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Money Matters: How to Get the Most Out of Your Hobbies

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Whether you’re an avid gamer or a dedicated artist in your spare time, our hobbies often have a habit of representing a significant drain on our bank accounts. In an ideal world, of course, we would all be able to fill our downtime with plenty of rewarding and absorbing activities that do not cost the earth, it rarely seems to work out that way.

However, hobbies offer an excellent outlet for all of us. They enable us to forget about the stress and commitments of everyday life, and to take some time to ourselves to indulge in something that we truly love doing. So, if you are wondering how you can make your hobbies fit in with your finances, then read our tips below.

 

Look for the Best Introductory Offers

While very little in life comes free, there are plenty of opportunities to make the most of offers and deals that make our hobbies that much more attainable.

For gamers, for instance, there is a staggering variety of games available online that offer excellent introductory offers to help you get the most out of your money – including live casino from @Mansion in Canada, which offers new players 100% extra on up to £200 when you sign up.

Similarly, for those who enjoy photography, many of the best photo editing apps will offer ‘try before you buy’ trials that will give you an opportunity to get to grips with the tech – and decide whether it is the right option for you – before you sign up for a significant financial commitment.

 

Turn it into a Side Business

These days, with the help of the internet, almost any hobby can be used to start your own business. Whether you are keen to invest all your free time into growing a digital storefront, or simply want to make your one of a kind designs and creations available to a lucky few, creating a line of income that supports your passion is an incredibly rewarding and exciting prospect.

Take a look at this article, which offers some insight into the signs that you are ready to turn your skill or hobby into a lucrative business opportunity. There will, of course, be plenty of sharp learning curves to deal with along the way, but with the right commitment and perseverance, there is every chance of success on the horizon for anyone with a passion for their skills.

Teach Others

Again, this is a venture that has been made more attainable than ever with the help of the internet. Teaching others, and imparting the knowledge you have gained over the years, is not only a rewarding experience, but, as you grow your reach, you will find opportunities to generate some income – simply by investing your time and energy.

Consider writing a blog, or creating video content about what it is you are passionate about. From crochet and cookery to woodwork and music creation (and everything in between), you will find that there is already a strong community looking to learn from the experts, and develop their own skills under your guidance.

For gamers, streaming has reached an all-time high, with millions of hours being created – and viewed – each and every month. Signing up to a popular streaming site, such as Twitch, will enable you to develop relationships with likeminded individuals around the world.

 

Hobbies can be expensive, but they offer an incredibly rewarding experience to us, and should never be neglected just for that reason. There are plenty of options available to anyone looking to save money – or, of course, earn a little extra on the side – while still indulging their passions, and making the most of their spare time.

What Is the Grace Period for Mortgage Payments?

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Many households struggle to keep up with their mortgage payments. In some cases, uncertain financial times – like those created by the COVID-19 pandemic – are largely responsible. However, there are certainly other triggers that may make handling your payment difficult. That’s why understanding your mortgage payment grace period is so important. It lets you know how much time you have to manage your obligation before there are serious ramifications. If you want to learn more about the grace period for mortgage payments, here’s what you need to know.



What Is a Mortgage Payment Grace Period?

First, it’s important to understand what a grace period is and what it isn’t. In the simplest terms, for mortgage payments, a grace period is a specific amount of time after your payment due date. As long as your payment comes in during that window, you typically don’t experience any repercussions for your payment technically being late.

For example, by getting your payment in before the grace period ends, you shouldn’t face any late fees. Additionally, the lender usually won’t ding your credit.

Now, you may or may not accrue interest on the unpaid amount during your grace period. Whether that occurs depends on how interest is calculated on your loan and whether the lender opts to delay charging interest on that amount until the grace period expires.

How Do Grace Periods for Mortgage Payments Work?

A grace period is an automatic benefit that is part of your mortgage agreement. Generally, you don’t have to do anything to take advantage of it, aside from ensuring your payment comes in before that time period ends.

However, it’s best to review your mortgage to confirm precisely how yours works. The grace period clause will outline if there are any steps you need to take, such as contacting your lender to let them know that your payment will be late or something similar.

Why Do Lenders Offer a Grace Period on Mortgages?

Grace periods may seem like an odd thing for lenders to offer from a business perspective, as it prevents them from charging late fees the day after your payment is technically late. After all, fees can boost profits.

The trick is, many mortgage lenders are required to offer grace periods. Many states have laws designed to protect borrowers from late fees, including some rules that apply specifically to mortgages.

If a lender operates in a state with a grace period law, they have to offer one. If they don’t, they are breaking the law, and that can come back to hurt them.

However, there can also be other motivators for offering grace periods. For example, back when most people paid their bills by check, mail delays could make a payment seem late when it was actually sent out on time. Grace periods helped account for issues with mail delivery, ensuring borrowers weren’t unfairly penalized. While most people don’t pay by check today, it’s technically still an option available, so some lenders may maintain their grace periods based on that.

Similarly, grace periods can ensure that holidays don’t cause a payment to come in late. Banks generally don’t process transactions on weekends and federal holidays. If a person’s mortgage bill was due on a day when the banks aren’t processing transactions, it could make their payment seem late when it really isn’t.

Additionally, while most mortgages are due on the first of the month, people’s pay schedules may not align with that date. By offering a grace period, it gives borrowers a bit of flexibility, allowing them to send a payment when they receive their paycheck.

How Long is the Mortgage Payment Grace Period?

Precisely how long your mortgage payment grace period is depends on a few factors. Where you live plays a role, as local laws may determine the minimum length. Additionally, who your lender is matters.

Lenders can always choose to offer grace periods that are longer than state law requires, they just can’t make it shorter. As a result, not all lenders within a state use the same time frames.

However, with all of that in mind, a typical grace period lasts 10 to 15 days. If you want to know precisely how long yours is, you’ll need to check your mortgage paperwork, as it will be stated in a clause there.

In some cases, your grace period may also be noted on your monthly mortgage statement. Similarly, that information may be listed in your online mortgage account. But, if you don’t find it there, your best bet is to check your physical mortgage paperwork. If you can’t find the clause, then you may want to contact your lender directly and ask.

What Happens If I Can’t Pay Before Grace Period Ends?

Once the grace period passes, there can be consequences for not making your mortgage payment. The most common ones are late fees and potentially a ding on your credit report.

Late fees – like grace periods – are part of your mortgage agreement. That document will say whether you owe a flat fee, a percentage of your mortgage payment, or another amount for being late.

If your payment is 30 days late or more, then your lender can report the missed payment to the credit bureaus. At that point, you’ll see a derogatory mark on your credit report and, likely, a decline in your credit score. That derogatory mark can remain on your report for as long as seven years, causing long-term harm to your score.

If you know that you can’t make the payment before the end of the grace period, contact your lender. Depending on your situation (the reason you are having trouble missing the payment), there may be assistance available that can help you avoid fees and damage to your credit score. For example, you may qualify for a forbearance, ensuring you won’t be charged fees, penalties, or interest beyond the usual amount for a specific amount of time.

Speaking with your lender allows you to learn more about your options. That way, you can make the right financial choices based on your circumstances and potentially save your home and credit score while avoiding severe monetary penalties.

Do you think the grace period for mortgage payments is long enough? Why or why not? Share your thoughts in the comments below.

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How to Avoid NJ Exit Tax

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Federal income taxes are the same for every state. The only difference is how much money you make and what tax bracket you fall in.

State taxes are a completely different story because each state has its own rules. New Jersey is a perfect example with their “Exit Tax”. In this article, we’ll talk about ways to avoid NJ exit tax.


 

What’s the deal?

When you sell your NJ home and then move out of state, you have to pay the NJ exit tax.

When you sell a home, regardless of the state you live in, you have to pay tax on any gains you made. How much tax you pay depends on how long you owned and lived in the home.

According to NJMoneyHelp.com, “On June 29, 2004, New Jersey enacted P.L. 2004, Chapter 55, which requires sellers of real estate who are not residents of New Jersey to make an estimated income tax payment on the gain from the sale.”

It has nothing to do with selling and moving out of state. It’s just about selling the home and paying taxes on any gains made at the time of closing. The rule was enacted to ensure that NJ would receive the taxes owed on the property regardless if the seller was an NJ resident or not.

If you do not fill out one of the forms (see below) and pay the estimated taxes owed, the deed may be rejected.

Exemptions

There are 1 of 4 forms that you need to file when selling a home in NJ. Form GIT/Rep 3 Seller’s Residency Certification/Exemption – has 8 exemptions. The first applies to NJ residents. The remaining exemptions are listed below:

  • Real property was used as a principal residence and qualifies under IRC Section 121 of the Internal Revenue Code which excludes up to $500,000 of gain for married taxpayers, $250,000 for single taxpayers. Remember this does not include vacation or investment homes.
  • Addresses a mortgagor conveying the property to a mortgagee in foreclosure.
  • Seller is a governmental agency.
  • Seller is not an individual, estate, or trust, i.e. corporation, partnership, etc…
  • Total consideration is $1,000 or less
  • Gain from the sale will not be recognized if qualified under Sections 721 (contribution to a partnership), 1031 (like-kind exchanges), 1033 (involuntary conversions) and non-non-like kind property received
  • Transfer is by an executor/administrator of an estate pursuant to decedent’s Will

If one of these exemptions doesn’t apply to you, then you’ll have to pay tax on the proceeds and fill out Form GIT/Rep 1 or 2.

Conclusion

There are several ways to avoid NJ exit tax, but if you don’t qualify for one of those ways, make sure you fill out one of those forms and pay the taxes due.

Related Reading:

Should You Report Income From the Sale of Your Home on Your Income Taxes?

How is Passive Income Taxed?

Why Financial Literacy is Important

What Are The Different Types of Wealth?

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Most people think “lots of money” when they hear the term wealth. Though that is part of the basket, we’ll call it that today, it’s not the only part of the wealth equation.

There are four different types of wealth: financial, social, time, and health.

In today’s post, we’ll go over each, what they consist of, and what you can do to get more.

Financial

We’ll tackle this one right away; this is The Free FINANCIAL Advisor, after all. Financial wealth is what everyone has in mind when the term wealth is used.

Whether that means investments, savings, disposable income, no debt, what have you. Financial wealth implies that you don’t have to worry about your finances and you can now spend on things that matter to you.

To improve your financial wealth, there are a few things you can do:

  • Eliminate your debt – Debt costs you money, both in interest and opportunities. Opportunities to invest and/or to free up your time (more on that in a bit).
  • Invest – stock market, direct lending, real estate, or hard assets (precious metals, art, ect.).
  • Spend wisely – Keep a budget, review your expenses, and monitor your spending.

In my opinion, financial wealth is the least important of the four types of wealth we’ll discuss here. My explanation is in the “conclusion” section.

Social

There are two ways you can look at Social Wealth. One way is status – your social hierarchy and social class. The other way (and how I look at it) is your connections and relationships.

Unfortunately, social hierarchy is important in today’s society. People higher up in the ranks tend to have better connections and job opportunities. I’m not discounting its importance but underlining how integral good relationships are to your life.

We’re social creatures. We evolved this way. That’s why we care what people think, and that’s why we need to nurture our friendships. Healthy relationships help us live longer, happier lives.

Do you want to improve this? Communicate with people that align with your values. Tell people what they mean to you. If you love your buddy, tell them you love them.

This brings me to the next type of wealth.

Time

We truly do not know when our time will run out, for you or for me. That’s why it’s so incredibly important to make the most of it.

Using your “financial wealth” to free up your time is a great way to “create” more of it. Would rather spend time with your family and not cut the grass? Pay someone to do it for you.

Time is our most precious, yet our most wasted resource. We always think, “maybe tomorrow” or “I’ll do it next week”. Next week might not get here. If it crosses your mind, take action.

I elaborate on this in last week’s reflection

Health

I can’t decide if time or health are the most underappreciated forms of wealth. Time is the most finite of resources, but I feel like health is an afterthought, in most cases.

Your body and your mind have to be a priority. Watch what you eat, take walks, exercise, journal, meditate, speak with a therapist. Whatever you need to do to be mentally and physically healthy, I promise you, it’s worth the time/money/energy.

Conclusion

If I had to rank these types of wealth in order of importance, I’d go time, health, social, and financial. Your rankings may differ, as this is my personal opinion.

Without time, you have nothing. If you have the time, focus on your health and your relationships. If you don’t have either of those, having money doesn’t mean a darn thing.

Related reading:

The Psychology of Money

Ways to Increase Your Wealth

What Are The Levels of Wealth?

The Best Online Personal Loan Rates You Can Obtain Now

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An online personal loan is one of those borrowing options that a borrower can use for various purposes. That’s why it’s no wonder that it’s on the list of today’s most popular loan types. A personal loan is commonly used for debt consolidation, financing home renovations, paying for car repairs, covering medical expenses, etc.

When it comes to the interest rates, this loan option has APRs ranging from 6% to 36%. The information on your credit profile, such as your credit score and debt ratio, plays a big role in the interest rate you can get for the loan.

Consider the interest rate of your online personal loan because it’s the primary factor on how much the loan will cost you during its lifespan. Compare the best online personal loans rates from Match Financial for you to have an idea regarding this matter.

Upgrade

As one of the trailblazers of fintech, Upgrade is indeed a personal loan provider you can trust. This lending company is one of the companies that helped shape the online and mobile banking industry.

It’s also well-known for providing online personal loans with reasonable annual percentage rates. Upgrade offers an average interest rate of 8% for its personal loans to borrowers.

SoFi (Social Finance Inc.)

Social Finance Inc., better known as SoFi, has been one of the leading lending companies that offer personal loans with inexpensive interest rates. Borrowers can obtain a personal loan amounting up to $100,000 with APRs of 12.86%. Of course, that percentage may vary according to your credit score and the term of your loan.

Prosper

In 2005, the US-based lending company Prosper was established. Like the two lending companies mentioned above, Prosper also carved its name among the top personal loan providers today.

Borrowers can obtain loans amounting from $3,000 to $50,000 with repayment periods of up to 36 months from Prosper. The average interest rate of personal loans at Prosper is approximately 14.20%.

When Should You Apply for an Online Personal Loan?

Be smart when it comes to getting an online personal loan. It’s advised that you only apply for it when you need money for important expenses or investments. For example, you can use the cash you get from this loan for home renovations. Improving your house is an investment that can boost its market value and bring you profits in the future.

Another reason for obtaining an online personal loan is if you need to get rid of high-interest debts. Personal loans are commonly used for debt consolidation, which allows you to pay off your debts at a lower interest rate and monthly payment. Using a personal loan this way benefits you because it can repair your credit score.

It’s also wise to choose this loan option if you don’t have sufficient money to pay for your utility or medical bills. Such matters are under the category of essential expenses. The bottom line here is that you should only apply for an online personal loan if used for an important purpose.

Tips Before Submitting Your Personal Loan Application

Before applying for an online personal loan, there are things that you need to consider to boost your chances of getting your application approved.

  • While you can avail of an online personal loan even if your credit score is fair or poor, it’s still advisable to have a good to exceptional credit to enjoy advantageous interest rates. So, before you decide to choose this loan option, make sure to build or improve your credit.
  • Inquire from different loan providers and compare what they have to offer. The APR, extra charges, repayment term, and loan amount should be your top considerations when comparing lenders.
  • Missed or late payments should be avoided when you’re tied in a loan contract because it can ruin your credit score. So, make sure that you create a budget plan to ensure that your repayment fits your monthly budget, and you make on-time payments.

Is It a Good idea to Pre-Qualify for a Loan?

The answer to this question is yes. Getting a loan prequalification is beneficial to you because you’ll know beforehand the loan amount you can take in your financial situation and whether the lender is willing to approve it. Another good thing about prequalification is that it won’t hurt your credit score.

You can obtain a loan prequalification from different lenders to compare what they have to offer. Make sure to pick the one that can provide you with the most favorable interest rate and then formally apply for the loan.

Takeaway

Whenever you apply for an online personal loan, you should see to it that the interest rate is affordable for your financial situation. Upgrade, SoFi, and Prosper are three lending companies that offer the most affordable rates right now. Just review this article for more information on how to find the best personal loans with lower interest rates.

 

What Are The Levels Of Wealth?

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There are several different ways to view wealth and the “levels” associated with it. Some people like to rank it in three tiers: not concerned with debt, not concerned with restaurant prices, and not concerned with spending on vacation.

I think this is a good place to start, but it can leave out some pretty important details.

In this article, we’ll break down our five levels of wealth, what they mean, and how you can identify where you sit.

Levels of wealth

As I mentioned in the introduction, we identified 5 levels of wealth. Below lists what those levels are, the details about them, and identifying characteristics.

  • Pay off debt and save
    • You can pay your bills. You may be paycheck to paycheck, depending on what you think that means, but you’re not falling behind. Liabilities are becoming less of a burden and your net worth is improving.
    • Development of habits – saving money and paying off debt. You’re probably wary of how much you spend on certain items, groceries, for example.
  • Increase savings and use investment vehicles
    • Your goals of paying off “high-interest” debt and establishing an emergency fund have been met. Your attention shifts to planning far ahead. Retirement savings and investing are your focus.
    • Saving at least 15% of your income for retirement and future goals. Automation implementation. Tracking net worth. Probably a little less concerned about your day to day spending.
  • Feeling comfortable and spending changes
    • You’re much less concerned about your discretionary spending. Though you’re less willing to spend money on stuff and more willing to spend money on experiences, and/or you’re encouraged to spend money on things that will create memories.
  • Financial freedom
    • You exceeded your goal net worth or nest egg number. Daily spending and discretionary purchases don’t register. You’re not concerned with how much you spend in most cases. Make sure, however, that how much you spend and how much you have actually makes sense from a mathematical perspective. There’s nothing worse than thinking you have more than you actually do. 
  • Philanthropy
    • One thing to keep in mind: make sure you are making memories and creating quality experiences before you get to this point, as well as after you get here. Time is limited. Make the most of it.
    • The quality of the experience matters more than the price. You shift your focus to using your wealth for good. How can you spend to make the world a better place?

What this all means for you

There are three things I would like you to walk away with from this article.

The first two steps in climbing the wealth ladder:

  1. Discern what level of wealth you are looking for, and what it specifically looks like for you. Everyone has different values and different wants, that means what your Financial Freedom looks like will differ from what Jane Smith’s level will look like.
  2. Craft a plan to get to your desired level. Figuring out what you want and what it looks like is great, but a goal without a plan or action is just a dream. Make it a reality.
  3. Financial wealth is great but should be viewed as a tool. It can also be viewed as a relief or peace of mind when you get to YOUR level. However, time is our most precious commodity. Truly wealthy individuals realize this truth and orient their lives accordingly.

Related reading:

Why Financial Literacy is Important

Your Wealth: What You Shouldn’t Do

Ways to Increase Your Wealth

5 Reasons Applying For A Loan Online Can Benefit You 

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From banking, shopping, dating, even money lending, a lot of things now take place online, thanks to the ever-developing technology. Though among them, money lending has been slower to adapt to the upgrade of technology. The good thing is, as years pass by, more private lenders are adapting to changes to cater to the demands for accessible money lending services. [Read more…]

Where Do I Send My Child to School?

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At the present moment, we’re figuring out what school to send our three-year-old for K-4 next year. I’ve had a lot to think about and it’s opened my eyes as to what matters to me. It has also given me a chance to evaluate my current living situation and where I want to end up.

This is actually quite frustrating for me, as I made a decision for a school district and a city to live in late last year. It’s why I’m living in Brookfield, WI. Elmbrook School District is the best in the state of Wisconsin right now.

However, after speaking with people (prior students and parents with children in school) and reflecting, I don’t know if Brookfield and Elmbrook School District are the way forward. I have three areas of concern when it comes to the school we choose.

Character development

I read How Children Succeed by Paul Tough, and one of the important themes in the book was character development. Both the impact home has on that development and what school can do to help.

Ideally, I’d like a school that sees the value of improving one’s character. What’s more important than that, though, is how teachers, administration, and peers treat students.

Treatment of students

I need to know that there is a culture of mutual respect between students and teachers, the teachers and faculty have the students’ best interest at heart, mental health is taken seriously, and the possible steps needed to thwart bullying have been taken.

I think all of these points start with culture. I feel like if mental health is taken seriously, respect is earned and given, then bullying might be less of an issue – I have no facts to support this, just an opinion. A culture derived from character, respect, and tolerance, I believe, has the greatest chance of student/teacher success.

Opportunities

Will my son like sports or theater? Chess or music? In the end, I don’t care. My job is not that of influencing what he participates in, it’s supporting his passions. That said, I would like where he goes to school to have broad opportunities available to him, so he is able to pursue those passions are.

Home

There’s no doubt that school is important. It’s where students learn what they need to in order to keep progressing academically. It’s where they develop their personalities and socialize with their peers. However, I believe what we teach at home is more important.

At home, kids learn about manners, right and wrong, and work ethic. As a parent, you have an impact on the early parts of your child’s life and how they develop into young people. Your child’s personality and genetic wiring will be a driving force, but I think we, parents, have at least one hand on the wheel.

Where’s home?

For me to be at my best as a parent, does the living situation make a difference? Do I move again? Do I move to a place where I feel more “at home”? Or is it a matter of viewing things through a positive lens and making the most of what I have?

I really don’t know the answer to that. Currently, as I said, I’m in Brookfield, WI. Good city, great school district. I own a home in Oconomowoc that I’m renting. So right there, he has two options of where he can go to school (that’s without open enrollment – not off the table).

However, I would like to live in close proximity to the school he attends. He can make friends in the neighborhood or in the area that go to the same school as him.

Conclusion

I haven’t decided yet on where my son will attend school. The last step in the process is a tour and a conversation with some of the administration.

In the last year, a lot of my decisions when people are involved have come down to the energy/vibe I get from them, and my gut. Once we tour the school and I speak with some of the faculty, the decision will become easier.

Related reading:

My last reflection

Back to School Money Tips

When are Per Diem Payments Taxable?

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Per diem payments are used when businesses have employees that travel. These payments are designed to relieve the employee from certain costs associated with traveling. Particularly meals and incidentals (ground travel, laundry, room service, etc.), and lodging.

This is great for both the business and the employee, but there are certain situations when per diem payments are taxable. In this article, we’ll explore exactly when an employee will pay per diem tax.

Two types

There are two types of per diem payments, meal-only, and meal and lodging. The names imply their use. One pays for meals, the other pays for meals and lodging.

It’s important that we specify the meals must be “non-entertainment related” meals.

Stipulations

As with many parts within the tax code, per diem rules are very specific. Meals and lodging have different rates.

Also, different cities have different rates. These differences are typically relegated to “big cities” and “small cities”, with bigger cities getting the larger rates. This is referred to as the high-low method. Businesses may also make payments based on the state in which you travel.

The per diem payments must be equal to or less than the federal allowable limit (depending on what method is selected). The employee is responsible for filing an expense report within 60 days. The expense report needs to include, date and location of the trip, purpose of the trip, and lodging receipts (if the meal-only option is selected).

You’re not allowed to “transfer credits”. What’s meant by this is if you use less on your lodging than is allotted, you can’t use the excess on food, or vice versa.

Tax Consequences

As I mentioned in the introduction, per diem payments can have tax consequences.

  • If per diem payments over the limit are taxable on the employee’s wages
  • If an expense report isn’t filed, or the filed expense report doesn’t include the required information, those per diem payments become taxable to the employee.
  • If the employer allows you, the employee, to keep whatever you don’t spend.

If you travel for business and receive per diem payments, just make sure you keep good records, and you hang onto your receipts. It’s better to have too much information than not enough.

Related reading:

Some Often Overlooked Tax Deductions for Busines Owners

Top 5 Overlooked Tax Deductions You Should Be Using

Why Financial Literacy is Important

 

*Be advised: Securities America and its representatives do not provide tax advice. Please consult a tax professional for specific information regarding your individual situation.