Money Sense Tips

Taking a vacation is supposed to help alleviate stress, not add to it. But for those of us who do not have unlimited funds to work with, it can do just that. Planning fun for the whole family and providing for transportation, meals and accommodations can be tricky, and paying for it all can be even trickier.

We all know how important it is to have a household budget. But we tend to forget about budgeting when it comes to vacations. If we can create a vacation budget and follow it closely, it can help us enjoy our getaway without worrying about money.

How Much Can You Afford to Spend?

In order for a vacation budget to work, we must first determine how much we can afford to spend. If you have money set aside in a vacation fund, this might be the easy part. But if you’re working with money from general savings or a tax refund, it will require some thought.

Spending every penny you have that isn’t required for bills on a vacation is not a good idea. Having an emergency fund is important for any family. If you already have plenty of money put away for emergencies and the bills are paid, using your tax refund for a trip isn’t such a bad thing. Otherwise, take care of the more important stuff before you allocate funds for vacationing.

If you just have a savings account but haven’t decided how you will use the money, resist the urge to spend it all on a vacation. Setting some money aside for a rainy day will do you a lot more good than hitting all of the hottest spots on your trip. The general rule is to have at least enough money put back to pay all of your expenses for at least three months. If you’re nowhere near that point, try to keep enough to at least have a good start toward that.

What to Include in Your Budget

Vacation expenses have a way of sneaking up on us. And that’s exactly why a budget is so important. It forces us to consider all possible expenses and account for them so that there are no surprises. Here are the basic expenses you’ll need to account for:

* Transportation – This could be airfare, bus, or train fare, or gas for a road trip. If you’re not taking your own vehicle, you’ll probably also need to rent a car when you reach your destination. And then there’s the gas you’ll use while you’re there.

* Accommodations – Unless you’re doing an at-home vacation or staying with a friend or relative, you’ll have to pay for a place to stay.

* Food – You have to eat while you’re on vacation. Some packages include a meal plan, but if yours doesn’t, you’ll need to budget for your meals. You can save money by taking your own food to prepare if you rent a place with a kitchen.

* Entertainment – This is a biggie. You have to pay to get in to the beach, amusement park, or whatever other attraction you’re visiting. But there may be times when you or other family members want to do something else, so be sure to account for that as well.

* Shopping – When most people go on vacation, they come home with souvenirs. So it’s important to set aside some money for them.

Money should not be a constant worry when you’re on vacation. It will be if you do not set a budget.  So, if you set a budget and stick to it, it doesn’t have to be.

In this current economic situation, one teething problem that is still ongoing is the housing foreclosure crisis. Foreclosures are raising every month, and experts expect that more and more homeowners will face this eventuality sooner rather than later.

If you currently hold a mortgage and are trying to find ways to reduce the monthly payments, here are some suggestions you may wish to utilize.

One way in which you can save on interest rates is by seller financing. This means that the payments are made directly to the seller and not the lender. The advantage cited is that “you can sometimes arrange a lower interest rate,” especially at this time when the value of homes have decreased and the seller has no other options. In addition, no private mortgage insurance is required.

However, it is very possible that the seller will ask for a shorter payment plan than the more traditional 30-year mortgage.

If you are a homeowner, you have undoubtedly heard of points. In some instances, you can offer to pay more points in order to garner a lower interest rate. Or, you can opt for a 15-year mortgage instead of a 30-year mortgage.

Another way you can save money is to pay off your mortgage sooner. Again, just like any debt, the more you pay the less interest you will owe.

Researching different mortgage lenders is the clearest route to finding the best mortgage for you. Depending upon your credit report and FICO score, you may be suitable for a low-interest fixed rate mortgage.

You will have to begin comparing and contrasting the various lenders, however. While some banks are still withholding money and not resuming their lending practices, there are others who may be willing to offer you a good interest rate based on your credit history.

Remember, too, that the reason banks are not lending is because of the sub-prime mortgage crisis. The money they received from the Treasury is being held in abeyance because the banks know that future foreclosures are on the horizon and they need whatever capital they have to prepare for that eventuality.

It is also important to stay away from any predatory lenders who offer you a mortgage rate that, for all intense and purposes, seems too good to be true. Recent news reports claim that these unscrupulous individuals are back in business and will try to trick you into using their services to obtain a low-cost mortgage.

Whether you purchase a new home or try to scale down your existing mortgage, it is vital that you speak with qualified, certified professionals who can offer you the best advice possible.