Foundations of Finance

Learning how to manage money is very important for college students if they have not learned it previously. It can be very difficult to learn how to budget and stick to it at first, but it is definitely worth the effort that it will take.  Here are a few tips on managing money:

1. Think before you spend. Ask yourself if you really need this item-or simply want it.
2. Join a credit union. Credit unions do not charge extra fees for various things and they generally have better rates.
3. Avoid the credit cards like the plague! Credit cards will tempt you into a lot of unnecessary debt. Do not limit your freedom by gaining debt.
4. Save and then spend. Never spend money you do not have unless it is for academic purposes and can be covered by a loan.
5. Pay your bills on time. You do not want to fall behind on payments or it may be a long time before you catch up. There are also many negative consequences associated with falling behind on payments.

If you’re trying to sell your home, this is a bad time to do it. But, if you’re thinking about buying your first home, now is the time to take advantage of the low mortgage rates and pay for a home with the same amount you’re paying for rent each month. Here are a few first time home buyer tips that will help you get a home and pay as little as possible for it.

1. Know The Market

Today’s economy is not like it used to be. As little as 4 years ago, home sales were on the rise across most of the United States. General contractors were having trouble keeping up with the demand for homes, and the price of homes continued to rise. Investors were buying them two or three at a time, with the hopes that the economy would continue to thrive and they could sell their property for a lot more than they bought it for.

Then, in early 2006, with almost no warning, the housing market climaxed, leveled off, and started to drop. Housing prices slowly began to drop. . .and drop. . .and drop. Now it is 2010 and there are no signs of improvement. Since 1990, the Case-shiller index shows that the market has not declined until the market crash of 2006. That’s 16 years of steady increase. But now that’s in the past. We’re in the now. So what can we do about it?

2. Don’t buy a home for more than you can afford

Another first time home buyer tip is keeping your budget. Buying homes that are too big and too expensive is what got us into the housing market mess we’re in now. There are plenty of websites that will give you a free estimate on what you will pay monthly for your mortgage. If you are buying a home with your spouse, a good idea is to plan on spending the income of one spouse each month on the mortgage, which leaves room in case one of you loses a job or there are other unforeseen financial strains. Don’t forget about including taxes and homeowners insurance into your budget. Figure out how much you want to spend on a home, and don’t go over budget. Again, there are plenty of options in today’s market, so be patient.

3. Do Your Research

Buying a home is a major life decision, and it’s consequences will be lived with for a long time. Research the neighborhood surrounding your home. Talking to your future neighbors is a great way to find out about the neighborhood, crime rates, education, local government, etc. and most people are willing to talk. Think about how far away the mall is, if there’s a park nearby. If you see gang signs and graffiti on every corner, you may want to consider someplace else. Be patient. The right home will find you.

4. Buy A Foreclosed Home

One of the biggest causes of the housing crash was banks and financial institutions lending mortgages at 5 to 10 times the annual income of people. That means that if someone made $100,000 in a year, the bank would lend them $500,000 or even up to $1,000,000. Most people were okay with that, because if the market continued to rise, then their home would be worth a lot more than they bought it, and they would make money when they sold it. But when the crash hit, many people owed the banks a lot more than their homes were worth. People were simply walking away from their homes, and foreclosures rose rapidly.

When a home is foreclosed, it means that the owner rights are taken away from the owner and given to the lender (usually a bank), so that the lender can try and sell it and make back some of the debt that the owner has incurred. Lots of times these home go up for auction, and that is where first time home buyers can find a great home for thousands of dollars less than it is worth.

5. Don’t own the nicest house on the block

When buying a home, even in a down market, it’s important to remember that you will most likely not live in one place your entire life. Try and find a home in a nice neighborhood that is a little bit smaller or older than the majority of the houses around you. This will increase the value of the home, and give you some leeway in making improvements. Don’t get carried away, either. Keeping up with the Jones’ is not a happy way to live.

By following these first time home buyer tips, buying your first home will be a solid investment, and not a financial burden.

Have you ever wondered where the best place to live would be here in the United States? CNNMoney.com recently compiled a list of the Top 100 best U.S. cities or towns to live in. Want to know who took home the number one spot?

This year, the town of Eden Prairie, MN (population: 64,000) won out. You’re probably wondering why a small city in Minnesota would prove victorious against thousands of other towns across the country. It deserves the prize for a number of reasons.

Eden Prairie boasts only a 5.1% unemployment rates because of the big pile of jobs that have been pumped into this little town. A Fortune 500 trucking company employs many, along with the Minnesota Vikings practice facility and head office being located here.

It also has a great education system and a low crime rate. But having all these perks doesn’t make it any less fun to live here. There is plenty of things to do for families and single citizens alike.

Check out the CNNMoney.com Top 100 list to see if your city made it onto the list!