Kuntala Banerjee, Author at unremot.com

How can you reduce your total loan cost | Paths to debt-free life

Loans can be used for various purposes and depending on where the borrowed money is leveraged, the loan types are defined accordingly. Let’s take a deep dive into how can you reduce your total loan cost?

There are home loans, education loans, small business loans, loans for credit cards, home equity loans, personal loans, car loans and cash advances. But among them, education loans are statistically the biggest and the most prominent.

Also read: Reddit personal finance | 21 Best Subreddits on Personal Finance

What is interest capitalization?

There is a principal amount associated with all student loans. When the interest is not paid as per the time schedule, then the unpaid interest is capitalised by the lender. Interest capitalization happens when the unpaid interest gets summed up to the loan principal amount. The total principal amount increases and interest is then charged on that higher amount, increasing the loan cost.

Accrued interest vs capitalized interest

Accrual interest is the interest amount incurred or accrue debt on a loan and which has not been paid yet. It is booked at the end of an accounting period and recorded as an adjusting journal entry in the books. Interest accrual is reversed at the start of the next accounting period.

Whereas capitalized interest is the amount of accrued interest on the compound interest to be paid. It is essentially a type of compound interest used in record keeping.

Incurred interest

Incurred interest is the aggregation of accrual interest and the capitalized interest that needs to be paid in a particular accounting period. The loan fees are excluded from the summation. It is essentially your liability and debt to be paid against a loan.

Accrued interest

Accrual interest is the interest amount that gets accumulated against a loan when the loan payments are not done. It is basically the unpaid debt against a loan. At the end of the accounting period, you need to book it in your ledger.

Also read: How to become financially independent? | 10 Best ways to gain financial freedom

Which student loans to pay off first

To decide on which student loans to pay off first, you need to check out whether you have private loans or federal loans. Private loans are granted by commercial lenders and hence very few repayment options. But they have higher interest rates. If you are eager to pay off the small balances first then target the private loans first. Federal loans have higher interest rates. Paying off them first will save you more money.

Top tips on how can you reduce your total loan cost

Go for a higher down payment to reduce the amount of loan to be borrowed.
Opt for a loan where the repayment tenure is long; this distributes the loan repayment amount for a fairly long period of time
Choose a step-down EMI plan wherein you have to pay more EMI at the beginning and then the amount slowly reduces in the coming months
Think of availing the loan from the bank where you are a customer and negotiate for lower interest rates
Check provisions for part repayment of loan helps in reducing the loan burden and the loan cost

Also read: How much money should I save before buying a house? | A financial guide

How to pay off student loans fast

In order to know how to pay off student loans fast, it is advisable to understand do students loans accrue interest while in school and several other queries. In the subsequent sections, you can find out the best way to pay off student loans.

How does student loan interest work

To know, how does student loan interest work, check out when do student loans start accruing interest and how does interest accrue on student loans. Check out the following terms in the loan document – disbursement date, loan amount, interest rate, first payment date and the payment term.

Paying off student loans early

If you are thinking, whether paying off student loans early is a good decision? The answer is Yes. It is good to pay off loan early to avoid interest. If you can arrange for money earlier than the loan tenure, then paying off student loans in full is a good decision.

Can you negotiate student loan payoff

Yes, you can negotiate on the settlement options and the terms to pay interest on student loans. But it is advisable to be prompt in payments and not default, to allow bargain and negotiation.

Also read: 25 Essential Questions to ask a financial advisor | Know your advisor

Federal student loans interest rate

A very important thing to remember while paying off loans is the ongoing federal student loans interest rate. It is about 3.73%; with this, you can decide how to get a lower interest rate on student loans. It will also help you to judge how to lower student loan payments. Also, understand how capitalizing on federal loans will affect you in the long run.

How to lower student loan payments

Here are some of the ways on how to lower student loan payments and eventually how can you reduce your total loan cost:

Select a repayment plan depending on your cash flow and savings:
- Extended repayment plan
- Graduated repayment plan
- Income sensitive repayment plan
- Income-driven repayment plan
For the fastest way to pay off student loans, opt for automatic payments which may result in the lender reducing the interest rate
Ensure to make your loan repayments as per the payment terms, the best answer on how to reduce student loans debt
If you have multiple federal loans, the recommendation is to consolidate all the loans and go for a direct consolidation loan. This will ensure one monthly payment and one due date.
Refinance your student loans

Also read: How to double your money | 20+ Best ways to double your money!

Things you must know about paying off student loans

There are some important things you must know about paying off student loans. In the subsequent sections, we will discuss some common questions being asked by students and the answers to them.

What do student loans cover?

You get a student loan for living costs in a hostel or student loans for living expenses off-campus. In additions, the loan covers tuition fees, books and courseware, library fees and other related expenses. Some loans cover even the purchase of vehicles to a certain limited amount.

Do you get student loans for living expenses?

Can you use student loans for rent or use student loans for living expenses off-campus? Well, you can get student loans for living expenses. If you are staying in a hostel or in a rent outside the campus, you can use the loans for the same.

Should I pay off student loans early?

The quickest way to pay off student loans is to pay them early. The accrued interest or unpaid interest to be capitalized leads to increase in the loan amount. To avoid that, it is advisable to pay off the loans as early as possible.

How to check my student loan balance?

Use the NSLDS, the National Student Loan Data System. It is a database which is run by the Department of Education. When someone enrols into a college or an university, the administration department sends loan information to NSLDS.

How to not pay student loans?

If you don’t want to pay off student loans or save your money, the best is to opt for an income driven repayment plan. You can also pursue a career in public service, serve your country or check for loan repayment assistance programs.

What happens if you don’t pay off student loans?

The answer is, if you miss settling student loan debt then there can be negative impacts like reduction in credit score or a bad credit report.

Do deferred student loans affect debt to income ratio?

If you want to get out of student loan debt, then you must not defer student loans more than a year. Your debt to income ratio may get affected if you defer loans for multiple years.

How can I stop student loans from taking my taxes?

If you have a question, “How can I stop student loans from taking my taxes?”

The answer is, make your loan repayments on time for reducing interest rate. Check for student loan refinancing or check if you do qualify for a student loan forgiveness program.

Best way to reduce your total home loan cost

Here are some of the best ways or tips to reduce your total home loan cost:

Check for short tenures for home loans so that the overall interest payable is less
Check – “What is a good total interest percentage?” after comparing the interest rates online of the various lenders or banks
Try to make prepayments before the loan payment schedules which reduces the total principal amount
Go for more down payments, so that you need not have to avail for more student loans.
You can also increase your EMIs in between if you have a job with good salary
Check for better deals from lenders if you have a good credit history and credit score

How to avoid paying interest on car loan?

Pay your monthly amount every 2 weeks or pay a heavy amount every year
To reduce interest on unsubsidized loans, never skip the payments
Refinance your car loans
Round up your loan payment amount to reduce the tenure as well as the interest rate

Kuntala Banerjee

Kuntala is a versatile writer with a focus on diverse areas around work, productivity, collaboration at work, hiring, management, HR, and training. Her background of past experience in technology and consulting helps in molding razor-sharp insights into the research and user-focused content she creates. Professionally she is an IT consultant in a sales role and also a writer of short stories and poems, travel blogger, and fashion influencer.

Influencer leadership – Definition, Traits & Examples

Leadership

Influencer leadership is a style where the leader or executive inspires or motivates people or subordinates through their techniques, strategies, knowledge, innovations and thoughts. They encourage people to be responsible and are empathetic towards them, guiding and assisting them in their activities.

In this article, we will extensively discuss influencer leadership and how to become influencer leaders or thought leaders with some illustrating examples.

What is influencer leadership?

While talking of influencer leadership, the focus point is on leading by value and commitments. Leadership influencers have well-defined strategies and goals in their mind with clear vision and objectives. They motivate, inspire, guide and aid people in pursuing the mission with vigility and agilance.

The particular leadership style is all about promoting innovative and inclusive ideas that will help in achieving the objectives seamlessly. The leaders bring a sense of responsibility in fulfilling the goals with better productivity, focused on creativities and ingenious ideas. Besides they ensure the latest industry trends, best practices and standards are being followed.

Read: 21 irrefutable laws of leadership | With examples

Key traits of leadership influencers

The key traits of leadership influencers are illustrated below:

The professionals align their self-interests with the goals and objectives of the company. They ensure both are balanced to bring in a win-win situation.
Influencer leadership is a style where the leaders seek in investing in new innovations, and trends in technologies to be competitive in the market. They understand the importance of staying ahead in the race.
Influencer leaders stress on strategic visions for future growth that will churn in more revenue and market presence. They love to work on big visions and goals to place the company best in the sector.
Stress on collaboration with fellow influencers for aiding and assisting each other. They create communities for resolving each others problems and issues.
Influencer leaders love to experiment and take on risks. They strive to overcome barriers while pursuing their objectives.
They are good listeners and good communicators. Understanding others by careful listening and focused attention is a very important trait of them. Besides they love conveying clear and concise messages.
Influencers focus on continual learning and development for upgrading their competencies and enhancing their knowledge. This helps in awareness of the latest trends and applying them well in the tasks and activities

Also read: How to inculcate inclusive leadership in your organization

What makes you an influencer leader?

Let us now try to answer the question, “What makes you an influencer leader?”

Trust is a very important factor in determining what makes you an influencer. You need to have faith in your team and provide them opportunities to assume responsibilities
Connect with people for seamless collaboration and effective communication. To aid and assist people in resolving problems and issues
Encourage people in achieving the vision and mission with focused and dedicated attention. Influencer leadership is all about instilling confidence in the team to achieve the goals faster.
Curating situations that help the team to gain success in their activities and tasks. They encourage in leveraging innovations and ideas that help in achieving their objectives with better productivity
Do not be authoritative only but motivate and inspire your team to move forward. Provide them requisite guidance and advice to focus on their goals and seek growth opportunities.
Be generous, kind and attentive towards the team. Empathize and listen to them so that they shower trust and confidence in you. When you question what makes someone an influencer, believing in you is one of the important factors for judging your behavioural characteristics and attitude.

Also read: How to learn from animals & become effective leaders [with examples]

Influencer leadership examples

Here are some of the influencer leadership examples, that you can follow. Noticeably this section will focus on the leaders or dignitaries who have been known for their influential leadership.

Alexander the Great – The great Greek king was an influential leader, who commanded a huge army towards victory.
Charles Darwin – Prominent geologist, who influenced people by his evolutionary theory
Plato – A renowned philosopher and mathematician, Plato was phenomenal in leading by example. He laid the foundation of Western philosophy and science, thus influencing people by his phenomenal discovery
William Shakespeare – Prominent Engish poet and author, whose contribution to literature has influenced the minds of many poetry and story lovers. His creativity had been significant in driving the essence of literature.
Mahatma Gandhi – Father of the Nation of India. His values and virtues of life, and struggle for Independence by being at the forefront had influenced many Indians. He taught people to be honest, truthful, and good human beings.
Abraham Lincoln – A man of stature and dignity. He influenced the people of America by his moral values of life. His contribution to uniting the nation and its people are stupendous.
George Washington – An influential leader who is significant in heading over the convention that drafted the constitution of the United States. He led the country and its people from the forefront
Gautama Buddha – He enlightened the world with his preachings to love human beings and help them to get rid of their sufferings. Buddha inculcated a spirit of humanity among the people, urging them to understand reality and act accordingly.
Karl Marx – A German socialist, economist and philosopher, who has been phenomenal in the world of economics. He was influential in establishing the meaning of labour and its relation to capital.
Martin Luther King Jr – He was a voracious spokesperson who was significant in influencing people to fight for their social, civil and legal rights.

Also read: 15 frequently seen leadership weaknesses and ways to fix them

How do you influence others as a leader?

Influencer leadership is not only leading from the front but also encouraging people to be responsible and confident with the tasks at hand. A leader must appreciate the activities of the team and energize them to move forward in achieving the goals. The talent and skills of the team must be appreciated along with proper guidance and assistance.

Besides, they promote the team for recognition in the company; awarding or complimenting them for their achievements. They collaborate and communicate elaborately and clearly as and when needed, leaving no ambiguities.

Anticipating risks and assisting the team to overcome and mitigate them, are some of the greatest traits of an influential and expert leader. This helps in gaining trust and faith in the leader. In the end, proper planning and organizing skills govern the capability of a leader.

Thought leaders and influencer leaders

Thought leaders and influencer leaders to follow are:

Andrew Ng – Entrepreneur and scientist focusing on Artificial Intelligence and Machine Learning
Kirk Borne – Phenomenal for NextGen Analytics and Data Science, currently at Booz Allen Hamilton
Tamara McCleary – CEO of Thulium, branding expert and an influencer
Bernard Marr – Bestselling author, business and technology advisor and keynote speaker
Evan Kirstel – A tech influencer and key opinion leader
Ronald van Loon – He is on the advisory board of Simplilearn and is considered a key influencer
Mike Quindazzi – managing director, Business Development Leader and the U.S. digital alliances leader for PwC

How can I be a good influencer as a leader?

So, how can you be a good influence as a leader?

Well, you need to trust people and listen to people to be a good influencer. He or she must be able to connect with the people and influence them to achieve the goals and objectives of the program or the company as a whole. You need to possess a strong and confident character with poise and integrity for influencing others. Lastly you need to be generous and attentive with the team, listening to their thoughts and ideas while appreciating their work.

Also read: 5 levels of leadership | John Maxwell’s 5 levels of leadership explained

Are social influencers leaders?

In today’s world, the use of social media platforms is significantly high. Almost 45 to 50% of the world population uses social media. Hence influencing them through these platforms is highly beneficial.

Well, yes social influencers are leaders. These professionals are experts in their domain, sector or technology. They share their knowledge among the people to help and assist. They deal with the trends, thus attracting lot more followers. Many times, they help in sorting out the problems and issues of the people in general. They do promote products and services by sharing their experience, reviews and feedback.

What is an influencer leadership style?

An influencer leadership style is a leadership style that is more focused on the vision, mission, and strategic objectives of a company and even the programs executed in a company. They spread the message of targeting the mission with the purpose of benefiting the organization and in turn the employees. Influenced leadership stresses on sharing of knowledge through the collaboration for success.

The leaders communicate the messages in simple terms for easy consumption and application in work and the tasks in hand. They are also compassionate and encourage the team to pursue growth. They bring in innovations and long term strategies into the programs, introducing new techniques and methodologies in the company.

Kuntala Banerjee

Reddit personal finance | 21 Best Subreddits on Personal Finance

Finance

If you want to expand your knowledge on how to start planning your finances, Reddit personal finance communities are a great place to begin and get your questions answered. In this post, we list out the best subreddits.

What is personal finance?

Personal finance is a concept to manage money that includes investments and savings. On a broad level, it caters to all the financial services related to an individual or a household. It can be insurance, budgets, bank accounts, mortgages, taxes, future planning, and real estate.

Reddit personal finance forum consists of several communities called subreddits which handle various categories of personal finance. You can create or participate in the discussion threads and also comment on them.

Reddit community

Reddit community is a type of social media platform. The community consists of various forums or subreddits. Each of the subreddit has a name and purpose behind it. The curators of the content in them are individuals who are experts or are seeking guidance on a topic. The content is up-voted or down-voted by the community members, depending on their relevance and their utility. So you can expect a democratic mechanism with potentially good information shared filtering out unnecessary redundant content.

Also read: 25 Essential questions to ask a financial advisor | Know your advisor

21 Best subreddits on personal finance

Let us now explore the list of subreddits on personal finance that are popular and useful. They are the vest Reddit threads; highly engaging with quality discussions and are well curated. The threads are all part of the Reddit personal finance community forum.

1. r/personalfinance

r/personalfinance is the best subreddit of all time in the community dealing with personal finance. The size of the community is almost 14.8 Million. It deals with a number of topics like budgeting, investment, retirement planning, credit, debts, savings planning and many more. Prime Directive is one of its key guides on personal finance.

Members: 14.8 Million

2. Reddit financial independence

Reddit financial independence or r/financialindependence forum deals mainly with techniques and methodologies for being financially independent as the name suggests. The financial independence reddit community as almost 966K members. Every day it has a “Daily FI Thread” for addressing issues and concerns.

Members: 966K

3. Reddit fatfire

Reddit fatfire or r/fatFIRE community deals with wealth and financial independence as well as early retirement planning. It has 209K members at present. The community runs multiple threads related to wealth planning after losing a job, hiring employees or personal assistants, buying and selling of investments, savings planning guidance etc.

Members: 209K

4. Reddit frugal

Reddit frugal or r/Frugal is one of the active personal finance reddit communities that deal with different aspects of frugality. The member count in this forum is almost 2 Million which is quite huge. The subreddit serves as a directory for the other reddit personal finance communities like cheapmeals, budgetfood, and simpleliving. It conducts weekly threads for sharing your hauls and finding the same.

Members: 2M

5. Reddit poverty finance

r/povertyfinance is a subreddit that deals with discussions that are centered around providing financial advice and guidance. Its key concept is the wiki resource page. The community hosts a number of supportive threads.

Members: 897K

Also read: How much money should I save before buying a house?

6. Reddit student loans

Reddit student loans subreddit – r/StudentLoans focuses on discussions, guidance and information related to student loans. Some of its common threads include how to repay a student loan, the best way to apply and get a loan, verification of the repay interest rate.

Members: 122K

7. Reddit credit cards

Reddit credit cards – r/CreditCards subreddit helps in finding out information related to credit cards and the best ways to pay off a credit card balance.The key threads of this community are the stories posted by individuals on how they have become debt-free from their credit card balance.

Members: 515K

8. Passive income reddit

Passive income reddit or r/Passive_Income is a community focusing on how to create passive income streams. The subreddit has multiple threads where people share their expertise and experience on how successfully they have created passive income over and above active income.

Members: 183K

9. Reddit real estate investing

Reddit real estate investing – r/realestateinvesting deals with discussions, experiences and information related to real estate investing. Some of its key threads are advice on selling rental property, buying property with zero downpayments, hard money lending and so on.

Members: 1.1M

10. Dave Ramsey Reddit

Dave Ramsey Reddit – r/DaveRamsey subreddit guides people to be relieved of their debt and be financially stable and peaceful by following the rules and principles stated by Dave Ramsey. Some of the key threads running in the forum are emergency funds, mortgage, self business, owning assets etc.

Members: 68.8K

Also read: How to start a business with no money?

11. Roth ira Reddit

r/RothIRA community discusses issues related to Roth Individual retirement account (IRA). The IRA mandates paying of taxes when money goes into the account but then afterwards the future withdrawals are tax-free. Some interesting discussions in the forum are related to best mutual funds for Roth ira, fidelity investments Roth ira and others.

Members: 4K

12. Reddit side hustles

r/SideHustle is a subreddit that has discussions and information related to a side hustle. By side hustle, we mean multiple streams of income that may turn out to be a permanent job, can help in paying off debt and bring in a sense of satisfaction.

Members: 61K

13. Reddit tax refund

Reddit tax refund is a part of a subreddit called Refundchamps. You can discuss tax refunds in this community forum. The threads are focused on current refunds strategies and also helping out people on refund issues.

Members: 4.9K

14. Reddit debt free

Reddit debt-free is a community which deals with discussions and issues on how to stay debt-free. The key threads running on the forum are on debt management, debt settlement, advice on how to handle debts, journey to debt freedom and many more.

Members: 22.7K

15. Reddit investing

Reddit investing or investing for beginners Reddit is taglined as “Lose money with friends”. There are daily discussion threads in this forum on investments. The forum hosts discussions on mutual funds, stocks, cash reserves, bonds and many more.

Members: 2M

Also read: Estate planning attorney | Top things know before hiring an estate planing attorney

16. Reddit wallstreetbets

r/wallstreetbets is a forum or subreddit where the information, norms, guidelines and announcements related to Wall Street are discussed. You can engage in the daily discussion threads and what are your moves tomorrow threads for details related New York Stock Exchange, US brokerage and investments.

Members: 11.3M

17. Reddit budget

The r/Budget helps in finding out solutions on building up a robust and effective financial plan and budget. The common and popular threads in the subreddit are tips on reducing spending, help to come out with a budget, ISO new lifestyle budget advice and many more.

Members: 18.7K

18. Reddit bogleheads

Reddit bogleheads – r/Bogleheads deals with passive index investing. The name has been given on the basis of Jack Bogle, the founder of Vanguard. In this forum, you can explore and find out discussions related to Bogle’s theory on simple, low cost, tax-efficient and broadly diversified investment.

Members: 119K

19. life insurance Reddit

There is an insurance subreddit which has discussions on different kinds of insurance. Life insurance is one of them. You can seek information related to life insurance, know how to detect frauds and report the same and many more.

Members: 63.1K

20. Reddit banking

r/Banking, deals with different concepts of banking. It may be savings, checking or cash deposits. The common threads focus on credit cards, interest rates, money transfer, usage of Zelle and so on.

Members: 43.6K

Also read: Cryptocurrency Consultant

21. Reddit cryptoCurrrency

This subreddit mainly deals with news, analysis and discussions related to cryptocurrency. There are daily discussion threads and giveaways. An interesting debate posted in the forum – Binance is the largest holder of bitcoin, does that make them a sort of a bank?

Members: 4.1 Million

Best Reddit personal finance tips

Here are some of the best Reddit personal finance tips which you can refer to for your assistance and guidance for the future or for your current state of affairs. The Reddit finance tips are provided by experts and financial advisors, hence are bound to be trustworthy.

Tips on money hacks

On the Reddit personal finance or r personalfinance forum, there is an interesting tip on money hack. It says “Think twice before spending to save”. Even if there are good deals available and you may think that you are saving money, but with that temptation, you are actually spending more money.

How to invest Reddit tips

In the investing thread and under how to invest Reddit tips, one of the popular posts is – “What is your best investing tip for youngsters?” The suggestion is to go for small companies and safe investment opportunities like a basic exchange-traded fund (ETF).

One of the Reddit stock tips

As part of the subreddit forum on stock_picks, you can discuss on day to day trading issues. One such discussion is on – four – 100 per cent stock growth in the forecast; where they talk about Shift4 payments, Starlink and Yahoo Finance.

Budgeting tips

In the Reddit budget forum, a thread in progress is about tips on reducing spending. The discussion is focused on tracking the budget using an app. Check out the overspending elements and curb them as much as possible.

Reddit personal finance flowchart

Under the Indiainvestments forum, you can get the Reddit personal finance flowchart. It shows the steps for maintaining personal finance like budgeting, emergency fund, insurance and setting of goals for future savings, expenses and investments.

Tips on how to make money online

Coming to tips on how to make money online on Reddit, here is an interesting thread in the subreddit for personal finance. The topic on how to make money on Reddit focuses on Real ways to make extra cash online at home. The thread suggests for part-time jobs, type of jobs to be taken up and so on.

Reddit refinance discussion

In the personal finance forum for Reddit, refinance is a discussion element. One of the threads on it focuses on What does refinancing mean and how it is useful. You can understand the concept of refinancing and its different aspects.

Passive income ideas Reddit

One of the passive income ideas Reddit forum provides is on – “How do I create passive income with no particular skills?” Here you can get recommendations on how to gain passive income in areas related to your talent or skill.

Also read: Tax Consultant

Pros and cons of Personal finance subreddits

Personal finance subreddits may be financial advisor Reddit, wholesaling real estate Reddit, banking reddit and many more. They help a lot in understanding the concept of personal finance and guidance on any issues or problems encountered.

But you need to be cautious while deciding on which advice or recommendation to accept. Any kind of wrong decision may result in financial loss. The forums are for advisory purposes not as legal help.

Kuntala Banerjee

How much money should I save before buying a house? | A financial guide

Finance

Planning on buying a house soon? If you are stuck wondering – how much money I should save before buying a house – worry no more! This post will help you decide.

How much money should I save before buying a house

First time buyers of a house stay in a dilemma of how much money should they save to overcome any financial hurdles. Well, theoretically, you need to ensure you have 20 to 25% of the total house value for a down payment.

Minimum requirements for buying a house

There are some minimum requirements for buying a house, which you must be aware of. This is essential mostly for first time buyers who are applying for a home loan.

Credit Score – Loans demand a minimum credit score
Steady income – You need to have a steady income from an organization
Savings – for down payment and any closing costs that are applicable
Debt – Minimum existing debt to opt for higher qualifying loan amount

Also read: 25 Essential questions to ask a financial advisor | Know your advisor

How much will a bank loan me for a house?

As per the mortgage rule of thumb and an answer to the question on, How much will a bank loan me for a house?

The response is, you can receive 80% of the total value while 20% is to be paid as a down payment by the buyer.

When is the best time to buy a house?

Thinking of when is the best time to buy a house, the ideal time is during late summer or early fall. There is comparatively less competition at this time of the year, but still lot of houses are available to purchase in the market.

How to save for a house?

Here are some tips on how to save for a house, before focusing on how much money should I save before buying a house.

The best way to save for a house is to start with a small savings. Calculate the probable down payment amount, and the number of months you have.
If you are thinking of how to save for a house in 2 years, invest in instruments that generate profits and help to grow money
As a rule of thumb for buying a house, go for a Systematic Investment Plan or SIP. You can earn as per the market valuation and control the expenses
Better to keep your savings in a high yield savings account when you think how much to save for a house
Try for a subsidy scheme for managing the monthly instalments, a way in how to save money for a house in 6 months

Also read: Estate planning attorney | Things known before hiring an estate planning attorney

How much should I save for a house?

Now when we understand the need and tips for saving money for a house, let us focus on the question, how much should I save for a house?

1. How much does a house cost

First and foremost you must know how much does a house cost or how much does it cost to buy a house, can be any kind. If you are thinking how to afford a million dollar home, then as per experts recommendation, you need to have an annual income of USD 100K to USD 225K in a year. Answering to how much does a townhouse cost, it varies between USD 100K to 220K. And that of how much does a condo cost, it is almost USD 289K.

2. Cash to close vs closing costs

Cash to close vs closing costs are an important concept to remember.

What is cash to close?

It is the fees paid to the mortgage company for loan closure. You can use a cash to close calculator for determining the amount, but typically it is 2% to 5% of the home value.

And on how to save on closing costs or if you are thinking of what if I can’t afford closing costs. You need to remember closing costs range between 3% to 6% of the home value.

3. Average down payment on a house

Next important point is to be aware of the average down payment on a house.

Some examples:

How much downpayment for a condo? Its almost 3 to 20% of the home’s purchase price.

How much down payment for a house in NY? The minimum down payment amount is almost USD 8750.

The down payment for 200K house is almost USD 10K
The down payment for 500K house is almost USD 25K
The down payment for 250K house is almost USD 12K

4. When do you pay closing costs and downpayment

It is important to understand when do you pay closing costs and downpayments. Well to answer the question, Is down payment included in closing costs?

The answer is closing costs are paid only at the time of closing the purchase deal of a house. But down payment is paid during the contract agreement and is due at closing. But both the amount can be paid together in a single check.

5. Buying a house expenses

While buying a house expenses are to be understood to find out how to save money for a house.

Here are the types of cost associated with buying a home:

The down payment
Closing costs
Reserves in the bank
Property taxes
Home maintenance
Home insurance
Utilities charges
Mortgage payments and insurance

6. Do you need a realtor to buy a house

Do you need a realtor to buy a house? The answer is, the cheapest way to buy a house is to avoid any realtor or real estate agent. But if you do not want to invest time on the formalities and negotiations, then you need to save some money for hiring a realtor. Real estate agents normally charge 6% commission, charged on the sale price of the home.

7. Credit score to buy a house 2022

What is the credit score to buy a house 2022?

The ideal credit score to buy a house varies according to the type of loan:

620 for conventional loan
580 for FHA loan
620 for USDA loan
580 for VA loan
680 for Jumbo loan

The credit score requirements also vary for different states in the US. For example the credit to buy a house in Florida is 620 whereas in Chicago it is 580.

8. Buying a house with no money down

There are ways for buying a house with no money down, a decisive factor for the question on how much money should I save before buying a house.

A down payment gift from a family member or acquaintance
Apply for a zero-down USDA or VA loan
Pay the down payment via the down payment assistance
Seller to pay the closing costs via seller concessions or lender to pay the closing costs via lender credits

9. Buying a house with cash

Are you thinking of buying a house with cash?

Buying a house with cash process has both its pros and cons. When you are paying cash for a house, the closing process is faster. But you will miss the mortgage tax deductions.

How to buy a home with cash?

Here are some of the paying cash for a house tips for you to consider:

Ensure the cash is in place be it from savings, investments or any other assets
Proof from the bank that you have cash in hand
Start searching for the house

10. Income needed for 300k mortgage

Several questions come up, I make 25K a year can I buy a house? I make 30K a year can I buy a house?

Well anyone can buy a house but the annual income needed for 300K mortgage is almost USD 75K; considering USD 10K as a down payment and 4.5% interest rate for 30 years.

11. What are prepaid costs when buying a home

What are prepaid costs when buying a home and how are they calculated?

Well, prepaid costs commonly include the property taxes, the mortgage interest and the insurance premium of the homeowner.

Also read: Real Estate Consultant

12. Mortgage should be what percent of income

What percent of your income should go to mortgage?

Well to answer, mortgage should be what percent of income, you must follow the 28/36 rule. Mortgage payment should not be greater than 28% of monthly pre-tax income and 36% of the total debt.

How many houses do people look at before buying

As per the statistics, data and analysis conducted by the National Association of Realtors in the US, the answer to the question on how many houses do people look at before buying. The answer is at least 10 before finalizing an offer.

How to buy houses with no money

Thinking of how to buy houses with no money. The smart answer is to avail home loans or mortgage. Even the down payment can be arranged by looking for loan against securities, shares, insurance policies etc.

Kuntala Banerjee

Career change at 40 | Detailed guide on how to switch your career in your 40s

Career

Are you or someone you know thinking of making a career change at 40? Here’s all you need to know about how to make the shift as well as succed.

Career change at 40

Career shift or changes in the life of professionals is common. While it is not so risky at a young age, career change at 40 can be a little challenging. But with proper plan and action, it can be smooth and easy.

In this article, we will discuss the best ways of switching careers and the best careers to start at 40.

Also read: Career Gaps | 10 Best ways to explain gaps in your resume effectively!

Why changing careers at 40 is a good idea?

Changing careers at 40 will help to overcome the feeing of uncertainty and stagnancy in the professional life of individuals. You can strengthen your network, and who knows may start a business or firm of your own.

You maybe thinking is it too late to change careers at 40? Well the answer is No. Choosing a new career is not age centric. So career change at 40 is not a hindrance but a possibility to explore new roles and responsibilities.

How to change careers at 40?

In this section we will discuss on how to change careers at 40 or how to switch careers at 40.

First foremost you need to understand and analyze the various career opportunities and select “which career is for me”. Secondly, you need to check if you possess or can acquire new skills if you want to transition to new job. Midlife career change is not unusual but needs thorough analysis of your skills, finances and risks to be undertaken.

Now the next question is how to find a new career or how to pick a career. Education and passion are the two important aspects that drive the decision. Career changes at 4o demands upskilling and invest time to sync with the new career.

Also read: Career affirmations | What are career affirmations and 25 famous examples!

Best careers to start at 40

You must now be wondering on which are the best careers to start at 40. In the subsequent sub-sections we will discuss in details on the best career change jobs and the most rewarding jobs, you can opt for.

1. Start event planning if you are feeling lost in your 40s

If you are feeling lost in your 40s and is experiencing career burnout at 40, event planning is a good opportunity. Even if you are starting over at 45, it is a perfect way to excel. With an average salary of almost USD 41K per year, event planning needs you to be proficient in hospitality and related fields.

2. Be a medical administrative assistant if you are starting over at 40

If you are starting over at 40 or looking for a career change at 40, medical administrative assistant can be an ideal option for you. So that will be a good answer for the question on what is the best career to start at 40. You need to efficient in customer service activities and develop the skills if you are starting over at 45 with nothing or starting over at 40 with no money.

3. Translator is one of the most satisfying jobs

One of the most satisfying jobs at 40 is to be a translator. With a salary of approximately INR 46K per year, translator is a versatile career and is the most exciting job one can pursue. You need to grasp the knowledge and fluency on the language you want to focus on.

4. Jobs for 40 year olds with no qualifications

What are the best jobs with no experience or job for 40 year olds with no qualifications?

If you are opting for finding a job after 40 or you want to change career at 40 with no experience, the options available are of a security guard, sales executive, bartender, or a delivery driver

5. Ideas for new careers at 45

What are the ideas for new careers at 45 or 40?

Here are some of the career change at 40 ideas or 45 ideas – dental assistant, personal trainer, patient care technician, cosmetogolist, or medical insurance billing and coding specialist.

Also read: How to find the best remote medical coding jobs in 2021?

6. Careers for women

The best careers for women or high paying careers for women include online teaching, freelance writer, virtual assistant, graphic artist and illustrator, yoga instructor, and accountant. Life coaching jobs are also one of the top careers for women or fun jobs for women.

7. Career ideas for men

One of the interesting career ideas for men is to be a SEO specialist. Devising strategies for increasing search ranking of websites through content optimization and usage of keywords is one of the key responsibilities; perfect for life after 40 for a man.

8. Easy career changes that pay well

Listing down the easy career changes that pay well when you are 40 or above are personal financial advisor, medical assistant, energy auditor, accountant and financial manager and marketing representative. So if you looking for a best second career and need a new job, then these are good options.

9. Personal care aide as a second career

As a second career, personal care aide is a good option. Its about helping patients or old people in performing their daily chores like shopping, household activities etc. Its one of the popular 2nd jobs ideas or second career ideas at 40.

10. Best jobs to get without a degree

The best jobs to get without a degree are home health aide, wind turbine technician, massage therapist, landscaper and groundkeeper, nail technician and dental assistant. So if you are looking for new career opportunities, then these are the good options for you.

Also read: 25 Highest paying remote jobs in 2021 | Best work from home jobs

11. Restaurant cook as one of the best midlife career changes

One of the best midlife career changes is to become a restaurant cook. You need to undertake cooking lessons to gain expertise. For a midlife career change, this is a very good option and especially if you have a passion for cooking.

12. Going back to school at 40 best careers

Here are some of the going back to school at 40 best careers – registered nurse, medical administrative assistant, and physical therapist. If you are planning for reinventing yourself at 40 and thinking of what can I study after 40, then you can try for a software or a web developer. These are things to do when you’re 40 and single or if you have planned for going to college at 40.

13. Second careers for accountants

Second careers for accountants can be financial journalist, banker, Federal financial investigator, finance professor, financial planner, financial analyst, business analyst, financial controller, and finance and insurance manager. All are respectable roles with good salaries.

14. Best IT careers

Which IT career is right for me?

The best IT careers to opt for at 40 are – software developer, IT manager, information security analyst, data scientist, database administrator, and computer systems analyst. IT jobs will continue to flourish even in future so a good option to pursue.

Also read: Remote IT Jobs | How-to guide to start a fascinating IT career?

15. Career change to administrative assistant

If you are opting for a career change to administrative assistant, then you can opt for being an assistant manager, human resources coordinator, executive secretary, accounting clerk, sales associate, customer service representative, office manager, and many more.

Which career is for me

If you are thinking which career is for me, then there are plenty of opportunities to try out at 40. Check out your skills, your passions, educational qualifications and the areas where you are interested to gain knowledge. You can also consult a career counsellor to gain a better perspective on what’s the best career for you.

How to figure out what you want

How to figure out what you want in your career change at 40?

Best is to perform self assessment of your skills. Check back your work history. Try to find out if you are able to grasp the knowledge on other areas. Attend some training programs or learning courses. Then you can decide, “what should I do with my career”.

Best careers for the next ten years

The best careers for the next ten years are solar photovoltaic installers, information security analysts, statisticians, home health aides, medical assistants, personal care aides, occupational therapy assistants, nurse practitioners, translators, software developers and health specialties. The salaries are also quite reasonable and can be adopted by professionals even after the age of 40 years and above.

Best certifications for remote jobs

The best certifications for remote jobs are professionals certificates on computer programming, accounting and taxation, UI and graphic design, translation and interpretation, communication design, copyediting, online teaching and technical writer. These certifications will help in finding out jobs that can be executed from home remotely at ease. You need a good communication device and fast internet connection for performing remote jobs.

Kuntala Banerjee

Career Gaps – 10 Best ways to explain gaps in your resume effectively!

Education

If you want to make sure you communicate the right message about your career gap, this is the article for you. Let’s deep dive into what are career gaps & how to explain them.

What are employment gaps or career gaps?

Career gaps are the time period when a person is not associated with any organization after leaving the prior company. The gaps may be due to study, medical reasons or a break from the professional world. They may sometimes be lengthy from 6 months to 1 year and sometimes less.

In this article, we will learn what is an employment gap, how to explain employment gaps in your resume effectively, resume examples with gaps in employment, cover letter for a gap in employment or letter of explanation for the gap in employment.

Also read: Career counseling | Why career counseling is important & 15 types of career coaches

What is a career gap?

In the professional profile of a person, a career gap is the employment gap when an associate is not linked or hired into any organization. The duration of the gap can be a few weeks, months or years. It is mandatory to mention career gaps in your resume. The critical part is to explain gaps in employment to the next recruiting organization.

How common are gaps in employment among professionals?

Gaps in employment are not uncommon. Certain professionals consider career gaps as an opportunity to revisit the skill sets and find out ways to build up new competencies. Work-life balance is now the new concept among professionals. A person can think of studying in between job shifts which he or she may find it tough to pursue while being employed full time.

Many opt for such gaps to travel around the world, a break from the busy professional environment. Some may concentrate on health and medical issues and well-being before joining another profession or job.

Also read: Career Change | 8 step process for the best career moves across any vertical

Why some companies are concerned about resume gaps?

Hiring companies need to understand the resume gaps to find out the genuine interest of the individuals towards the job. They try to find out the reason for career gaps of whether a person has been on bench due to incompetencies or whether the gap is to jack up the skills. Their objective is to recruit the right people for the role they are looking for. Therefore they would scrutinize any resume gaps to extract the correct reason. It helps them to judge the potential and capability of the person applying for the position.

Top reasons why employment gaps occur

In this section, we will find out the top reasons for employment gaps. There are many good reasons for gaps in employment and some may last for many months to years. But these are not unnatural and can occur to any one. Let us discuss those career gaps in the subsequent sub-sections.

1. Employment gap on resume for pursuing higher education

Employment gap on resume can happen if one plans to pursue higher education. Certain academic degrees of qualifications are difficult to continue while being involved in full-time jobs. Hence a break is needed for focused dedication and attention. Higher education is also done for facilitating better roles in the next jobs.

2. Gaps in resumes for medical reasons

Medical reasons are often a major contributor to gaps in resumes. A person with an ill-health may fail to perform well in his or her job in a company. Constant work pressure may also prevent undergoing medical treatments. Hence professionals are sometimes forced to go for a break.

3. Gap in employment to care for a child

Caring for a child is another very common reason for gap in employment. It is essentially the work-life balance that one needs while nurturing a newborn baby or a toddler. This gap normally happens with a woman professional after child birth.

Also read: Working from home with kids | Parent’s guide to remote working

4. Unemployment gap for travel

Travel rejuvenates and energizes minds. So there are professionals who opt for an unemployment gap to explore travel destinations; a way to enjoy a break from the regular professional and personal life.

5. Take time off between jobs for freelancing

People working in the fixed boundaries of jobs often feel the monotony. So it’s good to take time off between jobs and do some freelancing activities. These open the horizons of exploring the different genres of work and gain more exposure.

6. Work gap to undergo professional training

Work gap is sometimes essential to undergo any professional training which lasts for a long duration in multiple courses. It helps in greater concentration and dedicated focus, ultimately gain in pursuing future ambitions and growth opportunities.

7. Gap in resume due to depression

A person may undergo any mental ailments which result in depression. Treatments and cures are needed to overcome it. Hence he or she decides for a break in job and thus a gap in resume. The gap is essential for a complete cure.

8. Gap furlough

Gap furlough can happen due to a temporary economic condition prevailing in a region forcing companies to operate under low wages and interim leaves. Employees may undergo such a situation and that may lead to a gap in the resume.

Also read: How to start a business with no money and make it super successful in 3 years?

9. Gaps in resume for relocation

Digital nomads or professionals looking to relocate to a new city or country often opt for a gap in their career to find out the relevant choices and arrangements. Thus gaps in resume is common for them, usually leading to 4 to 6 months duration.

10. Work gaps due to family care

Sometimes there are medical emergencies in the family for which people need to take an off from a job and concentrate on the same. Work gaps are hence needed to ensure continuous care and attention to the members of the family.

How to explain gaps in employment?

Now that we have understood the various reasons for career gaps, the next question that comes up in mind is, how to explain gaps in employment?

In this section, we will point out the various ways to explain any gaps in employment.

1. Resume fillers with certifications and training courses

The best way on how to explain gaps in resume is to create resume fillers. Enter the certifications and training courses attended during the gaps. This will ensure that you were not sitting idle but elevating yourself for progression.

2. Employment gap for gaining experience

Another best way to explain employment gap is to specify the experience gathered during the time to enhance professional efficiency. This is one of the interesting how to explain employment gaps examples; ensuring you did not spend time in leisure.

3. Omit small gap work

If you have a small gap work then it is better to omit that. The recruiters will not realize or pay attention to such minor breaks. Gap cover-ups for negligible durations are acceptable and will not act as a hindrance for being recruited in the next job.

Also read: Best resume software | Give the finest first impression

4. Employment gaps on resume to be mentioned in brief

Whenever you mention employment gaps on your resume, you must keep it brief. The gap explanation can be mentioned during the interview. As your focus must be on your skillset and experience and not on how to explain a lengthy employment gap. The more you speak it out the better.

5. Use resume format to conceal gap employment

A good idea on how to fill in employment gaps on resume is to use a unique resume format. Ensure the format has sections where you can highlight your accomplishments and experiences. The recruiters will look into those sections first and can gain a good understanding of your professional background, and may heedless attention to gap employment.

6. List down the reasons for careers gap

For the career gap, list down the exact reasons and explain the same to the recruiters. Your reasons must be convincing, not de-focusing on future growth or opportunity. It is recommended to emphasize on the work or activities done during that tenure.

7. Be honest in explaining gaps in employment

Be honest and truthful while explaining gaps in employment. There may be an employment gap due to personal reasons, medical emergencies, academics, health issues and many more. But you must state the reasons briefly and clearly to leave out no ambiguities.

8. Explain unemployment gaps but focus back to the interview

It is crucial that you explain unemployment gaps but try to deviate back to the interview. Express your interest for the job and the role. Relate the same to your skillset and experience. Showcase your knowledge to earn the interest of the recruiters.

9. Add freelancing experience in the job gap

In the job gap, add freelancing experience to the resume, if you have any. You can also speak about the freelancing experience to emphasize that your focus is steady on your career, ambitions and growth. You must know how to list contract jobs on a resume taken up as a freelancer.

10. Employment gap explanation with interest and poise

Employment gap explanation must be done with poise. It is recommended to show interest while recruiters request you to please explain any gaps in employment. They will not prefer you to avoid or ignore the question. Remember there is no harm in career gaps.

Also read: Business Lawyer | How to find a business lawyer

11. Sample resume with gaps in employment

Let us now check a sample resume with gaps in employment:

“I resigned from my previous job to care for an ageing and ailing family member. Now I have hired a full-time attendant. I am available for full-time work and in the future.”

“I have quit from my current job to pursue my MBA. My course was for 1.5 years. Now I am back to work with much higher knowledge, competence and confidence; ready to take up new roles and job positions.”

“I had to relocate to New Jersey, US since my spouse shifted. I had to leave my present job for the relocation. Now since I am settled, I am looking for a new job to start with.”

For mentioning the duration, ensure to check how to right justify dates on the resume.

Sample unemployment letter of explanation

Here is a sample unemployment letter of explanation for your reference.

To whom it may concern,
I am writing this letter to explain the 4 month gap in my employment from July 2021 to October 2021. Recently there has been a serious medical emergency in my family. I had to take care of my ailing father. But now the situation has normalized and I have a full dedicated attendant for my father. I am now available full time for the role and the job”.

You can refer this sample cover letter explaining gap in employment and mention the reasons as appropriate.

Also read: John Maxwell’s 5 levels of leadership explained

Unemployment interview questions

Here are some unemployment interview questions for reference and unemployment phone interview tips:

Question: Please explain any gaps in employment
Answer: You need to specify the reasons, the duration and that you are ready for the next job and role.

Question: What have you been doing during the career gaps?
Answer: You must mention about any certifications, training courses, freelance jobs etc. which you have undertaken

Question: Have you been ever laid off by any company?
Answer: If the answer is Yes, then it is good to be honest about the reason but focus on your skill set and efficiency

How long is too long of an employment gap?

The answer for how long is too long of an employment gap is, potentially more than 6 months is considered as long. But sometimes the gap may extend to 1 year or more due to higher studies, relocation or even sabbatical leave for child care. But it’s, not the duration which is important, but the reason behind it. You must be able to justify that and ensure your experience and knowledge level are not hampered. Furthermore, you must know how to answer unemployment interview questions.

Kuntala Banerjee