same was true for many people 10 or more years ago. You may be owed money if you used Google between 2006 and 2013. The technology company has agreed to a $23 million settlement to resolve a user privacy class-action lawsuit. Eligible individuals can submit a claim to collect payment through July 31, 2023. Here’s what you need to know about this news.

Google agrees to a $23 million settlement

A class action lawsuit alleges that Google violated users’ privacy by sharing search queries with third-party websites between Oct. 26, 2006, and Sept. 30, 2013. You can file a claim if you performed a Google search and clicked on a search result during this time. Google denies any liability or wrongdoing, but has agreed to make payments to claimants who file.

You may wonder how much money you can expect to receive. Since millions of users are expected to be eligible for compensation, payments will likely be small. Current estimates suggest that each claimant could be owed approximately $7.70. However, the payment amount could change as more users submit claims.

While this amount of cash won’t significantly impact your checking account balance, filing a claim is worthwhile. No matter how minimal, extra cash can be a win for your personal finances. Whether you’re working to pay down credit card debt or build an emergency fund, a few extra dollars could help you reach your financial goals sooner.

How to file a claim to receive a payment

The deadline to submit a claim or exclude yourself from this class action settlement is July 31, 2023. You can file a claim if you used Google during the dates mentioned above. Below are the steps you need to take to collect the cash you’re owed:

Visit the claim website and review the details of the settlement.Register to receive a class member ID.Use the class member ID sent to you to start a claim.Provide the required contact information and choose your preferred payment method (bank account, Venmo, PayPal, Venmo, Zelle, or a prepaid Mastercard)Complete and submit the claim form by July 31, 2023.

Currently, there’s no set date for when to expect payment. The final approval hearing is scheduled for Oct. 12, 2023. You can visit the claim website for updates. If you wish to receive compensation, submit a claim before the deadline passes. If you do nothing, you give up your right to compensation and won’t receive a payment.

This isn’t the first class action settlement of its kind

Google isn’t the first technology company to be accused of violating users’ privacy. Facebook allegedly allowed third parties to access private user data from 2007 to 2022. The company admits no wrongdoing, but has agreed to a $725 million settlement. Claims are still being accepted for the Facebook privacy settlement through Aug. 25, 2023.

If you were a Facebook user in the United States between May 24, 2007, and Dec. 22, 2022, you’re eligible to receive payment. Staying alert to class action settlements like this is worthwhile, as it could help you boost your savings account balance.

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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.Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Mastercard, and PayPal. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard, short January 2025 $380 calls on Mastercard, and short June 2023 $67.50 puts on PayPal. The Motley Fool has a disclosure policy.

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