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Why You Might Want to Keep Renting Just a Little While Longer

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Becoming a homeowner is much like becoming your own boss. You don’t have to ask for permission to paint your walls a particular color and you don’t need to notify the rental office when you plan to have overnight guests. Of course, homeownership doesn’t come free, but you’re likely to get more leniency from your mortgage company for being a few days late than a landlord. At the same time, you don’t want to buy a home that comes with a 30 year mortgage for the sole purpose of being in complete control of your current housing.

With spacious duplexes for rent and cheap efficiencies available for short and long-term leases, you can get exactly what you need in a rental while waiting for the perfect opportunity to buy. It could be six months until you’ve ready to purchase a home or six more years before you’re ready to begin working on improving your credit profile. Even if have the money to buy, waiting could be the better choice in your situation.

Following Real Estate Value Trends

Often called housing bubbles, this is when property values are higher than they are expected to be in the near future. A home that is purchased for $200,000 might only be worth $150,000 in a year if and when the market slumps. Buying a home during a real estate bubble is bad for buyers for multiple reasons. First, you will be buying a home with fewer bedrooms, bathrooms, features, and amenities at a higher value than it is actually worth. Second, your mortgage is guaranteed to stay underwater for years after it is appraised for less than what you purchased it for. Lastly, if you buy a house during a housing bubble you will not get a good return if you attempt to sell it.

Waiting Longer to Buy Results in More Money Saved

There are mortgage programs that allow buyers to put very little money down on their homes. On one hand being able to buy a house without a down payment might be something that is beneficial to a limited number of people. If you don’t live in an area that traditionally has many rentals, buying a home makes sense if you want to live in an exclusive spot. Another fact that should be considered is that buying a home with little money in the bank probably means that you have issues with budgeting. Renting could help you to work out your financial problems and teach you how to spend responsibly so that saving isn’t troublesome for you.

Your Household Could Change Soon

No matter what stage you are in your life now, things can always change sooner than expected. If you’re single, the right guy or girl could be just about to enter your life. Married couples with children could become grandparents several times over in just the span of a year, while lifelong bachelors might decide to become the owner of a dozen pets. Giving yourself a bit more time to think about where you’re going in life can be helpful before you make a major decision and purchase a home.

You can buy a house and then turn right around and sell it, but most new homeowners purchase property for the purpose of making it their permanent, long-term residence. If you want to buy real estate but you can’t settle on the type of home you desire to live in, the neighborhood, or the price don’t make a decision that can’t be undone easily. Just wait a little longer and you will know when it is the right time to own.

40-Something and Saving for Retirement? Here Are 4 Tips

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You know that retirement is inevitable yet you find yourself in the situation of the majority who have failed to save enough to quit the workforce comfortably. How did you get to the place of being 40-something and unprepared? The good news is that there is still time to turn things around in the retirement department when you are in your 40s. Here are four tips for saving for your grand exit from the workforce later in life.

  1. Determine Your Retirement Age

You may have to work a few more years than the savvy young person who started saving in his 20s, but there is still enough time for you to make a decision on what age you would like to retire from the job sector. Many professionals decide to hang up their work hat during their 60s and definitely before turning 70-years-old. Your choice on how long you want to work, however, is entirely dependent on your willingness and health.

  1. Save Aggressively

You are technically behind the pact when you begin saving for retirement in your 40s, which is why your efforts must be intentional and consistent. At least 15 percent of your annual income should be set aside for retirement. Many individuals saving for their exit from the workforce contribute 20 percent of their yearly income to such efforts at age 40 and beyond. It is easiest to accomplish your annual saving goals when you set up automatic transfers from your checking account every pay period. All bonuses and should go towards your retirement fund.

  1. Take Full Advantage of Your Retirement Accounts

Many people leave free money on the table at their exit from the job sector because they are ill-informed about their pension plans. You should take the time to learn every aspect of your retirement accounts and contribute as much as you can to them. Also, make sure that you benefit from an employer’s offer to match your contributions if such incentive is available.

  1. Take Out Life Insurance 

In the event that your spouse and dependents rely on your income to live, it is important that you are covered with life insurance. By taking out a policy, you can be sure that if anything were to happen to you prior to retirement, then your loved ones would still be able to live comfortably.

  1. Decrease Debt

There is little point in you maxing out your retirement accounts and saving like crazy if you maintain debt that will follow you into the golden years. Consider paying off large accounts before you begin saving aggressively so that your frugal efforts can be of greater use to your overall plan.

Living a minimal lifestyle is essential to those getting a late start in their retirement savings. You cannot be a 40-year-old big spender working a traditional job and expect to have $2 million saved when retirement comes. Sacrificing your desires and only spending money on necessities is the best way to prepare for your grand exit from the workforce.