How to Make a Side Income Running a Vending Machine Business

As we continue to make our way through COVID-19, many people are still looking for ways to get items they need without physical contact with another person.

Vending machines serve that purpose — and make money for the machine’s owner.

Owning and operating vending machines is big business, providing passive income without any specialized skills. It’s also called automatic merchandising.

Basically, all you need to get started is some startup money to buy a machine, a good location and the right products.

The Vending Machine Business During COVID-19

Revenue for the vending machine industry was $24.2 billion in 2019, up 3% from the year before.

That data came from the Automatic Merchandiser’s Annual State of the Industry Survey — before the full impact of COVID-19 hit.

There were 2,175,756 vending machines in service in 2019 in a variety of locations including:

  • Manufacturing areas
  • Offices
  • Retail spaces
  • Hotels/motels
  • Schools
  • Hospitals and nursing homes
  • Universities/colleges
  • Correctional facilities
  • Military bases
  • Restaurants, bars and clubs

Cold beverages were the top-selling product category. A majority of vending machines involve food and beverage products including sodas, coffee, snacks and candy.

There are also machines for bulk vending like gumballs, stickers, toys, novelties and more. During COVID-19, machines popped up selling masks and hand sanitizer.

At places like airports, vending machines often sell tech accessories and travel essentials like neck pillows, blankets and eye masks. Laundry rooms in residential buildings often have machines with detergent and fabric softener.

With many offices, businesses and other public spaces closed or restricted due to the coronavirus pandemic, the vending industry is certainly taking a hit.

“We’re in a tough, tough industry right now with COVID-19. A lot of stores don’t want the machines there, they don’t want the kids congregating, they don’t want people touching them,” said Scott Ausmus, director of manufacturing for National Entertainment Network, Inc. and president of the National Bulk Vendors Association.

He grew up in the vending business. The machines he sells and operates are the novelty kind, offering things like stuffed animals, toys and gumballs. Many are in restaurants and entertainment venues like bowling centers.

Many factors make owning a vending machine an attractive business venture.

The startup costs are relatively low, sometimes around $2,000. The work is flexible and often doesn’t require much day-to-day involvement. The risk is comparatively low and there is growth potential.

“There’s a higher profit in the gumball then there is anything else,” Ausmus said. “The cost of goods is low on the gumballs and everybody likes gum, so everybody still purchases a gumball and so that is a winner for a lot of people.”

Starting a Vending Machine Business

While the startup costs are low and the income is often passive, owning vending machines is not without risk. You must be able to understand your own financial situation and how much you can afford to invest.

There is the cost of the machine, the cost of inventory, personnel to keep it stocked, maintenance and more.

The more perishable the product and the busier the area, the more of your time the machine will take.

“If (your machine location has) a big break room and a lot of employees, you would have to be there once a day to fill your machines up because that’s how busy they are,” Ausmus said. Other machines like toys and candy don’t require as much restocking.

One of the first steps in starting a vending machine business is finding your niche and deciding what to sell. That takes a bit of research and knowing who your customer is.

“You gotta buy the right product. If you buy the wrong product, it won’t move and you won’t make any money and you certainly don’t want to throw [product] away,” Ausmus said. “You’ve got to have the variety for people and find out which ones they want and that’s what you restock with, what sells.”

Vending machine businesses are scalable, meaning it’s possible to start small and expand. You don’t have to wait for payments because customers pay when they purchase an item.

Location, Location, Location

To put yourself in the best position to be profitable means finding the right location.

Places with lots of foot traffic are good. Before COVID-19, that meant schools and universities, malls, office parks, etc.

Think about where people need to wait. While waiting, they may get hungry or thirsty. Ausmus’ novelty machines need kids around.

“One of the hardest things to do is to locate a location,” he said.

Location can be about trial and error.

“It’s really not a bad risk to put it in a location and find out that it’s not making enough money. … You can remove it and move it to the next one until you find that right location,” Ausmus said.

When looking for locations, be prepared to approach the owner or landlord with a business plan for the machine.

Also be prepared to:

  • Pay a percentage of sales or other fee for having your machine in their location.
  • Pay for the electricity the machine uses.
  • Ensure the security of the machine. There is money inside a machine as well as inventory. Theft and vandalism are always possible.
  • Research state and local laws and regulations.
  • Pay sales tax on the revenue the machine generates.

Key Purchase: Your Vending Machine

Then you will need an actual vending machine. There are several types, and prices vary depending on what is in the machine, whether it needs refrigeration or heating, and the interactivity.

Buying directly from a manufacturer or supplier is one option, as is purchasing on a secondary market. Some companies also rent machines. Ausmus cautioned to make sure there are spare parts and support available for what you buy.

Machines range from about $1,500 for a used or refurbished machine to several thousands for a new, high-end machine with many technical features.

Some machines have:

  • Remote monitoring software: This helps keep track of how the machine is working and notifies the operator if something is wrong.
  • Low stock alerts: Notify the operator when items needs replacing.
  • Vending management systems (VMS): Tracks sales and other data to help owners make better business decisions.
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Running a Vending Machine Business

While owning vending machines does not require any special skills, it is a business.

You will need inventory and someone to keep the machine stocked and maintained. This may require a van or truck.

Perishables need to be stocked more often than other items. Learning some basic maintenance skills could keep you from having to hire someone if there is a problem with the machine.

Different types of machines have different capabilities. Some take only cash while others will process credit or debit cards. Some models have touch screens or voice capabilities.

“Make sure that you have your phone number on the machine, and that the store location knows your phone number,” said Ausmus. “If somebody didn’t get what they wanted, make sure the store can give them a refund and you pay the refund back to that store. Then get out there as soon as you can to fix the machine so that you can continue to make money.”

Automatic merchandising isn’t for everyone, but owning and operating a vending machine can be a good business. Being able to retrieve the money you make and restock your machines easily is the key.

“Then you only work probably three days a month, basically on the whole gig,” said Ausmus. “Three four days a month can make somebody a good little extra income.”

Tiffani Sherman is a Florida-based freelance reporter with more than 25 years of experience writing about finance, health, travel and other topics.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Source: thepennyhoarder.com

COVID-19 Scams

A man and woman chat in an office

As if fearing the health-related consequences of the COVID-19 coronavirus wasn’t enough, there’s also a fair amount of financial uncertainty related to recession and an unstable economy. People all across the United States are wondering how they’ll pay their bills and make ends meet as they file for unemployment and wait for a one-time stimulus check that may not cover the bills.

Go to Guide

Privacy Policy

It’s unfortunate, but some bad actors will always take advantage of situations like coronavirus. In addition to everything else, individuals also need to be on the lookout for COVID-19 scams that are cropping up. In fact, there are so many coronavirus scams out there right now that the FTC created an FTC Scam Bingo game to try and spread the word.

Read up on what COVID-19 scams to look out for and how you can protect yourself and your finances.

COVID-19 Stimulus Check Scams

Some scammers are tricking people into thinking they need to provide personal information to obtain their government relief check. Consumers do not need to sign up for the federal stimulus checks. The government plans to distribute them based on consumers’ 2018 or 2019 federal tax returns starting April 2020. Keep in mind that the IRS does not initiate contact by email, text, or social media.

How to Protect Yourself

Do not respond to any correspondence claiming to be the IRS or other branch of the government requesting personal information in exchange for access to your stimulus check. For accurate information about the federal relief checks and when you can expect yours, visit the IRS’s coronavirus resource.

Student Loan Scams

Americans owe over $1.64 trillion in student loan debt, so it’s no wonder that scammers are preying on this financially vulnerable population. Watch out for offers to forgive your student loan debt in its entirety or change your repayment plan for a fee, or requests for other personal information in order to suspend your payments in response to coronavirus. There is no such thing as instant student loan relief, and you should not need to pay a fee for help from your loan servicer. All federally backed loans have automatically suspended payments and set interest to 0%.

How to Protect Yourself

Do not accept unsolicited offers to help you with your
student loan payments and never give out your personal information. If you are
having trouble making payments because you’ve lost your job, reach out to your
loan servicer for options.

Social Security Scams

Social Security scams are common, but coronavirus has put a new twist on the scam. Now, in addition to watching out for scammers claiming that your Social Security number is about to be suspended, you also need to watch out for calls or letters claiming that your benefits will be canceled due to coronavirus-related office closures. Social Security offices are closed, but officers are still working, and your benefits will not be suspended. And your Social Security number will never be suspended.

How to Protect Yourself

If you are unsure if a call or email is from the Social Security Administration, reach out to them yourself for confirmation before sharing any personal information. If you have already given you Social Security number to a scammer, visit IdentityTheft.gov/SSA for steps on how to protect your credit and identity.

Medicare Scams

Because older individuals are particularly susceptible to COVID-19, scammers have been targeting them with Medicare scams. Be on the lookout for fraudulent Medicare representatives asking you to verify personal information, like your bank account, Social Security, or Medicare numbers. Medicare representatives will never call you to verify your account number, offer you free equipment or services, or try to sell you anything.

How to Protect Yourself

If you’re
not sure if a phone call is legitimate, hang up and call Medicare yourself.
That way you can confirm that you are talking to an actual Medicare
representative. To reach the Medicare office, call 1-800-633-4227.

Fraudulent Charities

Whether it’s a natural disaster or worldwide pandemic
like the coronavirus, legitimate charities work hard to aid people in need.
This can include providing food, funds, housing or other forms of assistance. Unfortunately,
fake charities can crop up too. They might use names that sound similar to real
charities and may even have emails, websites and phone numbers that seem
legitimate but aren’t.

How to Protect Yourself

Donate to charities that you are already familiar with. If you’re questioning the legitimacy of a charity, you can use third-party websites to check credentials. Options include Charity Navigator and Give.org, which is maintained by the Better Business Bureau.

Protect Yourself from COVID-19 Scams

As you continue to navigate the uncharted waters of a
worldwide pandemic, be on the lookout for COVID-19 scams. If you’re ever unsure
about something, you can consult trustworthy government resources or well-known
news outlets to verify information. Share this information about scams with
others so they know what to be on the lookout for as well.

More resources on scams:

  • Senior’s Guide to Avoiding Scams
  • Tax Season Scams
  • Student Loan Scams
  • Common Scams

The post COVID-19 Scams appeared first on Credit.com.

Source: credit.com

Why Refinance Rates Are Higher Than Purchase Loan Rates

Mortgage interest rates dropped dramatically over the summer, to the point where home loans have never been cheaper in most of our adult lifetimes. With rates at historic lows, you might’ve considered taking advantage of them, either by purchasing a new home or refinancing your current mortgage.

Recent figures from Freddie Mac show that mortgage refinances surged in the first quarter of 2020, with nearly $400 billion first home loans refinanced. However, as it turns out, refinancing your mortgage might actually be more expensive than purchasing a new home. 

This surprised us, too — why would there be a difference at all? 

We investigated how refinancing rates and new purchase home loan rates are set, and found several reasons for this rate disparity. On top of the rate difference, mortgage refinancing is even more difficult to qualify for, given the current economy.

Before rushing to refinance your home, read on to gather the information you need to make the right financial decision for your situation.

Pandemic Effects on Home Lending

Just as mortgage rates have stumbled, banks and lenders have tightened the screws on borrowers due to COVID-19, requiring higher credit scores and down payment amounts. Chase, for example, raised its minimum FICO score requirements for home purchases and refinances to 700 with a down payment requirement of at least 20%. 

Low rates have also driven a massive move to mortgage refinances. According to the same Freddie Mac report, 42% of homeowners who refinanced did so at a higher loan amount so they could “cash out.”

Unfortunately, homeowners who want to refinance might face the same stringent loan requirements as those who are taking out a purchase loan. Mortgage refinance rates are also generally higher than home purchase rates for a handful of reasons, all of which can make refinancing considerably less appealing. 

How Refinance Rates Are Priced

Although some lenders might not make it obvious that their refinance rates are higher, others make the higher prices for a home refinance clear. When you head to the mortgage section on the Wells Fargo website, for example, it lists rates for home purchases and refinances separately, with a .625 difference in rates for a thirty-year home loan. 

There are a few reasons why big banks might charge higher rates to refinance, including:

Added Refinance Fees

In August of 2020, Fannie Mae and Freddie Mac announced it was tacking on a .5% fee on refinance mortgages starting on September 1. This fee will be assessed on cash-out refinances and no cash-out refinances. According to Freddie Mac, the new fee was introduced “as a result of risk management and loss forecasting precipitated by COVID-19 related economic and market uncertainty.”

By making refinancing more costly, lenders can taper the number of refinance loans they have to process, giving them more time to focus on purchase loans and other business.

Lenders Restraining New Application Volume

Demand for mortgage refinancing has been so high that some lenders are unable to handle all requests. Reluctant to add more employees to handle a surge that won’t last forever, many lenders are simply limiting the number of refinance applications they process, or setting additional terms that limit the number of loans that might qualify.

Also note that some lenders are prioritizing new purchase loans over mortgage refinance applications since new home buyers have deadlines to meet. With the housing market also on an upswing in many parts of the country, many major banks and lenders simply can’t keep up.

Rate Locks Cost Money

Generally speaking, it costs lenders more to lock the rate for refinance loans when compared to purchase loans. This is leaving lenders disinterested in allocating resources on the recent surge in mortgage refinance applications.

This is especially true since many refinancers might lock in a rate with one provider but switch lenders and lock in a rate again if interest rates go down. Lenders exist to turn a profit, after all, and it makes sense they would spend their time on loans that provide the greatest return.

Tighter Requirements Due to COVID-19

According to the Brookings Institute, Fannie Mae and Freddie Mac have been asking lenders to make sure any disruption to a borrower’s employment or income due to COVID-19 won’t impact their ability to repay their loan. 

Many lenders are also increasing the minimum credit score borrowers must have while making other requirements harder to meet. As an example, U.S. Bank increased its minimum credit score requirement to 680 for mortgage customers, and it also implemented a maximum debt-to-income ratio of 50 percent.

This combination of factors can make it difficult to save as much money with a refinance, or to even find a lender that’s willing to process your application. With this in mind, run the math and to see if refinancing is right for your situation before contacting a mortgage lender.

How Mortgage Purchase Rates Are Priced

Mortgage purchase rates are priced using a similar method as refinance rates. When you apply for a home mortgage, the lender looks at factors like your credit score, your income, your down payment and your other debt to determine your eligibility.

The overall economy also plays a giant role in mortgage rates for home loans, including purchase loans and refinance loans. Mortgage rates tend to go up during periods of speedy economic growth, and they tend to drop during periods of slower economic growth. Meanwhile, inflation can also play a role. Low levels of inflation contribute to lower interest rates on mortgage loans and other financial products.

Mortgage lenders can also price their loans based on the amount of business they have coming in, and whether they have the capacity to process more loans. They might lower rates to drum up business or raise rates when they’re at or nearing capacity. This is part of the reason rates can vary among lenders, and why it always makes sense to shop around for a home loan.

Many people believe that the Federal Reserve sets mortgage rates, but this is not exactly true. The Federal Reserve sets the federal funds rate, which lenders use to ensure they meet mandated cash reserve requirements. When the Fed raises this rate, banks have to pay more to borrow from one another, and these costs are often passed on to consumers. Likewise, costs can go down when the Fed lowers the federal funds rate, which can mean lower costs and interest rates for borrowers.

The Bottom Line

Refinancing your existing mortgage can absolutely make sense in terms of interest savings, but don’t rule out buying a new home instead. Buying a new home could help you save money on interest and get the space and the features you really want. 

Remember, there are steps you can take to become a more attractive borrower whether you choose to refinance or invest in a new place. You can’t control the economy or the Federal Reserve, but you have control over your personal finances.

Improving your credit score right away, and paying down debt to lower your debt-to-income ratio are just a couple of strategies to start. And if you’re planning on buying a new home, make sure you save a hefty down payment amount. These steps help you improve your chances at getting the best rates and terms whether you choose to move or stick with the home you have. 

The post Why Refinance Rates Are Higher Than Purchase Loan Rates appeared first on Good Financial Cents®.

Source: goodfinancialcents.com

Women’s Finances Are Taking a Hit. Here’s How to Combat It.

The pressure of the pandemic both in and out of the workforce is having a significant impact on women and their financial futures. According to a recent UBS Global Wealth Management survey, 61% of women feel that Covid-19 has hurt their careers.  Key findings: 40% of women have reduced hours at work to help care […]

The post Women’s Finances Are Taking a Hit. Here’s How to Combat It. appeared first on The Simple Dollar.

Source: thesimpledollar.com

Should You Refinance Your Student Loans?

Due to financial consequences of COVID-19 — and the broader impact on our economy — now is an excellent time to consider refinancing most loans you have. This can include mortgage debt you have that may be converted to a new loan with a lower interest rate, as well as auto loans, personal loans, and more.

Refinancing student loans can also make sense if you’re willing to transition student loans you currently have into a new loan with a private lender. Make sure to take time to compare rates to see how you could save money on interest, potentially pay down student loans faster, or even both if you took the steps to refinance.

Get Started and Compare Rates Now

Still, it’s important to keep a close eye on policies and changes from the federal government that have already taken place, as well as changes that might come to fruition in the next weeks or months. Currently, all federal student loans are locked in at a 0% APR and payments are suspended during that time. This change started on March 13, 2020 and lasts for 60 days, so borrowers with federal loans can skip payments and avoid interest charges until the middle of May 2020.

It’s hard to say what will happen after that, but it’s smart to start figuring out your next steps and determining if student loan refinancing makes sense for your situation. Note that, in addition to lower interest rates than you can get with federal student loans, many private student lenders offer signup bonuses as well. With the help of a lower rate and an initial bonus, you could end up far “ahead” by refinancing in a financial sense.

Still, there are definitely some negatives to consider when it comes to refinancing your student loans, and we’ll go over those disadvantages below.

Should You Refinance Now?

Do you have student loan debt at a higher APR than you want to pay?

  • If no: You shouldn’t refinance.
  • If yes: Go to next question.

Do you have good credit or a cosigner? 

  • If no: You shouldn’t refinance.
  • If yes:  Go to next question.

Do you have federal student loans?

  • If no: You can consider refinancing
  • If yes: Go to next question

Are you willing to give up federal protections like deferment, forbearance, and income-driven repayment plans?

  • If no: You shouldn’t refinance
  • If yes: Consider refinancing your loans.

Reasons to Refinance

There are many reasons student borrowers ultimately refinance their student loans, although they can vary from person to person. Here are the main situations where it can make sense to refinance along with the benefits you can expect to receive:

  • Secure a lower monthly payment on your student loans.
    You may want to consider refinancing your student loans if your ultimate goal is reducing your monthly payment so it fits in better with your budget and your goals. A lower interest rate could help you lower your payment each month, but so could extending your repayment timeline.
  • Save money on interest over the long haul.
    If you plan to refinance your loans into a similar repayment timeline with a lower APR, you will definitely save money on interest over the life of your loan.
  • Change up your repayment timeline.
    Most private lenders let you refinance your student loans into a new loan product that lasts 5 to 20 years. If you want to expedite your loan repayment or extend your repayment timeline, private lenders offer that option.
  • Pay down debt faster.
    Also, keep in mind that reducing your interest rate or repayment timeline can help you get out of student loan debt considerably faster. If you’re someone who wants to get out of debt as soon as you can, this is one of the best reasons to refinance with a private lender.

Why You Might Not Want to Refinance Right Now

While the reasons to refinance above are good ones, there are plenty of reasons you may want to pause on your refinancing plans. Here are the most common:

  • You want to wait and see if the federal government will offer 0% APR or forbearance beyond May 2020 due to COVID-19.
    The federal government has only extended forbearance through the middle of May right now, but they might lengthen the timeline of this benefit if you wait it out. Since this perk only applies to federal student loans, you would likely want to keep those loans at 0% APR for as long as the federal government allows.
  • You may want to take advantage of income-driven repayment plans.
    Income-driven repayment plans like Pay As You Earn (PAYE) and Income-Based Repayment let you pay a percentage of your discretionary income each month then have your loans forgiven after 20 to 25 years. These plans only apply to federal student loans, so you shouldn’t refinance with a private lender if you are hoping to sign up.
  • You’re worried you won’t be able to keep up with your student loan payments due to your job or economic conditions.
    Federal student loans come with deferment and forbearance that can buy you time if you’re struggling to make the payments on your student loans. With that in mind, you may not want to give up these protections if you’re unsure about your future and how your finances might be.
  • Your credit score is low and you don’t have a cosigner.
    Finally, you should probably stick with federal student loans if your credit score is poor and you don’t have a cosigner. Federal student loans come with fairly low rates and most don’t require a credit check, so they’re a great deal if your credit is imperfect.

Important Things to Note

Before you move forward with student loan refinancing, there are some details you should know and understand. Here are our top tips and some important factors to keep in mind.

Compare Rates and Loan Terms

Because student loan refinancing is such a competitive industry, shopping around for loans based on their rates and terms can help you find out which lenders are offering the most lucrative refinancing options for someone with your credit profile and income.

We suggest using Credible to shop for student loan refinancing since this loan platform lets you compare offers from multiple lenders in one place. You can even get prequalified for student loan refinancing and “check your rate” without a hard inquiry on your credit score.

Check for Signup Bonuses

Some student loan refinancing companies let you score a bonus of $100 to $750 just for clicking through a specific link to start the process. This money is free money if you’re able to take advantage, and you can still qualify for low rates and fair loan terms that can help you get ahead.

We definitely suggest checking with lenders that offer bonuses provided you can also score the most competitive rates and terms.

Consider Your Personal Eligibility

Also keep your personal eligibility in mind, including factors beyond your credit score. Most applicants who are turned down for student loan refinancing are turned away based on their debt-to-income ratio and not their credit score. Generally speaking, this means they owe too much money on all their debts when you compare their liabilities to their income.

Credible also notes that adding a creditworthy cosigner can improve your chances of prequalifying for a loan. They also state that “many lenders offer cosigner release once borrowers have made a minimum number of on-time payments and can demonstrate they are ready to assume full responsibility for repayment of the loan on their own.”

It’s Not “All or Nothing”

Also, remember that you don’t have to refinance all of your student loans. You can just refinance the loans at the highest interest rates, or any particular loans you believe could benefit from a different repayment term.

4 Steps to Refinance Your Student Loans

Once you’re ready to pull the trigger, there are four simple steps involved in refinancing your student loans.

Step 1: Gather all your loan information.

Before you start the refinancing process, it helps to have all your loan information, including your student loan pay stubs, in one place. This can help you determine the total amount you want to refinance as well as the interest rates and payments you currently have on your loans.

Step 2: Compare lenders and the rates they offer.

From there, take the time to compare lenders in terms of the rates they can offer. You can use this tool to get the process started.

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Step 3: Choose the best loan offer you can qualify for.

Once you’ve filled out basic information, you can choose among multiple loan offers. Make sure to check for signup bonus offers as well as interest rates, loan repayment terms, and interest rates you can qualify for.

Step 4: Complete your loan application.

Once you decide on a lender that offers the best rates and terms, you can move forward with your full student loan refinancing application. Your student loan company will ask for more personal information and details on your existing student loans, which they will combine into your new loan with a new repayment term and monthly payment.

The Bottom Line

Whether it makes sense to refinance your student loans is a huge question that only you can answer after careful thought and consideration. Make sure you weigh all the pros and cons, including what you may be giving up if you’re refinancing federal loans with a private lender.

Refinancing your student loans can make sense if you have a plan to pay them off, but this strategy works best if you create a debt repayment plan you can stick with for the long-term.

The post Should You Refinance Your Student Loans? appeared first on Good Financial Cents®.

Source: goodfinancialcents.com

5 Steps to Take When Budgeting for a Career Break

Not everyone’s career path is a 40+ year marathon working full time until you can finally come up for air in your golden years.

Sometimes you need a little break along the way.

Taking time away from the workforce — whether it’s to travel, take care of loved ones, learn a new skill or whatever — can be a beneficial thing. But money — or the lack thereof — is what stops many people from even considering it.

With some significant planning and budgeting, however, it’s possible to make your career break dreams a reality. Here are five steps you should take when budgeting for a career break.

5 Steps for Career Break Budgeting

1. Think About What Your Career Break Will Look Like

People take career breaks for a number of reasons. Take some time to reflect on why you are planning time away from the workforce and what you intend to do.

When thinking about what your new day-to-day will look like, try to get as detailed as possible. Hone in on aspects that will affect you financially.

How long will your break last? When would you like it to start? Will you be staying at home or traveling the world? What adventures would you like to experience?

While it’s nice to dream about your best life ever, you’ve got to be practical too. Ranking what you want to do with your newfound free time will be helpful if you have to cut your list down to fit what you can afford.

2. Explore What Your Costs Will Be During Your Break

After you’ve fantasized what your work break will look like, it’s time to focus on the numbers. You’ve got to know what your expenses will be in order to determine whether your plans are realistic.

If you don’t already budget your income and track your expenses, now’s the time to start. Your budget will give you a good idea of how much you spend on essentials and where you can cut costs as you save up for leave.

Research all the additional costs you expect to incur during your break. If you’re taking extended parental leave after the birth of a child, you’ll be dealing with a ton of new baby-related expenses. If you’re taking time off to travel, you’ve got to pay for transportation and lodging.

The length of your break will also be a big factor here. Obviously, the longer you’re away from the workforce, the more money you’ll need saved up.

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3. Set Up a Sinking Fund to Cover Expenses on Your Break

If you haven’t heard the term “sinking fund,” that’s just personal-finance speak for a stash of savings that you regularly contribute to over time to break up a big expense.

Once you’ve estimated the overall expenses for your leave, divide that by how many months you have left to come up with your target monthly savings goal.

Pro Tip

Switch to a bare-bones budget or try these other ways to save money fast so you can free up cash to add to your sinking fund.

If you already have existing savings you want to use to fund your career break, that will cut down on how much you’ll need to put aside each month — just make sure you don’t touch your emergency fund!

Your emergency savings should only be used on an actual emergency — like if you get into a car accident or Fido needs to be rushed to the pet hospital. Being away from work won’t make you immune to emergencies, so do not plan to use your emergency fund to tide you through your break.

In fact, before you focus on building up your sinking fund, you ought to have adequate savings in an emergency fund first.

A woman helps her mother up from a chair outside in their garden.

4. Explore Opportunities to Make Money On Your Break

If you’re able to make money while you’re away from work, you’ll be less financially burdened. You won’t have to save up as much or worry about burning through your entire savings.

The first income stream you should explore is your current job. Taking a career break doesn’t necessarily mean calling it quits where you work now.

Depending on what type of leave you’re taking, your job may be protected and you might be able to continue collecting your salary — or a percentage of your current pay.

The Family and Medical Leave Act (FMLA) provides eligible workers with up to 12 weeks of leave after the birth or adoption of a child, to deal with a serious health condition or to care for an ill or injured family member. While this type of leave is unpaid, you’ll continue to be covered under their workplace health insurance plan and there may be the possibility of coupling this leave with short-term disability pay.

Pro Tip

President Joe Biden’s proposed coronavirus stimulus package includes extending the expired paid time off policies for sick workers and those needing to care for family members due to COVID-19.

Find out if your employer offers any other paid leave programs — whether that’s parental leave, unlimited PTO or sabbaticals. According to the Society for Human Resource Management’s 2019 Employee Benefits Survey, 27% of employers offered paid parental leave, 6% offered unlimited paid leave and 5% offered a paid sabbatical program.

Another 11% of employers surveyed offered an unpaid sabbatical program. While unpaid leave isn’t as ideal as paid leave, it gives you peace of mind that you’ll have a job to come back to after your break.

Other options to make money during your leave include picking up a side gig, bringing in passive income, renting out rooms (or your entire place) on Airbnb or selling your belongings.

If you need to pick up a little work while you’re on a career break, just make sure it doesn’t conflict with the reason you needed to take leave in the first place.

5. Develop a Re-Entry Plan

You need to plan for all aspects of your career break — including your transition back to the workforce.

Your budget needs to not only cover your expenses while you’re backpacking through Europe or nursing your elderly mother back to health. You’ve got to add a cushion for that period at the end where you’re actively seeking your next gig.

While data from the U.S. Bureau of Labor Statistics shows the average length of unemployment is about 23 weeks, how long it’ll take you to find new work will vary depending on your industry and the position you’re seeking.

Plan to keep up with contacts in your field and engage in relevant volunteer work or continued education while you’re away to improve your chances of quickly finding a new job.

If your savings run low toward the end of your leave, don’t brush off finding a bridge job — a temporary role to help you pay the bills while you search for better opportunities.

Pro Tip

A resume gap isn’t the kiss of death it used to be. You can even craft a way to include side gigs on your resume.

A career break should provide you with freedom to pursue something outside of your typical work life. You don’t want that freedom to drag you deeper into debt or put you in a worse financial position if you can avoid it.

Do your best to budget for more time than you’ll need so you can enjoy your career break stress free.

Nicole Dow is a senior writer at The Penny Hoarder.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Source: thepennyhoarder.com

Tips And Services To Help Your Bookkeeping Go Paperless

The COVID-19 pandemic wasn’t a catalyst to shift businesses toward digital transformation, it merely sped up the process. Businesses needed to scramble to move much of their operations online so workers could efficiently collaborate with each other and maintain business continuity during a difficult time.

Fortunately, departments not traditionally associated with the digital universe, like Bookkeeping, had an easier time adapting thanks to online services like Bookstime.com, a provider of digital bookkeeping tools with unique experience in difficult areas like sales tax automation, health benefits administration, and more.

Advantages of digital bookkeeping

Keeping track of every business transaction is among the most important and perhaps underappreciated tasks. Failure to keep track of transactions in a professional manner can result in a business owner making wrong decisions because they have inaccurate information.

Even worse, they might think they end the year with a profit but in reality, a bunch of small bookkeeping mistakes over several months means the business owner really lost money.

A shift to a digital platform eliminates these concerns. Online digital platforms make use of the most up-to-date accounting automation software that erases nearly every careless mistake. This is especially useful for a business owner who does the tedious but necessary job of bookkeeping themselves to save money. The more time a business owner spends on ancillary tasks, the less time they have to generate revenue and keep clients happy.

Some of the other advantages associated with going online include:

  • Eliminating clutter: keeping a clean home office is challenging enough but a digital platform means more space for higher priority files.
  • Save time: A digital bookkeeping platform is always available online with a few short clicks of the mouse. It can be accessed as needed and when needed in a few short seconds.
  • Environmental benefits: It isn’t unusual for a company to use at least 10,000 sheets of paper each year. Shifting resources online may seem like a small benefit but everyone has a responsibility to do a little bit more to protect our environment.

Case in point: Fill in a W-4

Every business owner is happy to hire new workers because it means they are expected to provide value to the company above and beyond their salary. But that doesn’t mean that the formal process is enjoyable.

One of the more undesirable parts of the hiring process is the pesky W-4 form that every employer has to ensure is properly filled in before a worker’s first day. Simply put, the W-4 form confirms how much income tax a worker wants to have withheld from their recurring paychecks. Under-withholding taxes means a worker will likely experience a shock come tax season as they owe money to the government. Over-withholding taxes means a worker is paying the government too much money and has to wait for a refund.

Digital bookkeeping can help simplify this process so you're less prone to errors. When other people’s finances are at stake, small careless mistakes could impact a worker’s desire to give the business owner 100% of their focus.

Businesses that shifted their bookkeeping process online to better navigate through the pandemic quickly realized this was a move that should have been done years ago. The advantages of having access to a clean and organized online tool far outweigh the costs.

Source: quickanddirtytips.com

2021 Mortgage and Housing Market Predictions

Welp, it’ll be nice to close out 2020 and look ahead to a brand-new year that hopefully features a lot less drama and much more good news. While the housing market actually absorbed both the COVID-19 pandemic and the presidential election surprisingly well, we can probably thank the record low mortgage rates for that. And [&hellip

The post 2021 Mortgage and Housing Market Predictions first appeared on The Truth About Mortgage.

Source: thetruthaboutmortgage.com

6 Things Your Mortgage Lender Wants You To Know About Getting a Home Loan During COVID-19

mortgage during coronavirusGetty Images

Getting a mortgage, paying your mortgage, refinancing your mortgage: These are all major undertakings, but during a pandemic, all of it becomes more complicated. Sometimes a lot more complicated.

But make no mistake, home buyers are still taking out and paying down mortgages during the current global health crisis. There have, in fact, been some silver linings amid the economic uncertainty—hello, record-low interest rates—but also plenty of changes to keep up with. Mortgage lending looks much different now than at the start of the year.

Whether you’re applying for a new mortgage, struggling to pay your current mortgage, or curious about refinancing, here’s what mortgage lenders from around the country want you to know.

1. Rates have dropped, but getting a mortgage has gotten more complicated

First, the good news about mortgage interest rates: “Rates have been very low in recent weeks, and have come back down to their absolute lowest levels in a long time,” says Yuri Umanski, senior mortgage consultant at Premia Relocation Mortgage in Troy, MI.

That means this could be a great time to take out a mortgage and lock in a low rate. But getting a mortgage is more difficult during a pandemic.

“Across the industry, underwriting a mortgage has become an even more complex process,” says Steve Kaminski, head of U.S. residential lending at TD Bank. “Many of the third-party partners that lenders rely on—county offices, appraisal firms, and title companies—have closed or taken steps to mitigate their exposure to COVID-19.”

Even if you can file your mortgage application online, Kaminski says many steps in the process traditionally happen in person, like getting notarization, conducting a home appraisal, and signing closing documents.

As social distancing makes these steps more difficult, you might have to settle for a “drive-by appraisal” instead of a thorough, more traditional appraisal inside the home.

“And curbside closings with masks and gloves started to pop up all over the country,” Umanski adds.

2. Be ready to prove (many times) that you can pay a mortgage

If you’ve lost your job or been furloughed, you might not be able to buy your dream house (or any house) right now.

“Whether you are buying a home or refinancing your current mortgage, you must be employed and on the job,” says Tim Ross, CEO of Ross Mortgage Corp. in Troy, MI. “If someone has a loan in process and becomes unemployed, their mortgage closing would have to wait until they have returned to work and received their first paycheck.”

Lenders are also taking extra steps to verify each borrower’s employment status, which means more red tape before you can get a loan.

Normally, lenders run two or three employment verifications before approving a new loan or refinancing, but “I am now seeing employment verification needed seven to 10 times—sometimes even every three days,” says Tiffany Wolf, regional director and senior loan officer at Cabrillo Mortgage in Palm Springs, CA. “Today’s borrowers need to be patient and readily available with additional documents during this difficult and uncharted time in history.”

3. Your credit score might not make the cut anymore

Economic uncertainty means lenders are just as nervous as borrowers, and some lenders are raising their requirements for borrowers’ credit scores.

“Many lenders who were previously able to approve FHA loans with credit scores as low as 580 are now requiring at least a 620 score to qualify,” says Randall Yates, founder and CEO of The Lenders Network.

Even if you aren’t in the market for a new home today, now is a good time to work on improving your credit score if you plan to buy in the future.

“These changes are temporary, but I would expect them to stay in place until the entire country is opened back up and the unemployment numbers drop considerably,” Yates says.

4. Forbearance isn’t forgiveness—you’ll eventually need to pay up

The CARES (Coronavirus Aid, Relief, and Economic Security) Act requires loan servicers to provide forbearance (aka deferment) to homeowners with federally backed mortgages. That means if you’ve lost your job and are struggling to make your mortgage payments, you could go months without owing a payment. But forbearance isn’t a given, and it isn’t always all it’s cracked up to be.

“The CARES Act is not designed to create a freedom from the obligation, and the forbearance is not forgiveness,” Ross says. “Missed payments will have to be made up.”

You’ll still be on the hook for the payments you missed after your forbearance period ends, so if you can afford to keep paying your mortgage now, you should.

To determine if you’re eligible for forbearance, call your loan servicer—don’t just stop making payments.

If your deferment period is ending and you’re still unable to make payments, you can request delaying payments for additional months, says Mark O’ Donovan, CEO of Chase Home Lending at JPMorgan Chase.

After you resume making your payments, you may be able to defer your missed payments to the end of your mortgage, O’Donovan says. Check with your loan servicer to be sure.

5. Don’t be too fast to refinance

Current homeowners might be eager to refinance and score a lower interest rate. It’s not a bad idea, but it’s not the best move for everyone.

“Homeowners should consider how long they expect to reside in their home,” Kaminski says. “They should also account for closing costs such as appraisal and title insurance policy fees, which vary by lender and market.”

If you plan to stay in your house for only the next two years, for example, refinancing might not be worth it—hefty closing costs could offset the savings you would gain from a lower interest rate.

“It’s also important to remember that refinancing is essentially underwriting a brand-new mortgage, so lenders will conduct income verification and may require the similar documentation as the first time around,” Kaminski adds.

6. Now could be a good time to take out a home equity loan

Right now, homeowners can also score low rates on a home equity line of credit, or HELOC, to finance major home improvements like a new roof or addition.

“This may be a great time to take out a home equity line to consolidate debt,” Umanski says. “This process will help reduce the total obligations on a monthly basis and allow for the balance to be refinanced into a much lower rate.”

Just be careful not to overimprove your home at a time when the economy and the housing market are both in flux.

The post 6 Things Your Mortgage Lender Wants You To Know About Getting a Home Loan During COVID-19 appeared first on Real Estate News & Insights | realtor.com®.

Source: realtor.com