Three Apps That Make Budgeting a Breeze
Budgeting is one of the most important aspects of managing your personal finances, yet maintaining a budget can seem overwhelming, especially if you aren't great with math. Budget apps help bring the complicated world of budgeting into the twenty-first century. Many financial apps are designed to manage complex financial situations like investment portfolios and complicated taxes. But these also tend to be pricey options. If you're living paycheck-to-paycheck like many Americans, you'll want a budgeting app that does the simple stuff without breaking the bank. The most affordable and easy-to-use apps are the ones that keep it simple. All you need is to learn how to create your budget, how to track your spending, and how to track your financial progress. Honeyfi​ is a free budgeting app that can be used by both single people and couples. While the app lacks a web-based option, it does sync across multiple accounts. The automation features allow the program to create a budget for you by analyzing your spending in the past. You have full customization control over your budget, including the ability to create as many categories as desired. Much of the budgeting work is done automatically, but you can also manage it manually. When the app syncs between partners, you can limit visible transactions and communicate about purchases through the app itself.
EveryDollar​ provides the best user experience for a budgeting app. The manual tracking version is free, but you'll need to pay an annual price to access the automation features. This app is specifically designed for zero-based budgets, but you can also incorporate other budget styles. The interface is intuitive, clean, and pleasing to the eye. You also don't have to wade through a ton of affiliate offers and ads. Mint​ by Intuit is a free budgeting app that comes with a variety of extras. Because of the completely free setup, you will have to deal with ads and upsells. However, it is easy to view your transactions, and you can sync unlimited financial accounts. Unlike many other apps, this option tells you your credit score. It can also use your past bill history to predict your future bills, and it'll warn you when upcoming bills are close to due.
Transitioning From Two Incomes to One
There are many reasons why a family might transition from two incomes to one. From workforce reductions to family plans, making this change can be more difficult than one might assume. Fortunately, there are steps to take that can make the process feel more manageable.
Understand Your Situation Start your management process by assessing your situation. How much do you have in savings? Is this going to be a long-term reduction, or is the impacted party likely to find another job soon? These are the questions that are going to define your financial life as you move forward, so ask them early so that you can get a reasonable picture of what your future will bring.
Assess Your Budget Your next step is to assess your budget. You will be bringing in less money overall, of course, but also make sure to account for the fact that certain work-related expenditures won't happen. Your goal here should be to see what you can eliminate from your budget without interfering with the necessities. You may find that you can still pay your bills with ease by eliminating certain other less-necessary expenses from your life. Regardless of how easy or difficult expenses are to cut, a budget will allow you to understand better where your money is going.
Avoid Panic Moves
Finally, take some time to breathe. Do not make major life changes out of panic. While losing a job can impact your life, stop before you start emptying out your retirement accounts or taking out payday loans to pay your bills. It is easy to get into a cycle of overwhelming debt when you look at short-term solutions, so pause for a few moments to adjust your budget and see if there are less drastic ways that you can make up for your shortfalls. Making the transition to a one-income household is difficult, but there are changes that you can make to ensure that it is less financially devastating for your family. Whether you are making this choice based on household needs or are forced into the situation by forces outside of your control, you can take ownership of your financial future by carefully assessing your ongoing needs.
Should You Make Different Versions of Your Budget?
Budgeting is the cornerstone of financial management. By drawing up a budget and sticking to it, you create a plan to reach financial goals and keep from falling into debt. But unexpected income or unexpected expenses can crop up. The same budget that works for you one month might not accurately reflect your costs the following month. So what can you do? You can create several different budgets and decide which to use based on your financial situation during that particular month. Experts recommend having three main budgets: one for times of economic growth, one for times of penny-pinching hardship, and one for relatively stable and average needs. Your lean budget is designed for when you don't have much disposable income to spare. This is the budget you should use to cover your barest costs without any other frivolous expenses. The lean budget includes everything necessary for survival and no more. This is the budget you draw up when you want to see the absolute minimum income you need to survive every month. Instead of focusing on outings or investments, this budget should be all about covering childcare, housing, utilities, clothing, transportation, food, and medication. Moderate budgets are the budgets that you use in a normal circumstance. In addition to covering your bills, it should include voluntary expenses like eating out or purchasing entertainment.
Fun money isn't the only added aspect of this budget. It should also take into account savings goals and debt repayment. Some budgets may be structured using percentages, while others might use a zero-based method to account for every specific dollar. Your fat budget is for the times when money abounds. Maybe you've just gotten a bonus at work, been given a promotion, or received an inheritance. Whenever you have more income than you're used to, the fat budget helps you to manage it responsibly instead of blowing it all at once. One of the key aspects of a fat budget is that it should include investments. By using some of the surplus cash to pay your 401(k) or pay back your debt, you can push yourself closer to your overall financial wellness goals. Even though you should use excess income wisely, you can still add certain splurges to a fat budget.
How to Financially Adapt During a Crisis
There are a lot of serious situations that can interrupt your day-to-day life. Suppose you're facing a crisis like a sudden death in the family, an unexpected emergency, the loss of a job, or a serious illness. In that case, you'll need to adjust your finances to the new circumstances. COVID has introduced unique challenges for the American people. It's common to feel as though there's nothing you can do when faced with a crisis. But even though you can't control the situation itself, ​you can control certain aspects of your finances​. When you're in crisis, it's time to go into survival mode. That means creating a budget that conserves your money as much as possible while still covering your essential expenses. The first step is to cut out nonessentials. That might mean anything from eating out to appointments at the hairdresser. It might include frivolous purchases or unnecessary products like cosmetics. A necessity-based budget only has room to cover electricity, medicine, shelter, water, and food. You should also make sure that you're taking care of any required debt repayments, as the penalties for not making your payments may impact your financial future. The next thing to do is to pause your subscriptions and service contracts. That might mean your internet, cable, or phone. Some of these you may need to keep for working and communication purposes.
Do your best to halt excess repayment of your debts. You should be making the absolute bare minimum payment necessary to fulfill your obligations. If you apply for relief or a deferment with many types of loans, you can postpone your payments until the future. But most relief programs are only available if people reach out and ask about them. Now that you've created a budget from the absolute bare essentials, it's time to take another look at those essentials. Are there any places that you can eliminate costs? Coupons and store-brand products can be used to save food money. Prescription discount cards may be able to get you your medicines for lower prices. You can also lower your utility and gas costs by reducing your overall transport and electricity usage. With a crisis budget, any little bit of savings counts. Go over every part of the budget and look for ways to save.
Have VA Loans Become More Popular in 2020?
Data indicates that VA loans are significantly more popular in 2020 than they were in previous years. Due to the coronavirus pandemic, the average mortgage rates have hit record lows. This has encouraged many homebuyers to take advantage of the situation so they can own their own property. Meanwhile, existing homeowners have fought to refinance their current mortgages. With all of this loan activity happening, the increase in VA loans isn't all that surprising. Since 2020 began, ​the VA loan activity rates​ have more than doubled. Nearly one million loans were backed during the year's first three quarters. In addition, purchases involving the VA have increased by seven percent. A majority of the growth can be attributed to young people buying their first homes. To qualify for a VA loan, you must be the spouse of a military member who died while on duty, an active military member, or a former military member. If you do meet these requirements, applying can be great for your finances. The most significant advantage is that these loans don't require a down payment on a mortgage, so they're more accessible to families on tighter budgets. Qualifying for VA loans also tends to be easier than qualifying for traditional mortgage lending. Instead of being controlled by a financial institution, these loans are controlled by the Department of Veterans Affairs. You don't even have to meet a minimum requirement for your credit score.
VA loans also don't require you to purchase private mortgage insurance if you're unable to pay 20 percent of the home's cost upfront. Mortgage lending institutions require people to make this purchase to secure their finances. There are the occasional drawbacks to the VA loan structure. These loans include a funding fee, which varies based on how much you can offer for a down payment and whether this is the first loan you've taken from the VA. Even so, if you can't afford a lump sum out-of-pocket, you can add this fee to your monthly payments and pay it off slowly over time instead. If you have a stable enough financial future to pay for homeownership costs, now is an excellent time to apply for a VA loan. It's much easier than a traditional mortgage application process.
How VA Loan Holders Can Seek Relief During COVID-19
The COVID-19 pandemic has led to widespread economic troubles throughout the US. Many people are struggling to make their mortgage payments because they've lost their jobs or had their work hours seriously reduced. This is without taking into account the financial stress that comes from increased childcare expenses and potential medical expenses. Many veterans and active military service members have a VA loan instead of a traditional mortgage. A VA loan is a loan from the Department of Veterans Affairs that allows you to purchase a home without meeting minimum credit score requirements or putting down a large down payment. If the pandemic has made it difficult to meet your VA loan deadlines, ​veterans can apply for special help​. The coronavirus stimulus package offers any borrower the option to deal with financial hardship to enter into a mortgage forbearance option. This option modifies the payment schedule you already have by reducing or suspending your payments over a certain period of time. A forbearance agreement is designed for coping with short-term issues by lowering or delaying the monthly payments. You will typically be expected to pay the full cost of your mortgage with time, but you have the chance to recuperate financially. Federal government laws back VA loans. Any company issuing a VA loan is required by law to give you forbearance upon request. You don't need to prove that you're dealing with financial hardship. The same criteria applies to federally backed loans from the Department of Agriculture and the Federal Housing Administration.
When you struggle to make mortgage payments, the first step is immediate contact with your lender. You can explain your situation and create a payment plan that minimizes your potential late fees. If your mortgage lender agrees to specific terms over the phone, be sure that they're put down in writing somewhere. This doesn't have to be a formal contract and can be something as simple as an email. The coronavirus package allows people to request a mortgage forbearance for up to 180 days. When this period expires, people may put in a second request for another 180 days. The package doesn't affect your credit score, though. If you're late with payments before requesting the forbearance, you'll still see a credit hit.