7 Tips to Avoid Overspending

Among the reasons why people run into debt problems, overspending is probably the most common. A 2012 survey showed that 52% of Americans are spending more than they earn, 21% of whom have recurring monthly expenses that exceed their income.

Now it might be easy to think that getting into debt because of overspending only applies to spending on big-ticket items, like expensive appliances and cars. But that is not the case. Many people go into debt because of small, unnecessary items that pile up and wound up on their credit card bills.

Here we give you 7 tips to avoid overspending the next time you shop.

Stick to a list

We never get tired of reiterating this in our posts. Having a list helps defend your budget from the voices in your head that are egging on you to “buy this, buy that“.  It keeps you focused on your goal: going to the shop and picking up what you intended to buy. Make sure, however, that what you are buying are more of needs than wants.

Separate wants from needs

Moderation is key to having a healthy financial life. While we recommend prioritizing needs, we don’t want you to deprive yourselves. Fulfilling our wants is also a source of joy, so we recommend separating wants from needs, and having a budget for each. Besides, when you feel deprived, you will only tend to compensate with a spending spree sooner or later.

Use cash instead of credit or debit card

Using cash makes it easy to see money leaving your wallet. That’s not the case when you use credit cards, debit cards, or some form of electronic cash. When using “intangible” cash, you do not readily feel your hard-earned money leave your bank account, so you tend to shop some more.

Beware of up-selling tactics

Salesmen are trained in up-selling tactics. Order a burger and you’ll be asked if you want to up-size your drinks. Buy a laptop and your salesman will ask if you want an extended warranty or a bigger memory instead. The key is to know what you need and stick to it come buying time.

Avoid emotional spending

Many people fall into the trap of emotional spending or “retail therapy“, i.e., spending to make themselves feel better especially when they’re unhappy. Spending when you’re unhappy may make you feel better for a moment but it doesn’t really solve the problem that’s causing you unhappiness. When the good feeling that came after retail therapy wears off, the feeling of unhappiness comes back. You haven’t solved the problem… and look you got a doodad to pay for in the next few months.

Budget (There’s an app for that!)

Bought a new high-end phone? Might as well use it to organize your finances. Nowadays, there are lots of free applications or “Apps” for budgeting. Ahorro, for example, is a beautiful, free iOS app that lets you enter your daily expenses, your budget, and your income. A summary report will let you see where you overspent, and whether you already exceeded on your allotted budget.

Got a raise? Don’t upgrade your lifestyle yet

More income means more expenses. A lot of people think that income equals wealth, so that when they get a salary raise, they feel richer than before and then upgrade their lifestyle to match their new income level. Get a 20% salary raise, then move to a bigger apartment that costs 20% more than before. That’s preposterous. Just because a roof over our head is a necessity doesn’t mean it’s okay to overspend on rent.

Aside from being a cause of bad debt, overspending can hamper your ability to save money, or set you back on your financial goals as you try to dip into your savings. When asked why you’re not getting wealthy, you should take an honest look at your spending habits, not just your income.

-- from http://financialrescuellc.com/

Looking for a new home? Contact MyHappyHomeSolutions.com

Do's and Don'ts to Improve Your Credit Score

Everyone wants to know how to improve their credit score. Here are some suggested tips to follow:

DO:

1. Pay your bills on time. Delinquent payments and collections can have a major negative impact on your score.

2. If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your score.

3. If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor. This will not improve your score immediately, but if you can begin to manage your credit and pay on time, your score will get better over time.

4. Keep balances low (1-9% utilized) on credit cards and other revolving credit. High outstanding debt can affect a score. All revolving accounts reporting a 0 balance results in a Fico score decrease.

5. Pay off debt rather than move it around.

6. Re-establish your credit history if you have had problems.

7. Opening new accounts responsibly and paying them off on time will raise your score in the long term.

8. Note that it is OK to request and check your own credit file. This will not affect your score, as long as you order your credit file directly from the credit reporting agency or through an organization authorized to provide credit files to consumers (such as myFICO).

9. Apply for and open new credit accounts only as needed.

10. Have credit cards but manage them responsibly. In general, having credit cards and installment loans (and paying timely payments) will raise your score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.

DON'T:

1. Close unused credit cards as a short-term strategy to raise your score. NEVER close an open account unless it is costing you money!

2. Open a number of new credit cards that you do not need, just to increase your available credit. This approach could backfire and actually lower your score.

3. If you have been managing credit for a short time, do not open a lot of new accounts too rapidly. New accounts will lower your average account age, which will have a larger effect on your score if you do not have a lot of other credit information. Also, rapid account build-up can look risky if you are a new credit
user. Do your rate shopping for a given loan within a focused period of time. FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.

                                                                                                       -- from http://ficoforums.myfico.com/

If you're ready to explore your options for purchasing a home -- whether you do so with conventional mortgage lending, or through seller financing, or Rent to Own -- Happy Home Solutions can help. Call or Text Adam at 630-697-4500. We always have Rent to Own homes available!

How Often Does My Credit Score Change?

How often does my score change?

Your credit file is continually updated with new information from your creditors. The FICO score is calculated based on the latest "snapshot" of information contained in your file at the time the score is requested. Therefore, your FICO score from a month ago is probably not the same score a lender would get from the credit reporting agency today. Fluctuations are quite common.

Why are my scores different?

Your scores may be different at each of the three main credit reporting agencies as the FICO score only considers the data in your credit file from that agency. If your score from the three credit reporting agencies is different, it is probably because the information those agencies have on you differs. Also keep in mind that
there is a different FICO formula for each credit reporting agency.

How can I improve my score?

It takes time and there is no quick fix. In fact, quick fix efforts can backfire. Scores reflect credit payment patterns over time with more emphasis on recent information. The best advice is to manage your credit responsibly over time. Scores automatically improve, as one's overall credit picture gets better. That means showing a historical pattern of paying your bills on time and using credit conservatively.

                                                                                                         -- from http://ficoforums.myfico.com/

If you're ready to explore your options for purchasing a home -- whether you do so with conventional mortgage lending, or through seller financing, or Rent to Own -- Happy Home Solutions can help. Call or Text Adam at 630-697-4500. We always have Rent to Own homes available!

How Is My Credit Score Calculated?

Figuring out how your credit score is calculated is tricky, but here are some general guidelines:

-35% Payment History. Meaning any lates; collections; charge offs; bankruptcies; judgments; liens or the such will hurt the score. All is time based, the older the information the less it is contributing to the scores.

-30% Utilization. It is better to have several accounts with low balances distributed then it is to have fewer accounts maxed out. To figure utilization: Balance (divided) by Credit Limit = percentage. Lower than 10% recommended per account, this is one of the fastest means for increasing the over all credit score.

-15% Established History. The longer you maintain open accounts with creditors the better. When first starting out of course this is not easy; but this is where getting added as an Authorized User to another persons established credit comes in best. Remember that the contributor must have an account that has long history; clean payment record; high credit limit; and low balance. Also need to check with the creditor to insure that they have a policy to report authorized user accounts to all three major credit reporting agencies.

Note: Authorized user accounts are the best way to go; since you are not legally responsible for the debt rather than Joint or Co-Signer accounts. Also, if this account starts to report negatively; these accounts are usually easier to remove from the credit reports by either contacting the creditor and requesting termination of the relationship; or disputing through the CRAs.

Update: In its original form, FICO 08 would not use AU accounts in scoring. It has been modified: FICO 08 now WILL continue to count legitimate AU accounts. As of the end of 2008, the EX version of FICO 08 is only being used by a few lenders.

-10% Inquiries. Don't apply for credit unless you know you can get it or that you need to get it; unnecessary credit inquiries are going to hurt the scores - especially if your over all credit file is small to begin with.

Tip: When applying for credit pull your own credit report first (this is a soft hit and won't drop your scores). With credit report in hand go visit your local banks or credit unions. Show them the reports; and don't allow them to pull a credit report of their own unless they can say for sure that you will be approved, this way you save your self unnecessary pulls on your credit report if they decline you.

If they say yes, you are approved, then they will need to pull credit report to seal the deal.

Mortgage & Auto industry has special rules for inquiries: all applications for credit resulting in pulled credit reports within a 14 day period of time will only count as one inquiry & will be suppressed from affecting credit scores for 30 days.

So if you plan to go shopping for a mortgage or a car, do your research first picking what companies you want to apply with and do this all within a 2 week period of time so that the scores are not affected too much.

-10% Mix of Credit. Use different types of credit (revolving; installment; auto; mortgage...) evenly.

Also remember the advice which a lender gives you is productive for getting a loan; but not always good for the credit scores. If they tell you to consolidate and close accounts be careful how you go about this, most people's compliance usually results in dropped credit scores. You are shrinking your overall available credit limit verses your balances... so remember you don't want to hurt the utilization by consolidating and closing accounts behind you.

What types of information are NOT used in calculating my FICO score?

1. Your race, color, religion, national origin, sex or marital status

2. Your age

3. Your salary, occupation, title, employer, date employed or employment history

4. Where you live

5. Certain types of inquiries such as promotional, account review, insurance or employment related inquiries

6. Any information not found in your credit file

7. Any information that is not proven to be a predictive of future credit performance

                                                                                                       -- from http://ficoforums.myfico.com/

If you're ready to explore your options for purchasing a home -- whether you do so with conventional mortgage lending, or through seller financing, or Rent to Own -- Happy Home Solutions can help. Call or Text Adam at 630-697-4500. We always have Rent to Own homes available!

Hardwood Floors: How to Clean and Care for Them

After purchasing a home after over a decade of living in various crappy rentals, I realized that I might be a bit in over my head.  While viewing houses on the market in anticipation of buying them, wood floors stood out as classic, beautiful, and charming.  Fastforward to a month after move-in and oh-my-goodness-I-don’t-know-what-on-earth-I’m-doing.

So research I did.

In my rentals, I had used a Roomba vacuum on both carpet and laminate, with great success. I love that it uses the little weed-eater-type-dust-flicker to really get into the corners and edges of the room, preventing me from having to use the hose-attachment to the regular vacuum and 20 minutes per room that I don’t want to spend vacuuming.  It also gets under the beds, a plus for keeping dust to a minimum.

Right before moving in, after a solid year of happiness with my Roomba, I invested in a swiffer-type robot that is designed to pick up crumbs, pet hair, and some dirt.  The Braava is a lighter duty and much quieter version of the Roomba, and it swiffers automatically, also getting under the chairs and couch with ease.  It keeps the floor barefoot-walkable without any extra work from me.

On my rental laminate floors, I had used a steam mop happily for years.  I loved the hiss of the steam coming out and assuring me that any bacteria on my floor would be quickly boiled beyond harm, that the mop easily picked up even old spills with a few quick strokes, and that the pad were washable.  To clean laminate flooring, I would go around and spray any spots with a 50/50 vinegar solution, drop a few drops of tangerine essential oil on my steam mop, and go to town, finishing the job in less than 10 minutes.

WOOD FLOOR CARE

I wasn’t sure if steam was okay to use on hardwood, though, so I checked with some experts to find out. Even though most brands of steam mops claim that they can be used on hardwood floors, it turns out that experts recommend NOT using them.  The heat used is hard on the finish, causing your floors to need to be refinished more often and wear quicker. In addition, if your floors are not completely sealed, especially in high traffic areas where the seal may have been worn off, the steam will be absorbed by the wood and will cause damage to the wood floor, and even the particle board subfloor underneath.

WITHOUT STEAM MOPPING, HOW ARE WE TO CLEAN OUR FLOORS?

If your floor is well finished with a polyeurethane sealer, you can use a water-based cleaner on it. Woodwash is recommended for this well-cared for floor. The steps for cleaning are to vacuum well, swiffer up any remaining dust or crumbs, and then spray woodwash on an area that you can reach (approx 4 ft x 2 feet) and use one rag to wash with the cleaner, another dry rag to dry immediately after.

You can also use just plain water to wash, using the same 2-rag method to clean and dry. To preserve the life of your finish, using a cleaner that is closest to a neutral phas possible is recommended. If you get either an alkaline or acidic cleaner, it will cause more wear on your floors.

If your floor has some worn spots, as I noticed mine did as I was sitting on the floor stocking the bookshelf upon movein, you can test the floor using a water test.

To test, drop a couple drops of water on the most worn part of the floor. If they stay beaded up over the next couple minutes, you can use water-based cleaners as described above. If the water soaks in, you can use odorless mineral spirits to clean until you get a chance to refinish the floor.

To clean using odorless mineral spirits: vacuum the floor well, swiffer or sweep to pick up any excess dust or crumbs. Next squirt a small amount of mineral spirits on the dirty parts of the floor, and wipe clean with multiple rags until all the mineral spirits are picked up.

DAILY MAINTENANCE

If you’re like me, there’s nothing as annoying as coming down with bare feet to get the coffee started and having crumbs, dirt, or pet hair cling to your feet. Ick.

To keep my floors barefoot friendly in less than 5 minutes a day, I follow the following routine:

1. Remove shoes at the door. I don’t ask my guests to, but most people will when they see a couple pairs of shoes lined up next to the door.
2. Vacuum under the table and/or in the kitchen daily (2 minutes)
3. Before bed, or while watching TV at night, set the Braava to run with a reusable microfiber cloth or swiffer pad.
4. Once a month, or once a week if you have pets or children in your house often, spot clean the floor, on hands and knees preferably while the sun is directly shining on your floor so you can easily see any spots.

--from singlewomanhomeowner.com/

If you're interested in finding a home with beautiful hardwood floors -- and there are plenty of them out there -- call or text Adam at 630-697-4500. Or visit our website at www.MyHappyHomeSolutions.com to see our currently available homes. 

Are You Ready to Rent to Own?

We get calls every day from people who want to Rent to Own their next home. Some are really motivated, and some are just trying to learn how Rent to Own works. We're happy to help either person understand how Rent to Own works, and to decide if they are ready to look for a Rent to Own home now, or if they need to set Rent to Own as a goal for the near future.

Why You Should Consider Rent to Own, or Owning a Home in General

Home ownership is one of the key aspects of the American Dream. The pride of ownership is a tangible feeling, a good feeling you truly do have when you own a home, instead of just renting it. It does feel good to fix up a home for your family, knowing that you own it. It does feel good to landscape a property so it has "curb appeal."

It is a pride thing. It does make you feel good. It makes you feel more accomplished, more stable, and more secure. It can even start you and your family on a path toward higher expectations for yourself, bigger achievements, loftier goals.

Home Ownership Isn't Always Easy

There's no doubt owning a home gives you stability and security that you simply do not have as a renter, but home ownership isn't always easy. But then nothing worthwhile in life is easy. Some times you have to push yourself a little harder for the good things in life.

Overspending on Doodads...

If you're regularly spending money on doodads -- you know, stuff -- you're probably never going to get out of the rental rat trap. If you really think you have to have those $100 gym shoes, or that big screen TV, or a brand new car, but you don't have any money saved up to put toward a down payment on a home, well, you're probably never going to get there. You don't need more stuff.

Putting Money Aside...

It isn't easy to accumulate the money needed for a down payment on a home. A traditional mortgage lender (ie., a bank or mortgage broker), usually looks for you to have 10 or 20 percent of the cost of the home as a down payment. Unless you're making thousands more in salary every month than your total monthly expenses -- and not very many people are -- you're looking at a long road to save up that down payment.

But if you can find a way to cut some of your expenses, and possibly improve your earning situation -- maybe by going back to school or learning a new skill -- you can start putting money aside. And once you get going toward that goal, you'll be surprised how excited you'll become as your savings grow. This by itself will give you a great feeling of accomplishment.

How You Can Rent to Own 

Rent to Own homes typically don't require as much money down as a traditional bank loan style mortgage. You won't have to save up as much, but you will need to have some money available. The typical Rent to Own home requires approximately 3 to 5 percent up front. This is called "Option Fee." It gives you the option to purchase the home in the future at a price you can lock in today.

Most of the homes we have available as Rent to Own require a minimum of $5,000 option fee plus the first month's rent. More expensive homes will require more option fee. Every home is different, and everything is negotiable.

If You're Not Ready To Rent to Own Yet

Maybe you need more time to build up the required option fee for a Rent to Own home. If so, that's OK, we can help you find a regular rental and advise you on getting into a Rent to Own home in a year or two. While you're increasing your savings, you'll also have time to improve your credit score, which will also help your situation.

Let Us Know What Kind of Home You're Looking For

Whether you're ready for Rent to Own or not, let us know your situation and we'll find you a nice rental, or a Rent to Own home you will eventually purchase and call your own. You can start by completing our application (CLICK HERE) or by calling Adam at 630-697-4500.

We'll let you know what homes we have available now as Rent to Own, or we can set up an MLS search of regular rental properties that meet your specific criteria.

Visit our website for more information: MyHappyHomeSolutions.com

Credit Scores 101 -- Understanding Your Credit Score

Understanding how your credit score is calculated can help you improve your credit score, and pay less money in interest on the credit you are offered. A lot of people treat their credit as if it doesn't matter. That's like telling the grocery store clerk, I know it's only $100 worth of food, but I want to give you $200 instead!

Your credit score is important, and a bad credit score will cost you thousands, possibly tens of thousands, of dollars over just a few years time if you don't maintain a good credit score.

Three Major Credit Repair Bureaus

These are the three major credit bureaus (aka credit reporting agencies): Equifax (EQ), Experian (EX), and TransUnion (TU). You’ll need to find out all three of your FICO scores to properly grasp your overall credit picture.

What is the range of FICO scores?

FICO (aka Classic or BEACON) scores can range from 300 to 850, but the majority of scores usually fall within the 600s and 700s.

FICO, FAKO, HUH?

FICO, FAKO, Credit Score, PlusScore, ScoreX, Vantage are all the same right? WRONG!

FICO = The score lenders use and the only score you care about.

FAKO = Any score that isn't a FICO. Most people like to buy the ScoreWatch product because you can quite often get updates as to your current EQ FICO score. myFICO Identity Theft Security Deluxe is similar to Score Watch except that is monitors TU. There is no FICO monitoring service for all three credit reporting agencies.

ScoreWatch

myFICO Identity Theft Security Deluxe

www.myfico.com sells FICO scores for EQ and TU.

**Update** July 2013, EX FICO scores are now available too.

www.truecredit.com or www.transunion.com sells FAKO scores only.

www.transunioncs.com used to sell FICO (TU score only) but no more.

Two Reasons You Can't Get a Score from MyFico

There are generally two reasons why you might not be able to get a score from MyFICO. Your score does not contain enough positive data to calculate a score, or there is a fraud alert on your file.

• Classic or BEACON FICO scores are generally the best indicator of credit-worthiness and a good overall indicator of where your credit (mortgage, credit card, auto,etc.) stands.
• Credit card enhanced (or bankcard enhanced scores) are specific indicators of credit worthiness with regards to credit cards only (not mortgages, auto, loans, etc.).
• Auto-enhanced scores are specific indicators of credit worthiness with regards to an auto loan. Consumers cannot purchase auto-enhanced scores.

Your actual FICO score ranges from 300-850, remember you have three separate FICO scores for each credit reporting agency EQ, EX, and TU.

Scores higher than 720-750+ are ideal. Any higher really doesn't matter. Once you get this high, you have excellent scores regardless.

Also, just because you have your score today doesn’t mean you can walk into the car dealership tomorrow and say “I have an 800+ FICO please give me the APR I want on my loan”, the lender may calculate a completely different FICO score and if you were to pull your FICO score again that day it may be different for you.

Remember, a FICO score is a quick look at the overall status of your credit. It may mean getting a better APR on the credit card you want, but it likely won’t determine whether you get the card or not (your credit report(s) will!).

                                                                                                     -- from http://ficoforums.myfico.com/

If you're ready to explore your options for purchasing a home -- whether you do so with conventional mortgage lending, or through seller financing, or Rent to Own -- Happy Home Solutions can help. Call or Text Adam at 630-697-4500. We always have Rent to Own homes available!