Life after VAT….

Life after VAT….

By now you have  heard about it. You know that ole dirty tax has increased, the name that I dare not repeat but no matter how much I try to avoid it come July 1st VAT will be here at an additional 4.5%.

Now this post is not about complaining. We are well passed this stage and while I have to admit my people are super creative because all of the videos (by the way have you seen this one?) and memes were definitely well worth the chuckle reality has set in and well it’s really no laughing matter.

Read the 2018 Budget Communication here.

I recently attended a budgeting seminar this week (perfect timing right), it was hosted by a banker. She was amazing,  been in the game for over 10 years but to be honest her approaches to me were not realistic and practical. I’m not a financial guru but most persons are already living paycheck to paycheck, saving is almost near impossible and well now we have more VAT to worry about.

Naturally as a mother of two I have already had my family on a strict budget. Living in one of the richest countries of the Caribbean isn’t so glamorous when minimum wage is $210.00 per week, the average rent is $700.00 and to get decent education and health care you have to spend exorbitant amounts of money.

Being an adult is hard

Being an adult with kids is hard

Being an adult with kids in The Bahamas is harder

You have to consider so many things like:

Food

Life Insurance

Car Insurance

Car maintenance

House Insurance

Medical Insurance

Pension

School Fees

Mortgage

Utilities

and if you somehow manage to crawl out of your deep hole of debt maybe just maybe a vacation!

(Did I forget anything???)

From the first introduction of Value Added Tax years ago I’ve done some major and minor budgeting that may just be able to help someone out there.

Monitor your Grocery shopping habits. A few simple ways to do this is by creating a meal plan, creating a grocery list and sticking to it when going shopping and don’t shop while hungry.

Meal planning goes hand in hand with the grocery list. Really, if you know what you plan to cook for the entire week then you know what you need to buy. This also eliminates additional stops to the grocery store which can also cause unnecessary expenditures.

The last part seems funny but study shows that when persons shop while hungry they tend to pick up more stuff out side of the grocery list based on hunger. I’ve seen this happen personally with myself so I 100% agree. Also if you can, leave the kids at home. They always want something additional that you more than likely did not budget for but for your sanity just put the coco puffs in the trolley!

You can also look at paying your bills weekly. Now of course this can be tricky for those who get paid bi weekly or even monthly and I would imagine there would be some adjustments to this given that knowledge. However, I found that it is easier for a person to come up with $20 weekly for a $100 bill verse the entire $100 one time. The whole idea is to eliminate large payments.

Now pause, I know what you are thinking, who has time to go in BEC or Cable Bahamas every week with $20. Got it and noted. This can work two ways. If you bank online  you can take advantage of the automated features and schedule your bill payment every week. Almost all of the major banks have this option online however I would encourage you to visit your local branch if you have any further questions about this.

Another option is to simple buy some mason jars (some nice ones can be found in Kelly’s, AID or Xtra Value) label them for each bill and put the money away every week.

Pic courtesy of Readers Digest

This will definitely require some discipline. You don’t want to touch the money until time to actually pay your bill and physically having it in sight can be tempting.

Another trick I’ve also used that comes in handy for my daughters lunch money is saving all of the dollar bills I receive as change and putting it away in the jar. As she needs funds for lunch every day I just go in the jar and I readily have it available and broken down in smaller notes for her convenience.

Of course there are many other tips and tricks. For example I pay my mortgage every 2 weeks verses every month which ties into the point I made above. Not only am I avoiding a bulk payment but I am also paying down on the principle faster.

There is always cutting back on fast food purchases, expensive outings, reducing use of electricity and water use at home etc.

Lastly, keep track of your spending. I’ll be the first to admit I can definitely splurge a bit here and there and before I know if poof my money is gone. For the month of June I plan to keep track of every dime I spend to see if I am spending on more wants than needs and if I need to cut back just a little bit more.

With the upcoming changes in just a few shorts week every little bit helps.

Do you have any saving tips you want to share? Leave a comment below.

Until next time…

 

 

 

 

 

I Was Having a Hard Time Saving Until I Started Doing This…

I Was Having a Hard Time Saving Until I Started Doing This…

We all want to buy something at one stage in our lives or the other and while to some it might seem like a cake walk to others it maybe a huge purchase. Huge Purchases come with huge sacrifices and saving. Saving for a big purchase can be hard. Saving big in the Bahamas, even harder.  Whenever I wanted to go on a vacation, buy a new car, get that Mac Book pro or even plan my wedding,  I needed to revert to my old ways and start a saving process. If you’re dedicated this might be the route for you.

The Credit Union

Using the credit union was a huge savings booster for me. At the time the savings account I opted for offered 4% interest. Most banks only offer about 0.5% or maybe 1% if you are lucky, but 4% nah banks wouldn’t even think about that. Forego the ATM card so you won’t be tempted to withdraw all the time. Anytime I thought about joining that long line to withdraw a few pennies I got discouraged! If you happen to work somewhere that offers salary deduction makes this part even easier.

Asues

Stay with me here. I know what you are thinking but not all asues are bad. If you can find a legit one then go for it. My strategy is to never stay in an asue longer than 3 months. in fact I have never received an asue drawer larger than $1,000.00. To me the shorter the better! I am not afraid of commitment but I am afraid of loosing my hard earn money and a short asue is my comfort zone. I re entered the same asue every 3 months for about a year while depositing my earnings in the credit union. Again win, win… you see the strategy here? Keep reading…

Saving Schemes

Another great way to save is to come up with a savings scheme. This one is real easy and can be as small or as big as you want. When you get change from your spending try saving all of your $1 bills or $5 bill or $20 bills. Go as high or as low as you want. At the end of the month deposit that money if you know you will be tempted to touch it!

Work More

Ok this one is difficult but if you have the extra time applying for a part time job can give you that extra cash you need. Or if possible stay back a few days at work during the week. Have a skill? Start using it! Do some hair or nails on the side, type that letter think of ways that you can generate some revenue. Think about your end goal, what ever that maybe and stick to it!

Cut Back Expenses

Easier said than done when bills aren’t getting any lower but when you finally see that light at the end of the tunnel you will thank yourself. If you’re a person that goes out often CUT BACK. Like to get your hair and nails done, CUT BACK. If you purchase  lunch every day oh and Starbucks (OK maybe not the Starbucks) two words here CUT BACK. Use the three day rule on this one, if you want something wait until 3 days and then let’s see how bad you want it now, do you even remember what it was? Exactly! Cut Back on impulse buying. You can do it!

Savings won’t be accumulated over night and it will take time, there may even be some set backs along the way but the key here is to stay focus, stay dedicated and please, please don’t dip into that money.

So how do you save your money?

Till Next Time

 

 

 

 

Quick Guide: Buying A Home

Quick Guide: Buying A Home

I always get asked about the process I went through when buying a home. To be honest I was completely and utterly lost. There was no where to go and research and aside from asking a few questions here and there I was still in the dark.

Not really my home but still pretty nice right?

Eventually there was a light at the end of the tunnel, though it took me quite a while to see that light. I would spend days googling and calling friends whom I knew were home owners grasping for information only to get sub par info.

Firstly let me say buying a home in the Bahamas is expensive! Property prices are ridiculously sky high, Contractors are out of this world and turn key homes are even higher.

Sorry, I just had to say it. Now that we got that out of the way, here we go. I went through these steps, in no particular order which resulted in me owning a home. That’s not to say these are hard and fastened rules but it can help those who are feeling uncertain about this process.

  1. Get pre – approved – I was lucky to have a dad who was very vested in making his children into homeowners.  He made me go to the bank in my early 20’s and get pre approved. It was painless really. Just went in disclosed my employment history including my salary at the time and they were able to gauge what home I could possibly afford. This step is very important when looking for a home. You really don’t want to waste your time or a realtors time by looking at something you can’t afford. So pick a lending institution of your choice and get pre approved. It would be years later that I would actually buy a house but by completing this step I was more guided in what I was looking for. This image is actually from a local bank.

    Fee Evaluation and Pre Approval Process
  2. Have a JOB – Unfortunately I don’t know how this would work for entrepreneurs and self employed but I’d imagine having money and proof of a steady income for a certain length of time should work fine. It helps if you’ve been working for 3 years or more. Lenders love stability and a job lets them know where your payments will be coming from.

  3. Gather Documents- Your preferred Lender should have a list of documents you need and the criteria required to submit them. For example your passport may need to be current and the Appraisal may need to be no more than 2 years old.Documents normally include your job letter, bank statements including history of current loans and/or credit cards, passport copies, NIB copies, Sales Agreement, Appraisals and Bank’s Application. You would also need to have Life Insurance and Home Owners Insurance but this would be required later down in the process.

  4. Search for a Legal Representative – During my search I read some articles where this side of things can be done by the seller and/or buyer, in the US. I was hoping to skimp on the fees on this part but apparently it definitely does not work that way in the Bahamas.  A legal representative would have to be in the mix of things for both the seller and buyer. I’d start shopping around for a legal representative and compare rates. This criteria may also be guided by your lender as there are a list of attorneys/legal representative that banks choose to work with.

  5. Search for Lending Institutions – This part is equally as important as choosing the right legal representative. Most persons are stuck with 20-30 year mortgage and that’s a pretty long time. Too long to be stuck with high interest rates and poor service. While to me Peter isn’t better than Paul given the selection that we have, there are a few that offer low down payment requirements and low interest rates. It is important to do your research. Find out if the rates are fixed or variable. There are other places that finance homes besides the banks. Insurance companies such Family Guardian, Colina and BAF are also getting into this. There’s also the Mortgage Corporation and Sunshine Insurance. Explore your options and compare!

Ok, now you are ready to go house shopping. There’s lots of ways to go about this. Whether you choose to use a realtor, visit various lenders to get a listing of repossessed homes or just by searching the new paper and other various forms of advertisement, take your time, look carefully and compare. This will be one of the biggest purchases you will ever make and should be approached with caution.

Once you’ve found the home of your dreams you’re now ready to begin the legal process and do what they consider “closing” on your home. So here’s what to expect..

  1. Deposit, Deposit, Deposit- My first step was to secure my deposit with the lawyer of my choice. From what I understand you can also give the deposit directly to the seller’s attorney. This shows that you are serious and secures your spot for your future home. The more money down the better. This will lessen the life of your loan and also help to make your mortgage payments much smaller.

  2. Sales agreement – Once my deposit was confirmed a Sales Agreement was drawn up and presented to my lawyer who reviewed it to make sure the terms and conditions were up to my satisfaction. Please read and ask your lawyer for guidance on this part. You don’t want to make a huge and expensive mistake! Once this was approved, all the fancy signatures was attached and returned to seller. The work now begins.

  3. Lending Institution – After doing all my research I returned to the lending institution of my choice with all my documents on hand. They in turn will do some background check, evaluate your credit ratio (similar to a credit score) this involves comparing your salary with your loans (if you have any) and the proposed mortgage loan, basically this tells you if you are getting the loan or not. This takes some time and can vary from lender. Once you get the green light they call you with the great news! Here is where you fork over some more money. Lender fees and more fees. The amount really depends on your lender as I’ve seen variables in this area. A percentage of the cost of your loan will determine this factor.

  4. Title Search – You better get yourself a good damn lawyer to do this! You don’t want to end up like that Arawak Homes fiasco where years later they tore down a church because of title issues. This is a very serious matter and too expensive to have a mistake like above. This takes some time and really doesn’t require any work from your end, your lawyer will be handling this part of the process.

  5. More Blood Money – Once your background check is cleared the lawyer notifies your lender. Here is where I needed to provide copies of my home insurance certificate and also my life insurance certificate. My life insurance not only needed to cover the value of my home but it also needed to be documented that in the event of untimely death my lender would be fully paid. Additional paper work is processed on the lenders end and once completed a check is sent to the seller via legal representative.

    Dollar Dollar Bills Yall!!

     

  6. Keys, Keys, Keys – Ultimately you get your keys at the end of this process. Although its not so clean cut. I waited quite a bit even after the seller received a check for my keys. I needed utility bills to be paid off, which the seller handled, so that I could move in and settle with no issues.

Overall the process can be as short as 3 months or as long as a year. It really just depends on so many variables with your Lender, your Lawyer and the Seller and you.

To me it feels awesome being a home owner and while I read articles all the time that down play home ownership and even encourage millennial’s’ to not buy a home, I say to each it’s own.

Till next time…