Selling a home typically involves several steps, including:
Preparing the home: Before putting the home on the market, it’s important to prepare it for sale. This may involve making repairs, decluttering, and staging the home to make it more attractive to potential buyers.
Setting the price: Determining the right price for the home is an important part of the selling process. This may involve working with a real estate agent to analyze market trends and comparable sales in the area.
Marketing the home: Once the home is ready for sale, it’s important to market it effectively to potential buyers. This may involve listing the home on popular real estate websites, creating professional photos and videos, and hosting open houses.
Receiving offers and negotiating: As potential buyers express interest in the home, they will typically make offers that will need to be negotiated with the seller. This may involve working with a real estate agent or attorney to ensure that the terms of the sale are favorable to the seller.
Closing the sale: Once an offer is accepted, the sale will need to be finalized through a closing process. This typically involves working with a title company and other professionals to transfer ownership of the home and finalize the sale.
Selling a home can be a complex and emotional process, and it’s important to work with experienced professionals, such as a real estate agent or attorney, to ensure a successful transaction. With careful planning and preparation, homeowners can successfully sell their homes and move on to the next chapter of their lives.
As we head into the hottest weeks of the year, New Jersey’s active housing market is apparently in the middle of a cool-down, and that could result in good news for folks who are interested in entering the market for a home.
According to the latest report from New Jersey Realtors, which covers home sales through May 2022, buyer activity is slowing as a result of high home prices and a surge in mortgage interest rates.
And, due to more inventory on the market, sellers aren’t seeing a deluge of wannabe buyers like they would have just a few months ago.
A continued softening of the market could put downward pressure on home prices.
“We’re now not seeing 20 to 25 offers on any given property, and we’re now not seeing offer prices going $40,000 to $100,000 over the suggested list price in certain markets,” said Robert White, president of New Jersey Realtors. “What we are seeing is five to 12 offers on any given property in certain markets, and $20,000 to $50,000 over that asking price.”
Sellers are still in the driver’s seat before and during a transaction, but they may not have as much power as they did one year or one season ago.
Compared to one year prior, according to the report, closed sales on single-family homes were down 8.7% in May 2022, and down 7.9% for all properties. The median sales price for single-family homes was $490,000, up 12.6% from 12 months prior.
The number of homes for sale today is significantly down compared to a year ago, but inventory has been growing recently on a month-to-month basis.
“We are going to continue seeing increasing inventory in all markets,” White said.
Mortgage interest rates are more than 2.5 points higher today than a year ago. This would logically push more buyers out of the market, particularly those who are first-time buyers, but that hasn’t been the case as of yet.
“They may not be pounding the pavement every day, but they’re still on top of the inventory coming in, and if something catches them, they’re on top it,” White said.
White noted that July and August are typically slow months for the housing market during any year.
Rising rates equate to higher monthly payments and a larger payout overall for buyers, but a calmer market would mean their purchase price may be lower than what it would have been months ago.
White expects rates to dip significantly in the first quarter of 2023.
2021 NJ property taxes: See how your town compares
Find your municipality in this alphabetical list to see how its average property tax bill for 2021 compares to others. You can also see how much the average bill changed from 2020. For an interactive map version, click here. And for the full analysis by New Jersey 101.5, read this story.
How to get from Monmouth/Ocean to the Holland Tunnel without paying tolls
Sometimes even your GPS doesn’t know the back way to certain places.
Well, that didn’t take long. CentralJersey.com is reporting that Mastoris Diner, on Route 130 in Bordentown will become an upscale restaurant.
The article states the investment group that owns Mastoris, the Foggia Restaurant LLC, will be renovating the iconic diner and reopening it as an Italian steakhouse under a new name.
The renovation will be a big one, as they plan to redo the entire building and outside terrace. If all goes well, it will be completed by the end of the summer.
The banquet hall and parking lot will also be remodeled to turn it into a space attached to the new steakhouse for private events…weddings, bridal and baby showers, and other parties.
Many will always remember that space as the best diner around, with fresh baked, legendary cinnamon and cheese bread.
The announcement that Mastoris would closed for good shocked many a few weeks ago. Click here for all those details.
Here Are Some Restaurants You Wish Were Still Open
Are there any restaurants in the area that you really miss and would like to have back again? We are sure that you can think of many.
We want to take you down memory lane and perhaps remind you of some restaurants that are no longer around but will still bring you back some memories. The crazy part of this is that some of these restaurants were around during World War II.
LOOK: Things from the year you were born that don’t exist anymore
The iconic (and at times silly) toys, technologies, and electronics have been usurped since their grand entrance, either by advances in technology or breakthroughs in common sense. See how many things on this list trigger childhood memories—and which ones were here and gone so fast you missed them entirely.
Living is expensive. Especially if you live in New Jersey right now.
Over the past few years, renters across the U.S. have experienced staggering increases in rent. But if you take a look at the numbers at just how much they’ve increased, it’s pretty mind boggling.
Stressed workers reading company bankruptcy news online
Getty Images
Rent.com just calculated a list of “The 100 cities with the highest rent in the U.S” The data was pulled from their multifamily rental property inventory for one and two-bedroom apartments, between June 2022 and June 2021, excluding cities with populations of less than 50,000. Their study found that the cities with the highest rent prices are near major technology hubs.
And guess what? New Jersey appeared twice in the Top 10. Yay.
It gets even worse. A New Jersey city is at the top of the list at #1. Which city, you ask?
Jersey City
Photo by Tomas Martinez on Unsplash
Photo by Tomas Martinez on Unsplash
Hats off to you if you’re making ends meet renting in Jersey City. You’re paying the highest rent in the country right now. The average monthly rent in in Jersey City has jumped from $3,308 in 2021 to $5,500 in 2022. Which is a whopping 66.25% increase.in just a year’s time!
Hoboken NJ
If you’re living in Hoboken, you’re also paying some of the highest rent prices in the country. With Hoboken, New Jersey has two cities in the Top 10 of this list. Hoboken comes in at #7 with an average monthly rent of $4,264, which is a 21.46% increase from June 2021.
Yeah, I’ll hang onto my <$2,000 rent for my South Jersey apartment. But as a New Jerseyan, this has me clutching my pearls!
Have you noticed trends like this happening in your city?
LOOK: Here is the richest town in each state
Just saying the names of these towns immediately conjures up images of grand mansions, luxury cars, and ritzy restaurants. Read on to see which town in your home state took the title of the richest location and which place had the highest median income in the country. Who knows—your hometown might even be on this list.
Here is the Most Expensive Apartment in Princeton NJ
Note that this is the most expensive apartment in Princeton NJ advertised by Apartments.com as of early May 2022.
I was surprised to hear the news that a popular hair salon in the Princeton area has closed its doors for good.
After hearing some rumors, I did a quick search and found out that yes indeed Cherry Blow Dry Bar Princeton is listed as Permanently Closed.
The salon was located in the Nassau Park shopping area, off of Route 1 and Quakerbridge Road, technically in West Windsor township, on the corner near Butterfly Nails, Party City, and the new Crumbl Cookies.
You could get your hair cut and blown out there as well as other add-on services like a scalp mass, braids, conditioning treatments, extensions, and more.
Memberships were also offered. There were month-to-month and yearly packages available. All of those are still available at the other nearby locations.
If you’re a fan of Cherry Blow Dry Bar, don’t worry, there are other locations not too far away in Marlton, Cherry Hill, Deptford, Glassboro and Wall Township.
No word on what will be talking over that space.
The Nassau Park Shopping Center seems to be having a problem keeping some of the stores filled, but, are also building additional spaces.
I did notice when I went to HomeGoods the other day that there’s new fencing up in the parking lot, so maybe some work will start soon. Although, that fencing may have been up for while and I just didn’t notice it.
When I find out any other information, I’ll let you know.
LOOK: Things from the year you were born that don’t exist anymore
The iconic (and at times silly) toys, technologies, and electronics have been usurped since their grand entrance, either by advances in technology or breakthroughs in common sense. See how many things on this list trigger childhood memories—and which ones were here and gone so fast you missed them entirely.
LOOK: See how much gasoline cost the year you started driving
To find out more about how has the price of gas changed throughout the years, Stacker ran the numbers on the cost of a gallon of gasoline for each of the last 84 years. Using data from the Bureau of Labor Statistics (released in April 2020), we analyzed the average price for a gallon of unleaded regular gasoline from 1976 to 2020 along with the Consumer Price Index (CPI) for unleaded regular gasoline from 1937 to 1976, including the absolute and inflation-adjusted prices for each year.
Read on to explore the cost of gas over time and rediscover just how much a gallon was when you first started driving.
Are you interested to learn more about the Greater Princeton, New Jersey Market Conditions, feel free to contact me at 609-915-9665.
The red hot residential real estate market is beginning to cool slightly and is expected to continue that trend for the rest of the year.
The frenzied buying New Jersey saw in the second half of 2020 and the first half of 2021 were driven largely by low interest rates, low inventory and buyers looking to leave urban areas, like New York City, for more space in the suburbs.
Note to readers: if you purchase something through one of our affiliate links we may earn a commission.
Are you interested to learn more about the Greater Princeton, New Jersey Market Conditions? Feel free to contact Rosy at 609-915-9665.
Are you worried about prices going up or down ? Would you like to explore your options ?
Historically low mortgage rates and droves of people working from home due to the pandemic made the housing market red-hot this year. Demand was high and supply was low, leading to a hyper-competitive market where more than half (54%) of homes sold above list price, according to a report by RedFin.
“The speed of home sales and price appreciation was staggering, almost regardless of location, because the strong housing market fundamentals leading into the pandemic were supercharged by low mortgage rates and big savings rates,” says Skylar Olsen, principal economist at digital homebuying platform Tomo. But will the market stay hot through 2022?
Competition seems to have slowed down a bit—RedFin reported that competition on offers written by their agents hit a record low for the year in August, going from about 74% in April 2021 (a record high), to 58%. “Expect much less competition pressure, but don’t expect prices to come down anytime soon,” says Olsen.
Are you interested to learn more about the Greater Princeton, New Jersey Market Conditions, feel free to contact me at 609-915-9665.
The 2021 “A Look at Wealth” report profiles four Power Player demographics who are reshaping the wealth groups, marking shifts in home buying and lifestyle trends
MADISON, N.J., Oct. 25, 2021 /PRNewswire/ — Today, Coldwell Banker Real Estate LLC, a Realogy (NYSE: RLGY) brand, and the Coldwell Banker Global Luxury® program released the “Real Estate’s New Power Players” report, part of the annual “A Look at Wealth” series. The luxury real estate market is seeing yet another dynamic year. Staggering wealth growth – driven by rebounding stock markets, cryptocurrency gains and higher 401(k)s – combined with soaring home prices and low interest rates meant buyers borrowed and saved more while reinvesting cash, leading to the emergence of a new set of Power Players redefining the meaning of luxury.
(PRNewsfoto/Coldwell Banker Global Luxury)
The report reflects that luxury real estate’s latest movers and shakers have had tremendous influence on the market over the last 18 months. Nearly three times as many individuals with a net worth of $5 million and up own real estate in the $1 million to $5 million range compared to numbers in 2019, an 180% increase of luxury property ownership in a three-year period.
About 71% of those with a net worth over $5 million now own properties in the $1 million to $5 million range. In fact, luxury homes purchased from January through August 2021 in the $1 million to $5 million range jumped 142% for single-family homes and 129% for attached properties compared to the same period in 2019.
The growth in the volume of wealth has also been extraordinary; between 2019 and 2020, it rose by over 21%, and escalated to 79% when compared to January through August 2021 during the same eight months of 2019. Data from the end of August 2021 already shows that the volume of real estate wealth in the luxury property market is greater than both the full years of 2019 and 2020.
Coldwell Banker Real Estate gathered the latest wealth research and data generated by WealthEngine, Wealth-X, and other third-party sources and combined it with anecdotal evidence from Coldwell Banker Global Luxury® Property Specialists in the field to identify luxury’s affluent Power Players dominating the shifting wealth archetypes in the current market. The four core groups identified are having a major impact on the luxury real estate landscape in 2021:
Story
Baby Boomers: Representing 51% of the Power Players, Baby Boomers, those aged between 57-75, are speeding up their retirement plans and moving into the home of their dreams. Many Boomers have leveraged the equity of their primary residences and sought out dream homes in more remote locales, like the rural countryside or resort towns. There are 2,020,854 Boomers who own more than three properties — the most out of any age group.
Golden Millennials: Golden Millennials, those aged 35-40, represent 60% of all millennial-owned luxury properties today. Holding more focus on values and the desire for sustainability and authentic living, this age group has shown a greater propensity for secondary cities and suburban locations that can offer them enough space for work, school and access to amenities. The influence of Golden Millennials will be important to watch as their wealth and real estate portfolios grow.
Second Homeowners: Largely attributed to the pandemic, many consumers desired a “get-away” residence, resulting in a rise in second-home purchases. Their influence on the overall luxury property market is one to watch; nearly 70% of those with a net worth of $5 million and up own two or more properties.
Urban Repatriates: As COVID-19 restrictions ease, a resurgence of the nation’s cities is prevalent. Luxury attached property values in 2021 increased an average of 14% compared to 2020 and 2019. Of the 184 U.S. cities reviewed by Wealth-X, there are 1,647,110 properties owned by the affluent with a net worth of $5 million and up in downtown cores as of August 2021.
With suburban settings, resort markets and secondary cities still booming, and major metropolises surging back, Coldwell Banker Global Luxury® also identified the top markets where Power Players are moving:
Baby Boomers
Golden Millennials
Atlanta, Georgia
Chicagoland, Illinois
Seattle, Washington
Second Homeowners
Monterey, California
Coeur d’Alene, Idaho
Park City, Utah
Urban Repatriates
Shifting the priorities of all generations, the pandemic formed new hotspots in the luxury real estate market. As these Power Players continue to make moves in the high-end housing landscape, new definitions of luxury will emerge as they refine how and where their wealth is spent.
QUOTES:
“Our local luxury experts have once again identified the latest trends in luxury real estate. In 2021, we’ve seen a continuation of trends we began to see in 2020, from renewed focus on family, health and wellness, to what we have seen this year with surging stock markets, soaring home prices and increased savings – all of these variables created a perfect equation for a profound shift in the volume of wealth. These factors propelled the market to new heights, altering the definition of luxury along the way.”
– Michael Altneu, vice president of luxury for Coldwell Banker Real Estate LLC
“In 2021, luxury real estate market growth has remained at unparalleled levels. The emergence of new Power Players flush with cash has been transformative in many markets around the country as affluent buyers flocked to sleepy rural towns, resort markets and the suburbs, and are now contributing to the resurgence of major cities. As interest rates remain low, paired with all-time high demand and the return of international buyers, the luxury market will continue to experience low inventory levels that we anticipate will have a lasting effect in the years to come.”
– Judy Zeder, co-founder and broker-associate of The Jills Zeder Group, Coldwell Banker Realty
“The ALAW data show what I have seen this year: the L.A. lifestyle will never grow old with buyers. Our beach cities, including Malibu, Newport Beach and Santa Barbara are popular for second homes. International buyers are also beginning to return to the L.A. market, because people feel safe investing their money in the U.S. With just a few months remaining in the year, sales in 2021 are already outpacing both 2019 and 2020. In particular, our $5 million and up market fared extremely well.”
– Jade Mills, president, Jade Mills Estates and International Ambassador of Coldwell Banker Global Luxury, Coldwell Banker Realty
About A Look at Wealth
A Look at Wealth is a collaboration between the Coldwell Banker Global Luxury® program and Wealth-X, WealthEngine and the Institute for Luxury Home Marketing. Released once a year, A Look at Wealth is a supplement to The Report, which combines industry research with anecdotal insights from local market experts affiliated with the Coldwell Banker® brand.
Methodology
The Coldwell Banker Global Luxury® program collaborated with WealthEngine, Wealth-X and the Institute for Luxury Home Marketing to provide insights into wealth creation, real estate and property investment, luxury spending preferences and new emerging trends regarding demographic and geographic changes.
To profile the affluent with a net worth of $5 million+ population and its combined wealth, this report leverages the unique and proprietary Wealth-X Database, the world’s most extensive curated research and intelligence on wealthy individuals.
Data was also collected from the WealthEngine platform, which is powered by more than 1,500 wealth and lifestyle attributes that support half a trillion data points, and uses proprietary learning science to create unique WealthEngine Profiles for more than 300 million people and 122 million households in the U.S. Information was gathered on individuals ages 18 and above, with a net worth (assets minus liabilities) of over $5 million as of August 31, 2021.
About Coldwell Banker Global Luxury®
The Coldwell Banker Global Luxury® program legacy traces its roots to 1933 and has been a world leader in luxury real estate since. Coldwell Banker Global Luxury Property Specialists are an exclusive group within the Coldwell Banker organization, making up under ten percent of independent sales associates affiliated with the brand worldwide.
Coldwell Banker affiliated agents conducted 32,663 transactions of homes priced at $1 million or more in 2020. This equates to $168.4 million in luxury sales every day (+16.6% YOY) with an average sales price of $1.9 million in this category. Coldwell Banker, the Coldwell Banker logo Coldwell Banker Global Luxury and the Coldwell Banker Global Luxury logo are registered marks owned by Coldwell Banker Real Estate LLC. Each franchise is independently owned and operated.
Are you interested to learn more about the Greater Princeton, New Jersey Market Conditions, feel free to contact me at 609-915-9665.
Then there was a 35-year-old tech worker in Long Beach, Calif., who bought a house in Round Rock for $300,000 last October. By January 2021, it was worth roughly $400,000; in February, he bought two more. His winning bids were two of dozens that his real estate agent, a former equities trader who now works primarily with individual investors, made sight unseen, all of them for at least $40,000 over the asking price. “I’m part of the problem,” the buyer acknowledged to me, though he was not your stereotypical speculator: Despite earning six figures, he drives a 2005 Honda Civic and, when I spoke to him, was renting a room for $900 a month, preferring to save and invest. (Scarred by graduating into the Great Recession, he aligns with the Financial Independence, Retire Early movement popular on Reddit.) He marveled at how FaceTime, DocuSign and electronic transfers made everything seamless, but because real estate money can now move so easily, it meant what he had liked about real estate investing in the first place — its stability and relative slowness — no longer held true. “We’re gamifying real estate investment to the point that it’s almost like throwing money at the stock market,” he told me.
Some Austin real estate agents have positioned themselves to capitalize on all this out-of-town money. On a steamy 95-degree day in late June, Matt Holm lifted the winged door of his Tesla Model X so that I could hop in the back seat behind his client, Jon, a man who worked in commercial real estate financing in Santa Monica. (Jon asked that I withhold his last name because he hasn’t shared his relocation plans with his friends and family.) During the pandemic, Jon, originally from Madison, Wis., began to rethink what was keeping him in California. “I’m getting a little anxiety about making a longer-term commitment to L.A., just given the political climate, the tax climate, the homelessness problem,” he told me.
Jon had traveled to Austin three times in as many months and was getting a handle on the “resi” market. He was looking for a home where he could declare residency to take advantage of Texas’ lack of income tax — but he also wanted to live elsewhere half the year, and so he was looking for a place he could easily rent out and make money on. And he wanted guaranteed appreciation. “I mean everything’s an investment, right?” he told me. A friend of his who had just relocated to Austin introduced him to Holm, whose dirty-blond hair was pulled into a sleek ponytail. He founded the Tesla Owners Club of Austin in 2013 and proudly referred to himself as the “Tesla realtor” in town. When Jon slipped in to look at a short-term rental, Matt told me that Jon would like to spend $500,000 to $700,000, “but he’s going to spend 1.3 to 1.5 by the time he’s done.”
“There’s nine million square feet of office being built,” Holm said, as we drove through downtown, cranes and glass skyscrapers glinting above stalky yellow-limestone and red-granite buildings. (The Austin Chamber of Commerce gave a lower but still shocking figure, 6.2 million square feet.) “And it’s being built, like, it’s not occupied. So those jobs are coming. People are telling me, like, Oh, you know, we peaked. … As far as the metrics, the Texodus is not slowing down. We’re about to get a tidal wave.”
“People haven’t even factored in the Elon effect,” he continued, “I can’t tell you the number of people that are saying, Oh, Elon’s building a factory. Like, no, Elon’s not building a factory — this is headquarters for everything Elon. He hasn’t officially announced it, and I don’t know anything behind the scenes, but I can see very clearly the people that are moving here, and they’re not factory workers.” (Indeed, in October, Musk made it official.)
Holm and Jon spoke the same language. They analyzed every parcel for how to maximize profits and shared tips for minimizing taxes. Walking through a cavernous tiled-and-carpeted two-story in Travis Heights, Holm suggested that with its many bedrooms, it would make an excellent Airbnb. Although Austin and the state stipulated that owners could rent only their homestead and only for a maximum of six months a year, “that could be every weekend,” Holm said.
“The investor I know that’s killing it right now is a systems guy,” he continued. “And I told him for four years that he had to get into the Airbnb business and he thought I was B.S.ing him on the numbers. And finally, he believed me, and now he has 13 Airbnbs.”
Are you interested to learn more about the Greater Princeton, New Jersey Market Conditions, feel free to contact me at 609-915-9665.
The pandemic created a frenzied real estate market in much of the United States that has yet to let up, with demand for housing still outpacing the number of homes coming on the market, giving sellers a heavy upper hand in most of the country. But economists say the market cooled off a bit in July — perhaps a sign that the wild price appreciations of the past year may have scared off some buyers who prefer to wait until things calm down, to stay put or to continue renting.
Nationally, U.S. median home prices held steady from June to July at $385,000. That’s up 10.3 percent from last year at this time, according to the latest data from Realtor.com. It’s slower growth than the 12.7 percent increase in June 2021, and it marks the third month in a row in which the year-over-year gains have slowed.
“There’s a lot of buyer sticker shock,” said John Burns, the chief executive of John Burns Real Estate Consulting, based in Irvine, Calif. “People who are a little more investment oriented or who maybe already own a home have pulled back.” Mr. Burns said prices could see a correction in the coming months in many markets — but not a dramatic one. “If prices have gone up 20 percent and then dip 2 percent, it’s not the end of the world,” he said.
“It is just moving from super hot to normal hot,” said Lawrence Yun, the chief economist for the National Association of Realtors, which has not yet released its July data. “It is still a seller’s market.”
It may also signal the return to a normal seasonal dip with many schools back in-person and delayed summer vacations finally underway. In 2020, the market came to a near standstill after Covid lockdowns hit in early spring — typically the busiest home buying season of the year. But it roared back to life during the summer, with people upgrading to larger homes or leaving cities for suburbia, even as inventory fell steeply across the country. Home buyers continued to flood the market with demand through the fall and winter, peaking this past spring.
Economists say the Delta variant’s impact on housing will likely be to accelerate the hybrid and work-from-home trend that is driving buyers with the means to do so to upgrade to larger houses — a trend that often takes people further from the urban core or to less expensive cities. And interest rates remain low, another factor in surging housing demand.
Danielle Hale, Realtor.com’s chief economist, said last month’s slower price growth was skewed because a larger share of smaller, entry-level homes hit the market compared to a year prior, bringing the median price growth down overall. But a typical 2,000-square-foot home still saw brisk price appreciation, up 18.7 percent from July 2020.
“For buyers looking for smaller, entry-level type homes, that’s good news,” Ms. Hale said. “I still wouldn’t say those homes are plentiful, but there’s more of them for sale now than there was a year ago.”
The most dramatic price appreciation happened in Western states and in suburban and exurban areas where buyers are looking for larger, single-family houses and relatively affordable prices. Austin, Texas, saw the biggest jump, with prices up 40 percent from last year, said Mr. Burns. Prices were softest in the Midwest and the Northeast, according to Realtor.com.
Patton Drewett, a real estate agent with Compass in Austin, said homes under $1 million were the most in demand in his area, with the price surge partly driven by buyers moving to Austin after cashing out of pricier cities like San Francisco, Los Angeles and New York. “I’m having to put five to ten offers out on homes to get something into contract,” he said. One client recently put a $975,000 offer on a home listed for $800,000. They didn’t get the house. “It certainly feels like the Wild West in terms of what people are willing to pay.”
Mr. Drewett said he saw things cool off in July, with homes getting between two and ten offers — down from the 30 to 40 offers a home might have gotten in the spring. But in the last two weeks or so buyers have returned from vacations and are once again shopping for homes, he added.
Nationally, the average home took 38 days to sell in July, up slightly from 37 days a year ago, according to Realtor.com, another sign of things slowing down a bit. The number of homes listed for sale was up 6.5 percent in July versus last year, which Ms. Hale said is a leading indicator of where the market is headed. “It’s still going to be a competitive market,” said Ms. Hale. “But we’re going to start to see more balance.”
My name is Rosy and I am a Realtor with Coldwell Banker in the Greater Princeton, New Jersey area.
Do You Want to Sell your House ?
Are you looking to Buy a House ?
Interested in a Rental
I can be reached at – 609-915-9665
Back-to-school shopping is expected to break records, but uncertainty around Covid-19 could mean a cut back on spending. CNN’s Vanessa Yurkevich reports.
Preparing for a baby doesn’t just stop at picking the name or setting up the nursery. It also requires a lot of financial planning.
The estimated cost for raising a child from birth to age 17 is an average of $233,610, or $12,189 a year, for a middle-income family (with two children) in the US, according to data published in a 2017 US Department of Agriculture report.
“It’s easy to get swept up in the emotions of the pregnancy and ignore practical matters,” said Deborah Meyer, a certified financial planner and CEO of WorthyNest. “It’s never too soon to begin financially planning for a new baby.”
Here are four money moves you can make to prepare for your little bundle of joy:
1. Create a baby budget
There’s no getting past the “B” word when expecting a child. In fact, having a budget is one of the most important money steps you can take.
When creating a budget, be realistic about your expenses and keep it flexible. Researching ahead of time what certain things will cost can go a long way.
Childcare is a good starting point, since it’s often the largest expense on many family budgets.
According to a 2019 report by Center for American Progress, a progressive think tank, the cost of childcare averages 14% of the incomes of middle-class working American families with two children who are earning $50,000 to $100,000 a year. It’s more than double that percentage for a lower-income family, taking up an average of 35%.
Also, make sure to factor in both pre-baby and post-baby expenses. That could include out-of-pocket medical costs, prenatal classes, as well as baby-related items like diapers and car seats.
In many cases, family members or friends may help supply basic items, such as clothes, or other big-ticket baby items, like a stroller. Asking for hand-me-downs is another way to save on clothing, as well as items like toys and furniture.
However, even if those purchases are covered, Meyer suggests allocating for at least $150 a month in additional baby costs.
By doing so, you can provide your family a healthy financial cushion to cover other recurring or unexpected expenses associated with a baby.
2. Talk money and make a plan with your partner
Many companies offer a form of maternity or paternity leave. You should check with your employer on the type of family leave plans they offer and the details of your healthcare coverage. Then, talk to your partner about next steps.
“Start to wrap your mind around what those early months would potentially look like,” said Danna Jacobs, a certified financial planner and founding partner of Legacy Care Wealth.
Decide if one or both parents will be staying at home or working. From there, you can get a better sense of available income and household cash flow during the first couple months of your baby’s life.
You should also consider your household’s retirement contributions and whether you’ll need to cut back or increase that amount based on your budget. Prioritizing paying off high-interest debt, such as a credit card, and finalizing any plans to fund a 529 savings plan for your newborn are other essential steps you should consider.
In cases where discussing finances with your partner proves to be uncomfortable or difficult, try working with a financial professional, like a financial adviser or coach, to keep you on track with financial goals and your budget.
“Navigating money conversations with your significant other may be awkward, even when you’re not expecting a baby,” said Meyer. “A good financial coach or planner can be helpful to ease the tension if every money conversation ends with an argument.”
Working with a financial professional can also help you navigate major lifestyle changes, such as getting a safer car or moving into a bigger space to make room for a newborn.
3. Secure more savings
Having adequate savings can set your new family up for financial success.
Usually this takes the form of an emergency fund, which financial experts suggest should consist of anywhere between three to six months’ of living expenses.
Add a baby into the equation and that can be more than you needed before. Since your expenses will be shifting, you’ll want to account for that by increasing the amount of your emergency savings.
To come up with a suitable target number, account for monthly expenses such as daycare, baby food, mortgage and car payments.
“It’s always good to get an idea of what that number looks like and start saving for it in advance before you have the additional cash flow hit from baby expenses,” said Jacobs.
4. Maintain a thrifty mindset
In addition to asking for hand-me-downs, other ways to save can include nursing (if possible), opting in for multifunctional baby gear, buying secondhand items or clothes, making your own baby food, and having relatives babysit rather than paying for outside childcare.
Another way to save is to seek out other parents for advice.
“The biggest mistake is not speaking with other parents of toddlers,” she said. “They are slightly past the sleep-deprived newborn stage of parenthood but close enough to it to remember the extra financial expenses associated with a baby.”
