The Ugly Head of the Student Loan

Student Loans, Paying for College 2 Comments »

Student loans are great when you are in college, and don’t have the money to pay for school. But once you graduate and your 6 month grace period is over, then the payments start. Most people think that when you get out of school, you are going to have a $50/month payment, which is a drop in the bucket. Well, this is not always the case, and is getting harder to find with the cost of school spiking upward. The reality of it is, most student loans are about as bad as a car loan, if not worse, here’s why:

High Payments:

Let’s say you spent $50,000 in student loans, and you got a great consolidation loan after you graduated which put you at 3% interest. Well, even with a 15 year note, your payments are still going to be around $350/month. Ouch! How many of you out there have more money tied up in student loans?

Long Repayment Periods:

The previous example is pretty close to real life. My student loan repayment plan was 15 years. So when you compare that to a car loan, which typically is no more than 7 years in a repayment period, you are looking at the equivalent of buying 2 nice vehicles!

No Way Out:

That’s right, there is almost no way of getting out of paying for student loans. If you don’t already know, student loans survive bankruptcy! You can’t even go bankrupt and rid yourself of that ugly student loan. So the best way out of student loans is to be educated about them before going in to school.

The Solution:

You’ve seen the bad news, now let’s look at how to avoid this fiasco. As a high schooler, and I mean, even as a freshman, start seeking out the free money. There are an unbelievable amount of grants, scholarships and other means of acquiring money for college that you don’t have to pay back. Check out How to Find Scholarships for links and information on starting your quest to find that free money for school. It is well worth the investment.

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Creating a Wedding Budget

Budgeting 2 Comments »

Creating a Wedding BudgetHey guys, this is Jeffry’s wife, Sarah. I manage a blog about weddings, and Jeffry asked me to write a post for him today. Since I don’t know as much about managing money as I do about weddings, I figured I would stick with what I was good at. Weddings can be a huge and costly endeavor, and if you’re not careful, you could wind up spending a whole lot more than what you had intended. Statistics show that the average American wedding costs around $28 k. Crazy huh? Thats like a brand new (nice) car for the festivities of one day. I remember when we were planning our wedding, Jeffry was astounded at the costs some of our wedding vendors were wanting to charge. Most couples today wanting to get married can’t afford to spend that kind of cash to pay for their wedding. Whatever the case, it is advisable that every couple create their own wedding budget to help manage their spending while doing their wedding planning. Coming up with a wedding budget can be difficult, and here are some pointers to help you get started.

Determine Your Available Funds

Perhaps the first step in determining your wedding budget is to consider how much money you will have to spend on your wedding. This includes any money from parents and other family members, as well as any money you are planning on spending yourself.

Determine the Type of Wedding you Want

This is something that I cover extensively in my blog. If you only want to have a wedding with close friends and family, then you will not be looking at the kinds of costs that you would if you were planning a larger wedding. Also, another great piece of advice is to determine where you want to spend the bulk of money that you have allotted for your wedding. If you want to have a totally elegant and beautiful wedding ceremony, then spend the bulk of money on your church decorations, flowers and dress, and only have a small snack reception, or cake and punch reception.

Determine Your Costs

This step in creating your wedding budget can be a bit tricky, and will require some work. You’ll need to start getting initial pricing from such vendors as your wedding location, your caterer, florist, photographer, the dress you want and more to get an idea of what everything is costing, and adjust your budget accordingly. Don’t be afraid to negotiate, and get your pricing in writing, with how long the pricing will be good for. Talk to as many vendors as you can, and look for ways to cut cost.

Adjust Your Wedding Budget Accordingly

Once you have all of your pricing, you’ll have an idea of what kinds of funds you’ll need to get the kind of wedding that you want. If you find you’ll need extra funds, then you can look for ways to cut costs, or just look for a short term loan at a low interest rate. With the Fed lowering rates, you’re sure to get a great interest rate on a loan.

I can’t tell you how easy it is to go over your wedding budget if you aren’t careful. I remember I had a really difficult time staying within my budget, and even went over my budget a little bit right at the end. There are lots of tips and tricks that you can use to cut costs at your wedding, so take advantage of all the information that you can to help ensure that you have the wedding of your dreams, at a cost you can afford.

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Screen Your Tenants, Trust Your Instincts

Real Estate Investing No Comments »

Through the course of this whole fiasco, I have confirmed one thing. Screen, screen, screen your potential tenants. Now I knew that this was important in the beginning, but it has really been brought to life with the set of circumstances I am dealing with now. The nice thing is, all my tenants have caught up, and so I am in clear, with some extra income due to tenants paying late fees.

But not only do you need to screen your potential tenants, you still need to put some merit on your instincts. If someone has an excellent rental application, and what you are able to verify is true, but they just don’t feel right to you, it may be a good idea to steer away from them. One of the tenants that I am renting to had problems in the past, and I had a bad feeling. But I decided to give her a chance, and I now have to deal with late rent every month. Now she has come up with the money, so in the end I am doing better than expected due to being able to collect late fees, but it is still a hassle.

So take it from me, check the rental, credit and job history of your potential tenant, and then trust your instincts for the final decision. You will probably find yourself in a much better position in the long run…

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Getting Back on Track in the RE Game

Real Estate Investing No Comments »

It has been tough, but the Lord is good. The two renters I mentioned in my post on Eviction Notices decided to pay their rent and fees. I got the full amount from both toward the end of the week last week, just before submitting the actual eviction notices. So getting an extra $300 or so in late fees really makes the picture look better when I look at the net effects for January.

As you may or may not know, eviction hurts everyone involved. There are no winners. The tenants lose their home, and the landlord loses rent, court fees (assuming they don’t move out when instructed) and advertising costs to find a new tenant — everybody loses. So it is safe to say that I was very relieved to see the money come in.

So now it is back to concentrating on getting 4 different properties that I am managing leased. I am getting many calls in on the different properties, just haven’t gotten anything closed. Most people I am running into have bad credit, and I really don’t want to work with people that can’t pay. The two renters that I have had problems with both had bad credit, however I do have another tenant with bad credit that has paid on time every month. Are there any tenants out there with good credit? Please step up, I have some quality properties to put you in to.

The latest 2 duplexes have really been a great investment. They are making far more than the 1% that the typical investor looks for. One duplex that we have, if the top rents for about as much as the bottom (they are identical so it should rent for about the same amount) then we will be making over 2% on the rent. So we will see what happens, I need to go now, I have a showing for that duplex at 10 AM. Please leave your feedback/questions at the bottom of the page.

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Getting a Handle on Your Finances in 2008

Budgeting No Comments »

This is a good article on starting off your 2008 finances in the right direction. It gives some tips about budgeting, getting out of debt, and just sound advice about sure footing in personal finance. We all need to do better with our finances in 2008 than we did in 2007, so click the link, read up on it, and then come back here and submit your questions, I’ll be glad to answer them. Check it out guys (and gals).

read more | digg story

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The Rental Day of Reckoning

Real Estate Investing No Comments »

It has come to it. The last day for redemption. If my two renters in default do not come up with their required rent and late fees today, and eviction letter will come tomorrow. This is especially difficult for me as there are no winners in an eviction. The tenant loses their residence, and the landlord is left with no potential income. But letting them stay without paying is even worse for me as the landlord, so they will have to go.

Texas law says that I must give them 3 days notice to vacate the property (unless the lease contract specifically states otherwise), and even at the end of the three days, I still cannot force them out. If they refuse to move out, then I have to go to the Justice of the Peace, and file an eviction, as well as pay a $65 fee for the action. Just a side note, but where are my taxes going? I can’t think of anything that I don’t have to pay additional for, except for the public park that my wife and I take walks in.

On a better note, one of the duplexes we just bought has the new water meter installed. So now I will need to get with my plumber to do the switchover. At least this tenant is paying…

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Renters Still Not Paying…

Real Estate Investing 2 Comments »

Everyday it is the same thing…no money. I just don’t understand people. To me, paying your rent/mortgage should be at the very top of your priority list (except for tithes and offerings). I have gone hungry and would do it again if it came between paying bills and eating. In college I had a part time job and just about no money. I just barely had enough to cover the rent and bills. So what I did was bought 59 cent bread, 49 cent lunch meat, slice cheese and a little mayo and rationed it out as long as possible. On occasion I would buy the frozen burritos, and ration them as well. Long story short, I lost about 20 pounds between graduating college and getting my first career position.

But most people these days don’t do that. They put there cable, internet, phone and a host of other bills ahead of their rent. I know I am just venting here, but it really doesn’t make sense to me to see a tenant that has other non-essential bills that they are paying when they cannot maintain their rent. Am I crazy?

Has any other investors out there been in my shoes? Please share your stories, to give a little encourage to the rest of us.

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Eviction Notices

Real Estate Investing 3 Comments »

Well I guess that I was mistaken, or perhaps mistaken in renting to single mothers with credit problems due to divorce. The renters that I have in my trailer and in my 2 bedroom, 1 bath house still have not paid for January’s rent. Each of these tenants have been late every month, but have successfully come up with the rent and all late charges. But February is getting oh so close, and I need to do something about it. I have never had to evict before, so this is going to be a tough one for me.

I was able to get a phone conversation with the tenant in my trailer, and she said they are waiting on getting a tax refund check in, that was supposed to be in last Friday. I am fully aware of how people will lie and deceitfully use others to get what they want, but I am going to hold off on the first notice letter until tomorrow, as they said that the money should be there today. We will find out…

Regarding the single mother in the 2 bedroom, 1 bath house, I guess I am just going to have to submit notice to them. I am no longer able to reach them by telephone (I guess they had their number disconnected) and I have driven by a couple of times, and there has been no one home. I really hate the concept of eviction notices, but I guess it is a part of being a landlord.

But as a word of encouragement to all the other real estate investors out there, keep your head up during these times. At the very least, I will be able to keep the deposit on the house, and the location of it merits a quick turnaround, so maybe I can get someone in there pretty soon.

Till next time…Sign up for my RSS feed, and get the latest updates automatically through a medium of your choice.

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An Alternative Budgeting Method

Budgeting No Comments »

For some folks out there, budgeting on a “month cost” method just doesn’t work for them. They have enough money coming in from their job to be able to afford the fast food, movies, and other entertainment that will just kill your budget. They don’t really have the concept of staying on budget, and sticking to what they had planned to spend. There is one such lady in our Church that I talked with a few days ago regarding just such a situation.

In this case, she is a single mother, two kids, and works as a nurse for a local hospital. She makes good money, and is able to afford the little things like going out to eat a lot, getting drinks at the gas station all the time; little things that will just destroy a budget. She wants to do better with her budget, and has tried at one point to chart all of their expenses, and got depressed when she noticed what she was spending.

For her, sticking to a monthly budget would be hard. She identified their main problem though - going out to eat at fast food places too much. This is a problem for a lot of people out there, but with a little discipline, it can be overcome. Since she has trouble maintaining a monthly budget, I offered this solution to her:

Instead of trying to keep a dollar tight budget, how about setting a maximum number of times per week to go out?

Let’s say she limited their number of times to go out to 3 per week. If she is able to stick to that, she would see a dramatic decrease in the total money spent over the month. Try it out sometime, just promise to only spend the additional money at the gas station or the fast food restaurant 2-3 times per week. So when you get the urge to go inside the station and get that coke, you may back off, to keep to the limit you set. I use this method as well, we go out twice a week, often I will grill once a week, and on a rare occasion we will get a Dr. Pepper at one of the local gas stations (it’s something about the way they mix the Dr. Pepper in their fountain drinks, it’s just really good).

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Some Simple Credit Card Warnings

Credit Cards 1 Comment »

Credit cards can be disastrous, and the credit card companies are becoming even more sneaky when it comes to interest and fees. Here are some quick tips to watch out for when dealing with these financial monsters:

  1. “Fixed” Interest isn’t always fixed.
    Often, credit cards have clauses in the terms and conditions that will allow them to jack up your rate in the event of default, or even based on continual credit reviews they perform on you. That means if you have a 30 or 60 day late payment on a different line of credit, your credit card may jack the interest rate on you, even if you have been perfect in your payments with them.
  2. Don’t go over your credit limit.
    An over-limit fee of $20, $25, or more is assessed for going over your credit card’s limit. This may not be a one time fee either. They may charge this fee each and every month you remain over your credit limit. Most credit card companies have a way for you to review your account online, use this service, and keep a close eye on what you are spending.
  3. Make timely payments.
    I can’t stress this point enough. You cannot be late with your credit card company. You must make your payments, and establish good credit. All it takes is a couple of late payments to really put a bite in your credit, and then when you want to go buy that house, you can’t.

I have said it before and will say it again, credit cards are a good way to build up credit when you have none. However, they are very dangerous, because you get the euphoric feeling that you can get whatever you want because you have a piece of plastic to buy it with. Be smart, use your card as a credit building tool, not a license to shop.

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