If you are currently a renter but are looking to eventually buy a home, you need to save for a down payment. Depending on your cash flow, this can potentially take a long time.

But the good news is you are reading this! I’m going to walk you through seven tips for renters who are looking to save for a down payment on a house.

We’ll cover a lot of ground in these seven tips, and if you cover off on all of them you will put yourself in a great spot financially when you purchase your first home.

First I want to share a little about my own experience. Close to seven years ago my wife and I bought a fixer-upper. I learned a lot through the process (I highlight everything in this post if you want to read about it).

Some of the lessons I learned will influence the seven tips I share, but a big one was you really can’t save too much because everything is more expensive than you expect, and expensive unexpected repairs can and will happen.

Saving for a down payment is easier said than done, so I like to start at the source: cash flow.

1) Understand Your Cash Flow

 
A down payment requires socking away cash (the more the better) over a long period of time. A positive cash flow that can be diverted towards your down payment fund is essential.

There is no way of avoiding this: to understand your cash flow, you need to track your income and expenses.

I personally don’t budget and haven’t kept a budget for years. Instead I simply track my income and expenses. I’ve already created a positive cash flow, so as long as I don’t experience (too much) lifestyle inflation I will continue to be see money going into my retirement and Health Savings Account.

In a similar way, you want to be aware what your general cash flow is and how much you can realistically siphon off into a down payment fund each month. Is it $100? $500? $1,000? This will have a big impact on how long it takes you to build up a big enough down payment to purchase a house.

First things first: track your income and expenses. You can do a backwards look on your past few months of bank and credit card transactions using an automation tool like Tiller, which is the service I use.

2) Look for Ways to Increase Your Cash Flow

 
The more money you can put in your down payment fund each month the faster you can purchase a home. When you run the numbers of how much you can set aside each month and convert that to how much you can save in a year, you may be motivated to increase your cash flow (I was).

There’s two ways to increase your cash flow: make more money or cut expenses.

My wife and I are both in our thirties now, but we got married in our early twenties. We’ve tried a wide variety of things to increase our income and to cut expenses.

We’ll start with making more money. You can either do this by maximizing your 9-5 income or starting a side hustle.

At the time of this writing labor market is tight, so it makes sense to evaluate your current position and see if a raise makes sense. Alternatively, most people get a nice pay bump when they leave their current employer for an external opportunity.

But let’s assume you are maxed out at your job from an income perspective or that you are content with where you are at. You can always make money through side hustles. I have 50+ online and at-home side hustles listed here that can help you start brainstorming the right side hustle for you.

Cutting expenses can only go so far, but its an important thing to take a look at. There’s a reason why companies and businesses spend so much time and energy looking at their costs – there’s always more that can be cut. My suggestion here is to focus on your priorities. If you care about renting a nice apartment that you can come home to, then cut expenses elsewhere. If you love travelling and refuse to cut spending there, perhaps you should live in an apartment that’s a bit older but cheaper.

As far as ideas to cut expenses, go to this post and scroll down to the save money section (it starts at #23) to help you brainstorm ideas.

3) Get Rid of Credit Card Debt

 
Sometimes saving for a down payment for a house has to come secondary to other financial goals. Getting rid of credit card debt is one of those goals.

Credit card debt is at a high interest, and that interest is eating into your cash flow. You need that cash flow to save for your down payment, not to mention other goals like investing and building a retirement account.

It can be a bit depressing to realize you need to first tackle a beast like credit card debt before taking on another difficult goal, namely saving for a down payment. The general concept is the same, though: increase cash flow as much as you can, and divert that cash flow towards your credit card debt. Rinse and repeat.

If you feel in over your head with credit card debt, please reach out to a member agency of the National Foundation for Credit Counseling, or my friend Leslie Tayne, who is a debt lawyer who meets 1:1 with each individual who is seeking help and/or more information on their options.

4) Save, Save, Save

 
This is kind of a “duh” tip, but saving is clearly at the core of being able to afford to buy a house.

There are many examples where renters are paying more on rent than they would be on a mortgage, or a mortgage would be comparable to their rent. The biggest thing holding most people back is that big down payment they have to save for.

This is exactly why I started the post by talking about some of the proactive things you can do to get a good understanding of your cash flow. Once you’ve eliminated high interest credit card and other debt and start diverting positive cash flow towards a down payment fund, it’s just a matter of time before you have a down payment for your house.

As I discuss in my post 10+ things I learned from purchasing a fixer-upper, the more cash you have the better. Our basement flooded the first summer and our sewer drain-out collapsed the second Winter (why us?). Stuff breaks and emergencies happen where you need to make repairs. Not only do you need a down payment to purchase a home, I do think a healthy emergency fund (at least three months of expenses to start) is necessary as well. Once you have a home you are opened up to more risk and potential demands on your wallet. Having that money set aside will make those situations a lot less stressful.

With that I’ll get off my soap box and talk about a related topic: where to park all that cash.

In theory you could put some of your down payment funds in the stock market. After all, if you have an emergency fund plus down payment fund, you realistically could end up with tens of thousands in cash sitting in accounts that could be exposed to the stock market. The problem with putting it in the stock market, though, is that the market could have a downswing and we have no idea how long that will last. The choice is up to you, of course, and you’ll have to weigh your risk tolerance.

Within the past year I ditched my bank’s savings account (which was paying me something like 0.01%) and parked our emergency fund in CIT Bank’s High-Yield Savings Account. This account gives you 2.30% APY, which is one of the highest in the industry. You can read my review here or check out the details on CIT Bank’s website. Like I said, I’ve personally switched to CIT Bank and get $500+ more a year in interest than I was getting at my home bank.

5) Improve Your Credit Score

 
While the interest rate that the Federal Reserve sets will play a big role in what interest rate you get on your mortgage (baby boomers love to talk about their 10%+ mortgages and how it was standard “back in the day”), your credit score will also play a role. If you have excellent credit you will be able to get the lowest rates possible. If you have average credit you will get worse rates.

Unless you refinance, which can be a hassle and costs money, the interest rate you get on your mortgage will stay with you for years. With that in mind, it makes sense to improve your credit score as much as possible.

Here are the five areas that impact your credit score:

• 35% Payment History

• 30% Amount Owed

• 15% Length of Credit History

• 10% New Credit Applications

• 10% Types of Credit

On-time payments are very important when it comes to credit scores. Lenders do not want to see missed payments. As I explained earlier, before savings for a down payment your first goal should be to knock out credit card debt. Whether you accomplish this by cutting expenses, increasing income, or just leveraging your current cash flow, you’ll want to get this debt off your books as soon as possible.

Once you are out of credit card debt, or if you never had credit card debt, you should be paying off the account in full every month. I also generally don’t recommend closing credit cards (unless you have a bunch with annual fees), because once you close a card you won’t have that credit history or access to credit to help give your score a boost.

Finally, amount owed is another big factor. Said differently, that means your credit utilization. If you charge $1,000 to a credit card but have access to $100,000 of credit across all your credit cards, your credit utilization is a rock-bottom 1%. Even if your credit limit is low (sometimes you have to start with a limit as low as $500), keep your utilization below 30% at all times.

Don’t have a credit card or haven’t opened one in a long time? Unless you had issues with credit card debt in the past, it can really help build your credit. Here’s some cash back cards I recommend, which are great for everyday purchases.

Bottom line: focus on improving your credit score if you ever plan on taking out a mortgage.

6) Use Your Future Home as Motivation

 
We’ve gone over a lot already, and it can all be overwhelming. Which brings me to this tip: use your future home as motivation.

A more negative take on this would be: use your disdain for renting as motivation.

Like any huge personal finance goal that will take time, saving for a down payment on a house can be a slog. Remind yourself often about the reward for all your hard work: your own home!

I could go on for days about renting vs. buying, but the fact you are reading this means you are at minimum a little interested in potentially saving for a down payment on a home. Funnel that motivation into taking the actions you need to make it a reality, starting with understanding your cash flow by analyzing your income and expenses.

You can do this!

7) Think NOW About Potential Future Scenarios

 
I may not have worded that the best, but my point here is to try as much as you can to think a few years down the road BEFORE you buy a home.

I freely admit my wife and I jumped into home ownership quickly. In reality, it would have benefited us to save more money and have a bigger cash reserve, especially considering the fact we were buying a fixer-upper. I’m not sure we would have had the cash necessary to get our home into “rental shape” if we had to move for a job or grad school, which was always our fallback option if life presented opportunities out of state. We could have sold if we needed to, but given the short time between buying and selling we probably wouldn’t have recouped all the costs that went into the process.

Also think about your lifestyle. I ended up writing my first book while working full-time…and while building a 40-foot retaining wall in my backyard. Because my side hustles became more time-consuming, it has been more difficult to work on our fixer-upper than I anticipated. But looking back, it was a definite possibility that opportunities could come up, and I had no plans of leaving my 9-5.

Focus on the first 3-5 years that you will be in your home. What sort of time can you put towards home maintenance, renovations, and upkeep? If you had to move on a dime to take advantage of an opportunity, would the house be in shape for rental (if this is a desired path for you) or would you be forced to sell because you are short on cash?

______________________________________________________________-

That was a LOT to think about, but I hope these tips were useful for you as you look to eventually move on from renting.

My last request? Keep me in mind when you are inviting people to your housewarming party! :D

Whether you’re looking to pay off debt, save for retirement, or simply more wiggle room in paying the bills, most of us could certainly use an extra five to ten percent of our take-home pay back in our budget. You can do so by lowering your cost of living. Here are four easy ways to make your living situation more affordable.

1) Consider Where you Work

 
Should you live close to where you work, even if it’s more expensive? Well, it really depends.

Take where I live for an example – Seattle. It can cost hundreds, if not a thousand dollars more per month to live downtown near the city center. In comparison, places outside the city can be bigger and more affordable, while still having plenty of conveniences. In this case, living further away may result in additional time and money spent commuting, it may still be cheaper in the long run.

While that’s an extreme example, you can likely see similarities to where you live. It’s almost always more expensive to live downtown or in a popular business area because everyone wants to live there.

However, many of my friends in Seattle work and live downtown. They pay higher rents, but they forgo cars in favor of walking everywhere, live in simple apartments, or live with roommates. I know plenty of people who save a lot of money by living close to where they work.

So, it’s up to you to do the math to figure out if it makes more sense to live near work, or further away. Either way, you’ll likely have to make some compromises to find a place suitable (and affordable) for you.

2) Downgrade Your Space

 
When my husband and I moved from a small southern city to Seattle, we knew we had to lower our living expectations. Previously, we had been living in a spacious and modern two bedroom apartment close to work. We knew with Seattle prices, we would have to pay an astronomical amount for a similar apartment in Seattle. Since it was out of our control, we chose to lower our expectations.

We decided to prioritize a few features that were important to us, such as being within walking distance to stores and restaurants, and having an in-unit washer and dryer. While we liked having more space in our previous apartment, we decided to sacrifice that in order to find something that met our expectations.

With housing, you pay for all the features you get. If you want the perfect house or apartment, it will prove to be fairly costly. But if you can pick a couple of features that are must-haves and compromise on the rest, you’ll find many more options available to you within your price range.

3) Get a Roommate

 
I know not everyone is keen on sharing their space, but before you skip to the next section, hear me out. Getting a roommate is hands down the fastest way to lower your living expenses.

When I first graduated college a number of years ago, I had rented out my own apartment. My income was small, but I convinced myself I deserved to have my own place. Even though I could “technically” afford it, I found that I wasn’t able to make much financial progress anywhere else. So after my lease was up, I decided to move back in with roommates, and it was the best decision I could have made.

With that one small decision, I ended up saving over $500 a month in living expenses (plus, with roommates, I could afford a much nicer apartment). Not only did my rent lessen, but we split the water, electricity, trash, and internet bills, which saved me a lot of money as well.

Finding a roommate may not be the most popular answer, but it is one of the simplest ways to lower your living expenses. Just be sure to fully vet anyone before you move in with them to ensure you will get along.

4) Move to a Less Expensive City

 
Finally, if you’ve tried everything and are still struggling to make ends meet, then it may be time to consider more drastic options.

It can be incredibly challenging to come to terms with, but sometimes, it may just not be worth it to live in an expensive city.

When we moved to Seattle, I was absolutely shocked at the price of rent and homes. Thankfully, we moved to the city for work and had cost of living increases factored in, so it lessened the blow slightly. Had we not had that, I don’t know if it would have been worth it for us to move.

Don’t get me wrong – I love living in a major city and am so thankful to be able to afford the lifestyle that comes with it. But for some people, it can be tough to make ends meet with increasingly high cost of living expenses.

If you still are having a difficult time affording your living situation, you have a couple of options. One would be to move to a less expensive area. Relocation and uprooting your life isn’t an easy decision, but it could certainly ease the financial burden.

Secondly, you could work to side hustle to increase your income. This is still something I do, and the extra income helps me reach all of my financial goals significantly faster than if I just relied on my 9-5 income. If you’re committed to living where you live, then you may want to consider ways to increase your income to be able to afford it. Trust me, the burden of not having to worry about how you will pay your next bill is so worth it.

 
Related:

• House Hacks to Save Money on Heating Costs

• 5 Ways to Save For a House Down Payment

 
 
Have you ever tried one of these tips to lower your living expenses? What other creatives methods have you tried?
 
 

One option I considered doing was painting my apartment. Not every apartment allows you to paint the walls, but my first apartment did. However, this came with quite a few stipulations. Ultimately, after talking with people who have painted their apartment before, I ultimately decided against it, and I’m glad I did. Here’s why you shouldn’t paint your apartment.

You Have to Paint it Back

 
Painting your apartment isn’t a bad idea – but many people forget you typically have to paint it back to its original color.

If you’re only in an apartment for a year, this is a lot of extra work and money. Since I’ve moved around quite a bit, it wasn’t ever worth it for me to paint an apartment.

It’s Expensive

 
While you can usually purchase paint for cheap at a hardware store, you might not get so lucky when it comes to painting your apartment back to its original color. Most times, apartment complexes contract out the painting, so you may be suckered into buying paint through them at a much higher cost.

Since purchasing the original paint may be more expensive, you will probably want to take the time to prime your apartment before you paint it back. While primer will help to save you money, it adds an extra step and can take more time.

It Slows your Move-Out Process

 
Finally, one of the biggest drawbacks of painting your apartment is how it will slow down your move-in process.

Moving is incredibly stressful in itself. Whether you’re moving into another new apartment or into a house, you will have a short period of time where you are essentially paying two rents. Because having two rents is expensive, you ultimately want to have as little overlap time as possible.

So when it comes to moving out, you want to pack up and move in as soon as you can. Packing can take weeks of preparation alone. And then you have to deep clean your apartment before you move out, all while trying to get situation in your new apartment. Trying to squeeze in time to paint your old apartment would just add to that stress. Not only does it create more emotional stress for you, but it also requires money to paint your apartment. When you’re moving and paying two rents (plus the cost of moving supplies or help), painting your apartment just adds to the cost.

Alternatives to painting your apartment

• Use colorful curtains. If you want to add a pop of color to a wall or two, hanging fabric is a great alternative to paint. Curtains are affordable, and are easy to hang. Once you move out of the apartment, you can bring them with you without having to worry about the damage left behind.

• Go for a minimalist style. Since our apartments have always been white, we decided to just go with it instead of fighting it. We opted for more modern furniture and took advantage of the clean, minimalist look.

• Hang canvas paintings. As long-term apartment dwellers, we have purchased a ton of affordable canvas paintings to put on our walls. We prefer them to picture frames because they are light enough that you can hang them with Command strips instead of having to put nails in the wall. Plus, canvases are cheap to purchase. Stores like Hobby Lobby often have them on sale, or you can check out icanvas.com for a huge selection at an affordable price.

• Use wall decals. Wall decals are a great alternative to paint. Essentially, they are just peel-and-stick designs you can put on your walls. They can be removed without causing damage to your walls. While you probably can’t put decals on every wall, they are a great way to create an accent wall.

 
Related:

• Is Renting Really Cheaper Than Buying?

• 15 Household Items You Could Sell Today for Extra Money

• House Hacks to Save Money on Heating Costs

 
 
Have you ever painted an apartment? Why or why not? What tips do you have to decorating a home or an apartment on a budget?
 
 

Millions of millennials are spending more than the recommended amount of a budget on their rent, as rent prices remain high and are climbing even higher. For instance, according to Rent Jungle, the average one bedroom apartment in San Francisco costs $3,754. And in New York City? For the same one bedroom, the cost is $3,624, according to the same source.

I know when I moved to the Seattle area recently, rent was $800 to $1,500 more a month than my previous city. And that’s for a one-bedroom loft instead of the two bedroom apartment we used to have.

Regardless, my husband and I researched apartments extensively when planning our move in order to find the best deal without sacrificing many of our priorities. Here are 6 tips we learned when trying to find an affordable apartment.

1) Know your top priorities

 
First, make a list of everything you know you need in an apartment. These are the non-negotiables and things you cannot live without.

When I was looking for an apartment in Seattle, I was fairly open, but knew my basic requirements. I new I wanted to live in a safe and central neighborhood, within walking distance to everything I needed. I also knew I didn’t want a ground-level apartment and my biggest deal-breaker was an apartment without an in-unit washer and dryer, which was one of my requirements.

By knowing your most basic requirements, you can easily sift through apartments that just won’t cut it for what you need.

2) Downsize if possible

 
Now that you are just searching for apartments that meet your qualifications, are you having a hard time finding anything decent?

If you are, then it may be time to consider your options. Square footage is a huge determinant of the total cost of an apartment. In fact, while a one bedroom apartment in San Francisco is $3,754, a two bedroom is significantly more expensive, costing $4,567.

The difference in rent may be worth it if you’re searching for a roommate, but for individuals or couples, the extra room may not be worth the cost.

When my husband and I moved to Seattle, we decided to downsize significantly. Our top priority was to live in a central area with a washer and dryer in the unit (a rarity for a large city). To find what we were looking for in our budget, we had to sacrifice the extra room. Overall, we are both just as happy with less space – we just have to be conservative with what we can store.

3) Scour local pages

 
Don’t just stick to national websites and pages in order to find your apartment – some of the best deals are shared through local channels.

For instance, Craigslist and Facebook both often share posts of individuals looking for a last minute roommate or sublet. While these are last minute, they give you more negotiation power when it comes to signing the terms of your lease. Timing is everything, and it can save you a substantial amount of cash.

4) Consider alternative locations

 
Location, location, location. It’s the saying every single real estate agent shares. And for good reason. Depending on where you want to live, you could be saving (or spending) hundreds of dollars every single month.

If you’re really looking to save, then you may need to think of locations outside the box. Instead of living downtown, could you live in a cool, up-and-coming neighborhood for cheaper? Or, could you live in a neighborhood closer to work?

You have options, so the key is to be flexible with where you live.

5) Find a roommate

 
One of the fastest ways to decrease your rent cost is to find a roommate. For instance, let’s reconsider the cost of apartments in San Francisco. With the average two bedroom apartment which costs $4,567 and a one bedroom costs $3,754, it may be worth it to instead find a roommate and save $1,471 a month. That’s an enormous difference! While this is an extremely expensive example, it goes to show how rent can be significantly cheaper when shared.

6) Be content without perfection

 
When looking for an apartment while on a budget, know that you will have to make sacrifices somewhere. It’s nearly (if not entirely) impossible to find an apartment in your budget at the perfect time that meets every single one of your standards. Instead of looking for perfection, look for potential.

 
Related:

• 5 Ways to Save For a House Down Payment

 
 
Have you ever searched for an apartment? If so, how did you save money on your rent?
 
 

In addition, the very idea of insurance is viewed as an extra expense that doesn’t offer immediate benefits and usually gets put on the financial needs back burner.

I can certainly relate. In my 20’s, I dreaded having to pay for anything that was not viewed as absolutely necessary and most insurances were in that category.  Besides car insurance for my vehicle, what else could I possibly need until I was a lot older?

Many millennials today have a similar viewpoint regarding coverage.

Millennials vs. Insurance

 
Millennials, also known as the Young Invincibles, has largely turned away from purchasing key insurances for several major reasons: alternative viewpoint on its necessity (why purchase health insurance when you can eat a balanced diet and exercise to keep yourself healthy?), the use of corporate jargon is seen as untrustworthy and of course, cost.

The problem is many millennials do need several different types of insurance to make sure they are protected against the hiccups in life that they are not invincible against. These bumps in the road highlight the very real need of having the right insurances set up during your young adult years as your cash flow is lower and your responsibilities and liabilities continue to grow.

For many, the overwhelming part is not only the nitty-gritty details of insurance but which ones to select in the first place. To help with the decision-making process, here are 5 types of insurances you will need now to protect yourself and your financial future.

1) Life Insurance

 
As your everyday life expands, so do your concerns. From career fluctuations to a suddenly expanding family, life insurance provides the necessary supplementation of income should something unexpectedly happen to you while you have dependents.

The two most popular versions of life insurance are Term and Whole Life or Cash Value. Term insurance provides you with a specific amount of coverage for a specified amount of years (or term) i.e. $500,000 face amount (or coverage amount) for 10 years. The purpose of term insurance is to provide protection during the times you need it most: when you are young, have dependents, have debts and are building your savings. Once these responsibilities and liabilities diminish, the idea is you no longer need life insurance coverage. Term insurance is cost-effective because it is simply “pure” insurance with no bells or whistles attached and is easy to understand.

Whole life (or Cash Value) policies offer coverage for your entire life and come with a savings vehicle attached (the cash value portion). The whole life policy premium is often more expensive than term due to the cash value portion.  This type of insurance was created so coverage would never run out however it is more complex.

To begin your life insurance journey, check out Ethos which has created a “truly online” process for getting life insurance. A large majority of applicants can get approved online with no phone call or physical needed. If you’d prefer to shop around more you could check out Policygenius as well.

If you’re wondering how to determine the proper coverage amount for you, read why DC got a million dollar life insurance policy in his 20s.

2) Car Insurance

 
With a new set of wheels, all sorts of expenses are added to the list and sometimes that includes unexpected fender benders. Buying car insurance is a legal requirement if you have a vehicle, but the actual coverage you purchase can vary significantly on what it does and doesn’t cover.

In the U.S., buying car insurance can be an ordeal as there are so many options to select and know about. Ranging from liability insurance to under-insured motorist insurance to Personal Injury Protection (PIP) Medical Expenses insurance, the list is extensive and can quickly become overwhelming and expensive. Car insurance premiums can creep up on the higher side for many reasons, but the most common are driving history, age, the intended use of the car (business or pleasure), make/model, and sex.

When purchasing car insurance be sure to check out all of the options available to you. In addition, assess what your deductible (the amount you have to pay out of pocket in the event of an accident) would be.

Do you belong to a registered association or organization? Then be sure to investigate the possibility of discounts on your car insurance premiums. Also, look into insurance bundling options for discount opportunities.

3) Health Insurance

 
Your health is a top priority and when a medical concern enters the picture having the proper health insurance in place becomes a major weight off your shoulders. Also, with rising healthcare costs across the nation, health insurance is a must to have in place. Let’s not forget that in the United States it’s a legal requirement to have health insurance.

When searching for the right health insurance plan find out what the plan truly covers. Are vision and dental included? What are your deductibles? Are there are any co-payments? May you go to any doctor, clinic or pharmacy that you choose?  What are the special medical conditions covered i.e. pregnancy and physical therapy? These are all important areas to review when selecting the right health insurance plans.

Are you a full-time entrepreneur on the hunt for amazing health insurance? Read this article geared towards helping freelancers select the right health insurance.

If you have health insurance you more likely than not have a high deductible health plan (HDHP). Because deductibles are so high with these plans, it’s essential to build a “medical emergency fund” through a Health Savings Account. The good news is that a Health Savings Account offers tax benefits. See why we think an HSA is the best retirement account.

4) Renters or Homeowners Insurance

 
If you have a place to lay your head, protecting your space in case of an unforeseen occurrence is key. Flooding, robbery, and fire are common emergencies for renters and homeowners. Protecting your prized positions is very important as the cost of replacing these items can be quite high.

Renter’s (or tenant’s) insurance is a great option that is usually low in cost. When making your selection be sure to review the coverage amount limits for the major categories such as jewelry to see if it will truly be enough based on the appraisal of your items. It’s essential that you have renter’s insurance if you’re a renter because the landlord’s insurance policy will not cover any of your belongings.

Home insurance is a bit more robust as it covers the entire house, it’s contents and incidents that involve your property such as if someone slips on ice on your driveway and is injured. Your policy is assessed by many factors such as your personal credit history, the age, and construction of the house and if you have animals on the premise so be sure to keep these in mind during your search.

When on the hunt for home insurance policies, comparing online is a great way to get the best quotes side by side instantly.

5) Pet Insurance

 
Do you remember that time Bruno ate your shoe and you had to take him to the emergency veterinarian clinic and the first-ever doggie stomach pump surgery was performed? While Bruno was creating history, your once ample wallet became history too.

Being a pet owner certainly brings a lot of joy but it is coupled with major expenses and sometimes these can come about unexpectedly. The options for pet insurance has grown in popularity over the past few years as and it’s easy to see why. According to caninejournal.com, a pet owner is handed a vet bill of more than $1,000 every 6 seconds. On your search for the proper pet insurance assess if it will include prescription coverage, if routine wellness is covered and what are the waiting periods for the policy to come into effect.

Pet insurance is highly controversial as many criticize it for not actually covering most expenses and overall being unnecessary. A better option may be to build a pet emergency fund in case you experience something similar to these pet horror stories where owner’s were stuck with bills in the thousands.

____________________________________________________________

In addition to protecting yourself, learning the ins and outs of different types of insurances now will help you build a strong financial foundation that offers peace of mind. With anything, be sure to read the fine print and do your due diligence in finding the best types of these insurances for your unique needs.

Ready to build your insurance portfolio? Read the millennial’s guide to finding and purchasing insurance online.

 
 
What types of insurance do you currently own? What tips have helped you when purchasing insurance? What insurance do you see as unnecessary?
 
 

You’ve come to the right place.

I’ve asked hosts from around the U.S. to chime in with their tried-and-true tips, including what the process was like to become a host and things they wish they knew before signing up.

Learn from experienced hosts as they share their top tips with us.

Why Become an Airbnb Host

 
Putting your home, apartment or room up for rent can be a lucrative way to make extra money and utilize your empty space. It’s also an awesome way to meet new people from around the world. Just ask David Cross, author of the Best Airbnb Hosting Tips blog, who has been hosting for three years, and loves the experience.

As he explained to me, “What once started as a casual way to earn a few dollars has actually because a very significant contributor to my overall income. I’ve really enjoyed the opportunity to meet people from all over the world and from so many different backgrounds. It’s a really fun gig!”

When I asked others why they decided to become an Airbnb host, most reported the extra source of income. “The pay!” said Rachel Hill, a blogger at RachelTravels.com and avid traveler, who has been hosting for a few months. “In my first month, I made double my mortgage in less than 8 days!”

The freedom and extra income hosting provides, also allows many to travel. “Since listing my home on Airbnb, I’ve been traveling the world. Someone else is paying my mortgage, and a lot of the costs are now tax deductible, including HOA fees, upgrades, etc.” said Jenna Robbins, a freelance writer that has been an Airbnb host for over four years.

Who Should Be a Host

 
Not everyone is going to be suited for hosting, and it’s important to recognize the time commitment and emotional investment that goes into hosting. “Airbnb is a great way to earn extra money, but it comes with all the joys and pains of regular property management. You have to have the personality for that,” wrote Robbins.

The time commitment for hosting can vary, but expect at least an hour for setting up your listing, and then a few minutes a day managing bookings and responding to inquiries. Cleaning after each of your guests will be the biggest time commitment, which is why some hosts opt for a housecleaner to take care of it.

If you’re thinking about becoming an Airbnb host, understand that you’re entering into the hospitality business. To stand out from all the other listings, you’ll need to make sure you go above and beyond simply listing your space, and provide at minimum, all the creature comforts that you’d find at a mid-range hotel (toiletries, linens, towels, glasses, utensils, etc.).

Also know that it can be stressful hosting your space. If you’re not comfortable with having your style and belongings subject to other peoples’ opinions and use, then hosting may not be for you. “Unfortunately, some (not all) people do not respect your home and belongings like you would. No matter how much you try to vet people who would like to stay, people are just different,” advises Hill.

1) Get a Realistic Number for How Much You’ll Make

 
While hosting is a great way to make extra income, you need to be realistic about how much you’ll make. This can vary widely by location, so it’s best to use a handy calculator to get a good estimate. Airbnb can give you an estimate at this link of how much you could make.

It’s also really important to consider the costs of maintenance and utilities. Some guests may use more electricity than you, or crank up the thermostat. Plumbing may go awry, or an appliance may break down. Some of these things may be covered by insurance, but others may just be out of pocket. A good rule of thumb is to save at least 25% of your hosting profit for unexpected costs.

Also remember to include fees. Airbnb takes a 3% service fee from the host for each reservation to cover the cost of processing the transaction. This fee is in addition to the 6-12% paid for guest service fees.

2) Take Professional Photos

 
Depending on your market, there may be a lot of competition against other hosts. There is a way to get a leg up – with good photos. “Professional photos are especially important and can make all the difference in your listing, so it’s worth paying for those rather than just whipping out your cell phone and snapping away,” said Robbins.

To take great photos, be sure to photograph your place in the day. Try adding fresh flowers to tables and make sure all clutter is put away. Robbins suggests being specific in your captions about which rooms the viewer is looking at and from which angle.

3) Set competitive Prices

 
As mentioned above, things can get competitive, and your pricing will make a huge difference. Try being flexible, suggests Nick Brennan, CEO of My UK SIM Card, who has been hosting since February. “In the listing calendar you an set dynamic pricing, for example, in the low season reduce the nightly fee and provide discounts for weekly or monthly stays.”

For newer hosts without many profile reviews, Airbnb recommends starting below the suggested rate to begin a steady flow of bookings. Knowing how much you’ll need to cover to break even will be important in helping you set your pricing strategy.

4) Consider a Management Company

 
Long-distance property management can be stressful – especially if you’re traveling and will be out of state (or country!). For those who have the profit margin to hire a management company, it may be a valuable decision.

A management company can communicate with guests, take care of cleaning and respond to complaints, as Brennan describes, “[I selected] an Airbnb management service to look after my apartment (since I wouldn’t be able to manage it myself) — they meet the guest, check them in, communicate with them, check them out, clean the apartment and provide fresh linen. They also stock with essentials such as toiletries. They take a very reasonable % of the revenue as their management fee.”

You can find management companies through Airbnb or by doing an online search.

5) Be Transparent About Fees and Household Quirks

 
In regards to the utility bill, some hosts have learned the hard way how much they can spike. Robbins told us that one guest ran up a $300+ electrical bill in one month (her average bill is $75). Ouch. The best way to account for this is to be transparent in your listing. “I added wording to the listing stating that any utility expenses over $100/month would have to be paid by the guest,” she said.

If there are any household “special touches” be sure to write those down for the quests as well. (You know, jiggle the toilet handle, push in on the door to lock, temperamental appliances, etc.) As Robbins said, “If there are any quirks, such as an appliance not working, it’s better to be straightforward about it in the listing than to have a guest be upset upon arrival.”

6) Know Your Area and Provide an Experience

 
It’s important to understand why people choose Airbnb over hotels. It’s usually for the pricing and unique experience. If you want to stand out against your competitors, you’ll need to help guests create an unforgettable experience, including how to navigate your city and insider tips.

Cross learned this over time, “While I felt like I had a good idea of how to provide a comfortable experience, one of the biggest things I lacked when I started hosting was knowledge of local area and how to answer all the questions that visitors would ask.” Try leaving local guide books or maps out when guests arrive, or create your own “Top 10” lists of things to do in the area.

7) Lock Valuables Away

 
This is a big one that you’ll need to mentally prepare for before hosting. Your space will no longer just be yours, and that can come with some risks. “People are naturally curious and will go through your personal things if you don’t have them locked away. Also, be prepared that people make take small knick-knacks that you have available to people (ie: a deck of playing cards),” says Hill.

One way to safeguard against this is to make sure you review guests’ experience and reviews before booking. “I wish I’d known what to look for in terms of guests [before I started]. Now I won’t allow a guest to book unless they have at least two reviews, both positive. I also make sure to have a detailed inventory for my property manager to run through after each guest leaves. I’ve had guests take all my towels, pots and pans, etc. Luckily, in the worst instance, I was reimbursed quite a bit of money. But I don’t bother to submit a claim when it’s less than $100,” said Robbins.

It might sound pessimistic, but walk through your place with an eye towards what guests may take and lock up anything irreplaceable or valuable.

8) Understand the Risks and Drawbacks

 
Hosting through Airbnb is a great way to make extra money and meet interesting people, but it does have its drawbacks. “The biggest drawback for me is the potential for damages in my home. Overall, damages have been minor and rare in my experience. The other big drawback for me is with my personal schedule. As I am the sole caretaker of my home and Airbnb business, my schedule gets busy. Learning to balance life and Airbnb hosting is something each person will need to figure out for themselves,” says Cross.

Luckily, you may have some coverage for property damage or stolen items through Airbnb. Every booking on Airbnb is protected by their Host Guarantee at no additional cost to you. The Host Guarantee will reimburse eligible hosts for damages up to $1,000,000. This can help create peace of mind, but also be aware that it does not replace renters or homeowners insurance, and it doesn’t cover all things. Learn more about their guarantee at Airbnb.com.

9) Know the Laws

 
It’s important to know what the laws and regulations are in your city hosting services like Airbnb. Some cities may restrict your abilities to host guests, or you may have to register and obtain a permit first. Take time to review your local laws before listing to avoid fines and penalties.

Wondering about taxes? According to Airbnb’s website: “In some tax jurisdictions, Airbnb will take care of calculating, collecting, and remitting local occupancy tax on your behalf.” Otherwise, you may be able to add local tax to the amount your guests owe through the Special Offer feature.

10) Have Fun With It!

 
Now that we’ve done our due diligence of running through the pros and cons of hosting, it’s important to remember one last thing: have fun! From everyone I spoke with, the rewards of hosting far outweigh the risks, and they’d highly recommend it.

Don’t feel like you have to have everything perfect from the get-go. As Cross recommends, “Start with simple accommodations and add amenities as you go. Have fun with it! Guests enjoy a host who enjoys having guests. Simple as that. If you aren’t having a good time, neither will your guests!”

You can get started hosting on Airbnb at this link. Have fun!

 
Interested in other ways to make extra money? Check out these posts:

The Most Popular Side Hustles (According to Research)

 
 
Have you ever thought about hosting through Airbnb? Any tips you’d share? Be sure to leave a comment!
 
 

As I’ve learned from relocating to different places, in order for a move to go as smoothly as possible, you have to plan and budget it accordingly. While there is no need to go full type A and plan out every little detail, doing some preparation can be beneficial and save yourself from further frustration.

If just the thinking about the thought of moving gets you nervous, then it’s in your best interest to get your moving tasks in order. Your sanity, budget, and time will thank you.

Things always seem to get lost or forgotten in the process of relocating to a new place. The last few times I’ve moved, I’ve always had to spend way more than I anticipated on things like trash bins, cleaning supplies, unexpected fees, and other small things.

To make your move easier, give a few of these things a try.

1) Declutter

 
When you get settled into a place, things always seem to start to pile up. No matter how careful I’ve been, I’ve always amassed a few things in every place I have stayed in that I really didn’t care for.

It usually doesn’t make sense to bring every single thing you own with you in a move. There is bound to be a few things you can toss. While you’re in the process of packing, set stuff aside that you’re not sure about keeping. Revisit the stuff once you have packed up all your stuff.

Decide what is and isn’t worth to keep. Donate the rest. Give things to your local thrift store or Goodwill. Consider having a yard sale or selling some of the stuff on Craigslist in order to make some cash.

2) Stock up on Supplies

 
You do not have to buy moving boxes. They can an unnecessary expense for something you can otherwise get for free. Visit your local grocery store or liquor store to see if they have any boxes they can give away.

The last time I moved, I was able to get several boxes from my local grocery store, saving me money that I would have spent had I purchased boxes from a shipping supplies store. Some of the boxes I got where wine and alcohol boxes which had separators in them that were perfect for storing my fragile items.

Remember to add up the cost to purchase things like permanent markers, labels, bubble wrap, tape, and rope.

3) Decide How You Want to Move

 
Do you want to stuff everything in your car or rent a U-Haul in order to move everthing? I’ve done it both ways. Back when I was moving into my first apartment, I crammed everything I had into my little sedan. It worked out since I didn’t have much furniture to my name and gave away several things I didn’t want.

Decide if you’re going to pack everything in your vehicle, rent a U-Haul or hire professional movers. Consider the distance you’re moving, like if you’re going to be relocating to a different state or somewhere far away. While it can be cost-effective to go the do-it-yourself route, think about stuff like heavy furniture and the amount of time you have for the move.

4) Update Your Address Details

 
One of the most frustrating parts about moving is having to update your address details for everything including bills, insurance, bank, memberships, and subscriptions.

Updating your details for all of these can take time. Putting in a change of address via the post office can be easily done online in a few minutes. It’s quick, simple and ensures your mails get delivered to you.

5) Practice Good Money Management

 
Moving tends to make everything go down the drain, including your finances. Admittedly moving isn’t going to be easy on the wallet, but don’t let it make you abandon your money management during the process.

If you know well in advance that you will be moving, then start setting aside dedicated savings to help pay for moving costs. There are a lot of unexpected moving costs that can seem to come out of nowhere.

Paper towels, toilet paper, and cleaning supplies are often forgotten costs. Make sure you account for things like installation fees, utility deposits, pet fees, parking costs, and other expenses. While some of these costs are expected among frequent movers, they can sometimes be higher than anticipated.

Having dedicated savings for your move will help you. I’ve utilized financial tech resources in the past to help with my moves. Apps like Ebates and Ibotta help you earn cash back. Every little bit counts in helping to cover the cost of a move.

6) Meal Plan

 
Food spending can get out of hand when you’re moving. Packing up things like pots and pans usually means you’re left with the options of leftovers or take-out. Protect your wallet by planning out your meals and what you will eat in the days leading up to your move and for the first few days after your move.

While you don’t have to organize every last meal you will eat, it is good to at least know some simple recipes and foods you can eat. Moving is stressful, so naturally you’ll want to cave in and order take-out at some point. Allocate a set amount for food spending and try to stick to it as much as possible.

Know your weaknesses. If you have a feeling you will be ordering a lot of take-out, then budget for it so you don’t feel too bad.

7) Shop Small and Thrifty

 
You might have a tendency to buy the things when you move into a new place. Resist the urge and start small. Focus on the essentials first like a bed, table, and place to sit.

Get thrifty and browse your local thrift store or Craigslist to find things like furniture and kitchen appliances. There are some things I will always buy new like a mattress, but plenty of things can be bought secondhand. Doing so will help you save money on furnishing.

_________________________________

There are many steps to moving, so it’s alway best to take the time to get yourself organized. Review all of the steps above so you’re not running around at the last minute to do everything. A little planning can go a long way and give you peace of mind.

 
 
What steps did you take when preparing to move? What things did you do to prepare for a move?