Buying Tips

Analyze your finances.

Deciding what you can afford to spent begins with setting or reinforcing your financial goals.

How do you spend your money? Be honest. Take the time to track how you spend your money for at least a three-month period.

How much do you save? Most people save less than 5% of their money each year. Consider increasing this amount to more than 5%. Think about your long-term goals: real estate, business, education, and retirement.

How much fat can you trim? You'll need to accumulate enough money to make your down payment and closing cost. Reduce spending on non-ncessesities and pay down or refinance your consumer debts.

How much credit is good? Remember that borrowing for certain items is a wise use of credit. Think of borrowing for items like real estate, business, and education -- those items that will pay dividends as a result of your investment.

How can you spend less on taxes? Consider an employer-based retirement plan (e.g. 401(k) or 403(b)) or a self-employed plan (e.g. SEP-IRA or a Keogh). These are generally tax deductible and can save you money in both federal and state income taxes in the year for which contributions are made. And the money compounds over time without being taxed. This is just a start. Consider also tax-free money market funds and tax-free bonds; consider making capital gains long-term -- hold the investment for longer than a year; and itemize your deductions on Schedule A of Form 1040.

Are you insured? Before buying a home get the insursance you need to protect yourself and your major assets. Once you own a home, you'll need home owners insurance. But first, make sure you are covered with disability insurance, life insurance, and health insurance, wills, insurance on your automobiles, etc.

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