Alan Fraser Houston
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Food Budgets
Budgeting, Food Budgets, Frugal Living

How to Budget Groceries: 11 Easy Tips

Have you ever sat down to go over your budget only to find out that you’ve outrageously overspent on food? Local, organic, artisan goods and trendy new restaurant outings with friends make it easy to do. With food being the second highest household expense behind mortgage or rent, our food choices have a huge impact on our budget. Using this monthly budget calculator can also help guide how to budget for food. 

You may be surprised to find out that the most nutrient-dense foods are often the most budget-friendly. It’s not only possible, but fun and easy to eat nourishing, delicious food while still sticking to your budget. Here are 11 ways to help you learn how to budget groceries.

1. Track Current Spending

Before you figure out what you should be spending on food, it’s important to figure out what you are spending on food. Keep grocery store receipts to get a realistic picture of your current spending habits. If you feel inclined, create a spreadsheet to break down your spending by category, including beverages, produce, etc. Once you’ve done this, you can get an idea of where to trim down spending.

2. Allocate a Percentage of Your Income

How much each household spends on food varies based on income level and how many people need to be fed. Consider using a grocery calculator if you’re not sure where to start. While people spent about 30 percent of their income on food in 1950, this percentage has dropped to 9–12 today. Consider allocating 10 percent of your income to food as a starting point, and increase from there if necessary.

3. Avoid Eating Out

This is the least fun tip, we promise. Eating out is a quick and easy way to ruin your food budget. If you’re actively dating or enjoy going out to eat with friends, be sure to factor restaurants into your food budget — and strictly adhere to your limit. Coffee drinkers, consider making your favorite concoctions at home.

4. Plan Your Meals

It’s much easier to stick to a budget when you have a plan. Plus, having a purpose for each grocery item you buy will ensure nothing goes to waste or just sits in your pantry unused. Don’t be afraid of simple salads or meatless Mondays. Not every meal has to be a gourmet, grandiose experience.

5. Keep a Fridge Grocery List

Keep a magnetized grocery list on your fridge so that you can replace items as needed. This ensures you’re buying food you know you’ll eat because you’re already used to buying it. Sticking to a list in the grocery store is an effective way to keep yourself accountable and not spend money on processed or pricey items — there’s no need to take a stroll down the candy aisle if it’s not on the list.

6. Eat Before You Go to the Store

If your mother gave you this advice growing up, she was onto something: according to a survey, shoppers spend an average of 64 percent more when hungry. Sticking to a budget is all about eliminating temptations, so plan to eat beforehand to eliminate tantalizing foods that will cause you to go over-budget.

7. Be Careful with Coupons

50 percent off ketchup is a great deal — unless you don’t need ketchup. Beware of coupons that claim you’ll “save” money. If the item isn’t on your list, you’re not saving at all, but rather spending on something you don’t truly need. This discretion is key to saving money at the grocery store.

8. Embrace the Bulk Section

Not only is the bulk section of your grocery store great for cheap, filling staples, but it’s also the perfect way to discover new foods and bring variety into your diet. Take the time to compare the price of buying pre-packaged goods versus bulk — it’s almost always cheaper to buy in bulk, plus eliminating unnecessary packaging is good for the planet.

Bonus: a diet rich in unprocessed, whole plant foods provides virtually every nutrient, ensuring optimal health and keeping you from spending an excess amount on healthcare costs.

9. Bring Lunch to Work

Picture this: you’re trying to stick to a strict food budget, and one day at work you realize it’s lunchtime and you’re hungry. But alas, you forgot to pack a lunch. All the meal planning and smart shopping in the world won’t solve the work-lunch-dilemma. Brown-bagging your lunch is key to ensuring your food budget is successful. Plus, it can be fun! Think mason jar salads and Thai curry bowls.

10. Love Your Leftovers

Would you ever consider throwing $640 cash into the trash? This is what the average American household does every year — only instead of cash, it’s $640 worth of food that’s wasted. With millions of undernourished people around the globe, throwing away food not only hurts our budget but is a waste of the world’s resources. Tossing food is no joke. Eat your leftovers.

11. Freeze Foods That Are Going Bad

To avoid wasting food, freeze things that look like they’re about to go bad. Fruit that’s past its prime can be frozen and used in smoothies. Make double batches of soups, sauces, and baked goods so you’ll always have an alternative to ordering takeout when you don’t feel like cooking.

Sticking to a food budget takes planning and discipline. While it may not seem fun at first, you’ll likely find that you enjoy cooking and trying a variety of new foods you wouldn’t have thought to use before. Being resourceful and cooking healthfully is a skill that will benefit your wallet and waistline for years to come.

 

Sources: Turbo | Fool | Forbes | Medical Daily | GO Banking Rates | Value Penguin

The post How to Budget Groceries: 11 Easy Tips appeared first on MintLife Blog.

Source: mint.intuit.com

Financial Planning, Food Budgets, Personal Finance

3 Financial Self-Care Habits You Can Start Today

If you’re someone who struggles with financial anxiety and stress, practicing a financial self-care routine could help. Just like other areas of your life, the more consistent you are about financial self-care, the better. This is why I am emphasizing the idea of building habits. The reality is that anxiety and stress are life’s constants. We ourselves don’t have the luxury of removing those factors from our environment, but what we do have are tools to help manage and reduce them. 

Before I get into it, I want to note that there’s a pretty extensive list of financial-self care options available, but what I’ve realized is that when we are struggling, we often overcommit ourselves to perfectionism instead of trying to be a little less imperfect. I’m the first to admit that it’s really tough not to go all-in when reading advice that sounds life-changing. Often, we find ourselves trying out anything and everything to feel in control, and it is for this reason that I won’t offer you the extensive list today. Instead, I hope to help you focus on taking things slow for once so that you don’t set yourself up for failure (and ultimately right back in the anxiety-ridden state you first found yourself in). You can view these three foundational habits as a starting point for a long-term financial self-care routine that you will work to enhance over the course of your life. With this in mind, let’s dive in.

HABIT # 1: REVIEW & CATEGORIZE YOUR TRANSACTIONS DAILY

Building awareness of what and how much you’ve spent can be a game-changer. This habit not only takes the dreaded guessing game out of your end-of-month leftover income and total spending, but it can help you course-correct throughout the month to ensure you hit budgeting goals, cut back in areas you may find yourself regretting, or even upping your spend in areas that bring you joy. A few added bonuses of this habit include saving time at the end of the month if you’re someone that typically sits down for 4-5 hours to get yourself organized, in addition to helping you catch fraudulent transactions faster! 

Pro tips for building this habit: 

  • Make it easy: If you don’t already use Mint, download the app today to have all of your transactions organized and easily viewable in one place. 
  • Make it obvious: Set a calendar reminder on your phone to check Mint each day at the same time. I’d recommend early morning before your day gets busy.
  • Make it attractive: Check your spending after a ritual or habit you enjoy doing. For example, after you sit down to drink your coffee, open up Mint to review your transactions.    
  • Make it satisfying: After reviewing your transactions, do something rewarding. For example, after categorizing and reviewing, consider checking it off your to-do list for the day to feel progress.

HABIT # 2: CHECK YOUR SAVINGS ACCOUNT(S) DAILY

Checking your savings accounts is a great way to flood your brain with positivity about your financial situation. Having savings is a rewarding feeling, and even more rewarding, is seeing your savings progress over time. Getting in this habit will also be a good reminder to actively save for each of your financial goals. 

Pro tips for building this habit: 

  • Make it easy: Connect your savings accounts to Mint and use the goal-setting feature that allows you to customize your savings goals and connect your savings account to easily track your progress. 
  • Make it obvious: Consider setting your phone’s background to a photo of something you’re saving for so that everytime you check your phone, you’ll be reminded of saving. Mint also allows you to add photos of your goals in the web version and in the app. 
  • Make it attractive: In addition to checking your savings right after reviewing your transactions in Mint, consider starting a savings group with your friends and family. No need to talk about how much you’ve saved, but you can talk about your goals and turn to the group for motivation when you’re tempted to spend what you would normally save. 
  • Make it satisfying: Make sure to give yourself credit for doing this habit by also crossing it off as a separate to-do list item. Try to also make it a rule to never miss checking your savings twice in a row. Skipping a day here and there because life gets in the way is totally normal, just make sure to commit yourself to doing it the next day. 

HABIT # 3: REWARD YOURSELF 1X PER WEEK

I saved the best for last. Rewarding yourself is a critical step that most skip when trying to become more disciplined. Self-control can be a draining experience, especially at first. Make sure to set aside “free time” each week to do something for yourself. It doesn’t have to be big, and it doesn’t have to require a lot of money. Think of it as a way of telling yourself good job for working hard and trying to improve. 

Pro tips for building this habit*: 

  • Make it easy: Consider making your reward something that takes less than 2 minutes to start doing. Perhaps it’s turning on a Netflix show, making an easy dessert, grabbing a coffee at the Starbucks you just walked by, or even dancing in your living room to your favorite song. 
  • Make it obvious: As I write this, it sounds weird, but for some of us, setting aside time for ourselves isn’t something we’re good at, so commit yourself to a consistent day and time that’s for you to do what you want.

*Making it attractive and satisfying isn’t necessary here because the reward in and of itself will reinforce the habit. 

 

With that, you now have 3 habits to start building a financial self-care routine. Give this a shot, and let me know how it goes in the comments below. 

The post 3 Financial Self-Care Habits You Can Start Today appeared first on MintLife Blog.

Source: mint.intuit.com

Food Budgets

Check-In: Expecting Couple Struggling with Debt, But Future Looks Bright

When I first connected with Julia and John, the Queens, NY couple was expecting their first child and grappling with some debt, a lack of savings and income prior to the baby’s arrival. The couple was basically living paycheck to paycheck and in need of some advice to break through that cycle.

We reconnected this month to see how they’ve been doing. Julia is now nearing the end of her third trimester. The baby is due to arrive in two months.

I was hoping that with a baby on the way the couple would have found some ways to chisel away their debt or bulk up savings. Unfortunately, fie months later, they’re more or less still in the same money boat.

But they did act upon a couple of my tips and are benefiting from the goodness of New York and their parents, which has their futures looking brighter.

First, John, who lacks a college degree and was struggling to find full-time work, is going back to school. Not to a college or university, but to a 9-month software boot camp in New York that’s going to give him the skills and network to become a software developer. His potential earnings in the first year in the market could be as much as $75,000 (based on some people I know who’ve gone through similar programs in New York.)

The program will be about $15,000, a fraction of what it would cost to earn a bachelor’s degree. John’s parents have agreed to loan him the money. The couple’s decided to place that $15,000 family loan in savings and, instead, take out a small student loan to pay for John’s school. I agree with that strategy, given that their family is about to increase in size and having some cash on hand will be very important.

Once John completes school and finds work, I’d recommend the couple prioritize the credit card debt by paying at least double the minimums each month. Be most aggressive with the highest interest credit card debt first. Their student loan will likely have a smaller interest rate and can be paid over a 10-year period, making the monthly minimums relatively manageable. Automate those payments as soon as possible and benefit from a 0.25% interest rate reduction when they do.

While they’re taking on more debt, I’m okay with it. Investing in John’s education is one of the best ways this couple can get ahead and better secure their finances in the future – so long as they commit to earning more and paying it down.

Ahead of that program starting, John’s also taken on a side hustle (per my advice). He’s been working a few shifts here and there at Julia’s company, working with special needs patients as a social aide, taking them to community and outdoor events.

Some other good news that’s developed since we last spoke is that New York State has enhanced its Family and Medical Leave Act by implementing Paid Family Leave. In the past, certain employers were only required to provide workers with their jobs back after taking a leave of absence for up to 12 weeks. Now, qualifying private employers must provide paid time off and a continuation of health insurance for 8 weeks in 2018.

This came as a surprise bonus for Julia, who was preparing for zero paid time off from her employer.

It would be my recommendation to use part or all of that extra money to pay down their high-interest credit card debt.

Once Julia returns to work after her maternity leave, her mother-in-law will be the go-to caretaker during the day, another huge help.

They’re fortunate to have free childcare from a trusted, loved one. With that very big expense covered and John’s schooling about to start, I feel confident that the couple’s future is a financially bright one.

The post Check-In: Expecting Couple Struggling with Debt, But Future Looks Bright appeared first on MintLife Blog.

Source: mint.intuit.com

Financial Planning, Food Budgets

What Is a Jumbo Loan? Finance Your Property in a Competitive Market

After years of building a stellar credit history, you may have decided you’re finally ready to invest in that vacation home, but you don’t have quite enough in the bank for that eye-catching property just yet. Maybe you want to begin your investment journey early so you don’t have to spend years bulking up your life’s savings.

If an aspiring luxury homeowner can’t sufficiently invest in a property with a standard mortgage loan, there’s an alternative form of financing: a jumbo mortgage. This mortgage allows those with a strong financial history who may not necessarily be a billionaire to get in on the luxury property market. But what is a jumbo mortgage (commonly known as a jumbo loan), and how exactly does it work?

Jumbo Loan Definition

A jumbo loan is a mortgage loan whose value is greater than the maximum amount of a traditional conforming loan. This threshold is determined by government-sponsored enterprises (GSE), such as Fannie Mae (FHMA) and Freddie Mac (FHLMC). Jumbo loans are for high-valued properties, like mansions, luxury housing, and homes in high-income areas. Since jumbo loan limits fall above GSE standards, they aren’t guaranteed or secured by the government. As a result, jumbo loans are riskier for borrowers than conforming mortgage loans.

Jumbo loans are meant for those who may earn a high salary but aren’t necessarily “wealthy” yet. Lenders typically appreciate this specific group because they tend to have solid wealth management histories and make better use of financial services, ensuring less of a risk for the private investor.

Due to the uncertain nature of a jumbo loan, borrowers need to present an extensive, secure credit history, as well as undergo a more meticulous vetting process if they’re considering taking out a jumbo loan. Also, while jumbo loans can come in handy for those without millions in savings, potential borrowers must still present adequate income documentation and an up-front payment from their cash assets.

Like conforming loans, jumbo loans are available at fixed or adjustable rates. Interest rates on jumbo loans are traditionally much higher than those on conforming mortgage loans. This has slowly started shifting over the last few years, with some jumbo loan rates even leveling out with or falling below conforming loan rates. For example, Bank of America’s 2021 estimates for a 5/1 adjustable-rate jumbo loan were equivalent to the same rate for a 5/1 adjustable conforming loan.

The Federal Housing Finance Agency (FHFA) has set the new baseline limit for a conforming loan to $548,250 for 2021, which is an increase of nearly $40,000 since 2020. This new conforming loan limit provides the new minimum jumbo loan limits for 2021 for the majority of the United States. As the FHFA adjusts its estimates for median home values in the U.S., these limits adjust proportionally and apply to most counties in the U.S.

Certain U.S. counties and territories maintain jumbo loan limits that are even higher than the FHFA baseline, due to median home values that are higher than the baseline conforming loan limits. In states like Alaska and Hawaii, territories like Guam and the U.S. Virgin Islands, and counties in select states, the minimum jumbo loan limit is $822,375, which is 150 percent of the rest of the country’s loan limit.

Jumbo Loan Rates for 2021

Ultimately, your jumbo loan limits and rates will depend on home values and how competitive the housing market is in the area where you’re looking to invest.

Jumbo Loan vs. Conforming Loan: Pros and Cons

The biggest question you might be asking yourself is “do the risks of a jumbo loan outweigh the benefits?” While jumbo loans can be a useful home financing resource, sometimes it makes more sense to aim for a property that a conforming loan would cover instead. Here are some pros and cons of jumbo loans that might make your decision easier.
Pros:

  • Solid investment strategy: Jumbo loans allow the investor to get a solid jump-start in the luxury real estate market, which can serve as a beneficial long-term asset.
  • Escape GSE restrictions: Jumbo loan limits are set to exceed those decided by Freddie Mac and Fannie Mae, so borrowers have more flexibility regarding constraints they would deal with under a conforming loan.
  • Variety in rates (fixed, adjustable, etc.): Though jumbo loan rates differ from conforming loan rates in many ways, they still offer similar options for what kinds of rates you want. Both offer 30-year fixed, 15-year fixed, 5/1 adjustable, and numerous other options for rates.

Cons:

  • Usually higher interest rates: Though jumbo loans are known for their higher interest rates, the discrepancies between those and conforming loan rates are starting to lessen each year.
  • More meticulous approval process: To secure a jumbo loan, you must have a near air-tight financial history, including a good credit score and debt-to-income ratio.
  • Higher initial deposit: Even though jumbo loans exist for those who are not able to finance a luxury property from savings alone, they still require a higher cash advance than a conforming loan.

Jumbo Loan vs. Conforming Loan- Pros and Cons

How To Qualify for a Jumbo Loan

As we mentioned before, jumbo loans require quite a bit more from you in the application process than a conforming loan would.

First and foremost, most jumbo lenders require a FICO credit score of somewhere around 700 or higher, depending on the lender. This ensures your lender that your financial track record is stable and trustworthy and that you don’t have any history of late or missed payments.

In addition to the amount of cash you have sitting in the bank, jumbo lenders will also look for ample documentation of your income source(s). This could include tax returns, pay stubs, bank statements, and any documentation of secondary income. By requiring extensive documentation, lenders can determine your ability to make a sufficient down payment on your mortgage, as well as the likelihood that you will be able to make your payments on time. Usually lenders require enough cash assets to make around a 20 percent down payment.

Finally, and perhaps most importantly, lenders will also require that you have maintained a low level of debt compared to your gross monthly income. A low debt-to-income ratio, combined with a high credit score and sufficient assets, will have you on your way to securing that jumbo loan in no time.

Furthermore, you will also likely need to get an appraisal to verify the value of the desired property, in order to ensure that the property is valued highly enough that you will actually qualify for a jumbo loan.

Key Takeaways:

  • Jumbo loans provide a solid alternative to those with a steady financial history who want to invest in luxury properties but don’t have enough in the bank yet.
  • A jumbo loan qualifies as any amount exceeding the FHFA’s baseline conforming loan limit: $548,250 in 2021.
  • Jumbo loan rates are typically higher than those of conforming loans, although the gap between the two has begun to close within the last decade.
  • To secure a jumbo loan, one must meet stringent financial criteria, including a high credit score, a low DTI, and the ability to make a sizable down payment.

For any financially responsible individual, it’s important to always maintain that responsibility in any investment. Each decision made should be carefully thought out, and you should keep in mind any future implications.

While jumbo loans can be a valuable stepping stone to success in competitive real estate, always make sure your income and budget are in a secure position before deciding to invest. You always want to stay realistic, and if you aren’t interested in spending a few more years saving or financing through a conforming loan, then a jumbo loan may be for you!

Sources: Investopedia | Bank of America | Federal Housing Finance Agency

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