5 Reasons to Keep Renting

renting

You should read this post if you are wondering whether to buy a house or spend your days living in a rented house. You could also be a person who is staying in a rented house and wants some reassurance on your decision to do so.

Renting a house can be a better option for someone who has a limited budget and doesn’t want to take big financial risks. Don’t worry, it doesn’t put you in the category of financially unstable people. In fact, your decision to live in a rented house shows greater financial awareness.

Here are 5 reasons to keep renting.

1) You can change locations when needed

Gone are the days when people use to spend their entire life in a single city or a town. Since the last ten years, there has been a massive change in the way people make financial decisions. And I am talking about both new and older generation. People want more flexibility and control over their lives.

They prefer having an option to move to a new city or a country whenever they want. This is one of the biggest reasons you should consider renting a house. Even if you don’t agree with me right now. It’s better to be open-minded and keep the options open. Never get locked down to a single place.

2) You want better infrastructure

infrastructure

Let’s be honest. Who doesn’t want a swimming pool, a golf simulator and a basketball court close to their apartment? All this is possible by renting a house in an apartment building that has all these amenities. You can enjoy every service and feature these fancy apartments have to provide. That too at a nominal monthly fee or sometimes they are included in the rent itself.

3) Saves a lot of money

Generally speaking, renting is always cheaper than buying a home. Also, you don’t have to worry about mortgage payments per month. By living in a rented house, you can save money on maintenance, repairs and HOA fees. 

But, it should be noted that the amount you will save will depend on the city, the size of the house and locality around your house. I can present to you many cases in which renting a house will be expensive in the long run compared to buying the same house. So, to get a good deal you have to get your calculations right.

4) You don’t have the time for maintenance

Real estate agents hire property managers who take care of the house and are responsible to solve any issue that might arise in a rented house. The tenants don’t have to lose their sleep if any problem like leakage in the plumbing, power-cut, or theft takes place in the rented property. The real estate agent takes care of everything and you can relax and live your life without having to deal with such petty issues.

5) Low initial investment

You could be a fresh graduate and still afford to rent a house. No one is going to care about how you will be paying your rent. Moreover, the owner makes himself secure by taking a security deposit– one or two months rent in advance– from you.

Conclusion

Before investing your money in a real estate property, it’s imperative to consult a trusted real estate agent who has a good reputation. Renting can be more expensive than buying if you don’t do your due diligence.

5 Tax Mistakes Freelancers Need to Stop Making

tax mistake

Freelancing is a big responsibility and you should be proud to be have taken it. But along with also comes a lot of additional concerns that many freelancers fail to address. One such concern is your future financial security or a retirement plan.  

In a 9 to 5 job, your employer does all the taxation and provides a retirement saving plan like 401 k. As a proactive freelancer, you have to take care of these things all by yourself.  

Here are the 5 mistakes freelancers need to stop making to achieve complete financial stability and flexibility.

1) Mixing your personal and business finances

Most freelancers don’t consider freelancing as a serious business. Hence they fail to correctly regulate their income. They use their business account to buy personal things and vice versa. This can cause a lot of problems when assessing tax at the end of the financial year. In addition, they never come to know about their business expenses. Mixing your personal and business finances is not only a tax mistake but also a poor way to run a business.

2) Not saving for retirement

retirement

Retirement plans and saving money for the future have always been linked with a stable 9 to 5 job. Freelancers don’t consider themselves in this category so they never think about saving money for the future. It is true that freelancing is a small business and not a job. But saving money is one of the very basic financial lessons that everyone show know.

3) Not paying self-employment tax

The employer is supposed to notify the IRS of the amount of tax owed by his/her employees. But since you are self-employed, it is your obligation to report your income to the IRS. And you can do this by paying self-employment tax. Usually, the self-employment-tax consists of Social Security and Medicare. And by making contributions to both you can cut your overall tax. For a freelancer, not paying self-employment tax will result in a hefty penalty and high tax on gross income.

4) Neglecting health care contributions

Health care

You probably would love to know that, as a freelancer or a self-employed person, you are eligible to deduct premiums for health care. That being said, you still have to apply for a healthcare plan and pay the premiums initially. The IRS will adjust the healthcare premiums that you paid by lowering your taxable income. [1]

5) Not having an emergency fund

It’s a great feeling to be self-employed as it provided freedom and endless opportunities, but if the unexpected should happen, who will pay for your expenses? In life, nothing is certain and in crisis situations of need, you will someone to back you up financially. This is where emergency funds come in play. Not having an emergency fund is a huge tax mistake.

Conclusion

Lastly, to help manage your finances, you can use accounting software like QuickBooks Self-Employed. With QuickBooks Self-Employed, you can also collaborate with your accountant or bookkeeper–in case you decide to hire one.    


[1] “Emergency Fund Definition – Investopedia.” Accessed May 29, 2019. https://www.investopedia.com/terms/e/emergency_fund.asp.