In general, most things in China are more affordable than in the U.S. However, International travel is not cheap, so it’s important to know how to save money on your travel expenses in Wuhan city, Hubei Province.
I have visited Wuhan once, but my wife lived there for around half a year. I’ve articulated many of her thoughts on how to save money while visiting there.
Specifically, I’ll be sharing 14 money-saving tips to help you better budget your trip to China!
Note: The Chinese currency is Yuan or Renminbi (RMB/￥), and the American Currency is the United States Dollar (USD/$). Usually $1.00 USD = around ￥6.5 RMB (Yuan).
When we visited Wuhan on vacation (me, my wife, and in-laws)
Wuhan City is the capital of Hubei Province in China. Wuhan is not only the largest city in Hubei Province but also the largest city in Central China.
Wuhan, knоwn аѕ the “Rivеrѕidе Citу,” iѕ lосаtеd at thе heart оf thе Yangtze River. It is соmроѕеd оf thrее tоwnѕ: Hаnkоu, Hаnуаng, and Wuсhаng. All оf thеm hаvе mаnу historical аnd cultural ѕitеѕ.
The elements of tourism include food, housing, traffic, shopping, entertainment, etc. Wuhan is generally cheaper than visiting Beijing and Shanghai in China.
One of the best ways to save money is to choose to visit Wuhan City, Hubei Province, during the off-season.
You can save money on air tickets and hotels during the off-season.
However, a potential disadvantage of going during the off-season is that the weather is cold. As a result, there will be less green.
One of the famous scenery in Wuhan is the cherry blossoms in Wuhan University. Unfortunately, if you go in winter, you will not be able to enjoy this beautiful scenery.
2) Beware of Chinese Holidays!
Try to avoid traveling during Chinese public holidays! Most locals will go travel with family during major holidays.
The flights and hotels will be more expensive, and the subway, buses, and tourist attractions will be packed with people – in Chinese, we call this 人山人海 (Ren Shan Ren Hai). The direct translation is “people mountain people sea,” but it actually means a huge crowd of people!
You don’t want to share the road with a billion other people.
My wife Shan also told me there is a saying: if you travel during the Chinese public holidays, the only view you can see at a tourist attraction is the backs of many people’s heads. 😆
You can view the Chinese public holiday calendar HERE.
3) Consider Chinese Flight Sites
When you purchase your flight tickets, you can check some Chinese-run sites such as trip.com, Qunar.com, etc.
Sometimes you can purchase cheaper flight tickets on these Chinese-run sites.
My wife Shan was an international student in the USA, so she has a lot of experience purchasing air flight round-trip tickets between the USA and China.
She said that summer and winter breaks are usually considered hot seasons. Additionally, flight tickets will be more expensive because many international students here in the USA will return to China. Many Chinese families will also travel to the United States during these break times.
Shan told me (from her own experiences) that flights from America to China are often around $1,000 round-trip during the hot season.
But for the off-season, you can expect the price to be around $750, which is at least $250 cheaper for a round-trip.
Keep in mind there are frequent sales and amazing discounts! So remember to keep looking and sign up for low-price alerts.
4) Navigate Using Baidu Maps or Gaode Map
Alright… so this is a MUST-know tip before you go to China.
Most of our typical methods to web surfing, navigating, and communicating with one another are BLOCKED in China.
You will not be able to access Facebook, Gmail, YouTube, Google Maps, Instagram, Facebook, and so much more.
Instead, you’ll need to use either Chinese websites or apps or find ones that aren’t blocked in China.
Or you can download a VPN, which I will talk about later.
Baidu Maps and Gaode Maps are the two most common GPS resources, but they only offer the Chinese language.
They can be an excellent option if you can understand a little Chinese.
If you cannot read Chinese, then your next best choice is to use Maps.me.
Or you can download a VPN. When you have a VPN, you can access google products or other products blocked in China.
5) Get a Free VPN Trial
As I just mentioned, if you want to access websites and apps that you’re using daily, such as Gmail, Google, Google Maps, Facebook, Gmail, etc.. you’re going to need a VPN.
Just google VPN in China, and you will see tons of options.
If you want to save money, you can take advantage of a free trial.
Also, don’t forget to cancel your subscription when you leave China!
6) Avoid the Worst Places to Exchange Currency
Traveling aboard is exciting, but the country traveled to often does not use U.S. dollars.
Then you will need to do currency exchange. If you can do currency conversions wisely, you might be able to save a lot of money!
Below are five key takeaways from Investopedia. I hope it can help you avoid the worst place to exchange currency.
Currency exchange shops and kiosks in airports are not the best places to exchange money.
For the best rates, try a local bank or a bank ATM to make your currency exchanges.
Check to see if your U.S. bank offers foreign ATM fee refunds for using a foreign ATM.
Not all currency exchanges charge the same rate.
Tourists can get ripped off by some businesses, so it is advisable to shop around for a reasonable rate.
7) Understand Payment Methods in China
Many ATMs in China will probably refuse foreign debit cards. So if you need money, you better look for a Bank of China, ICBC, or China Construction Bank ATM. They are the main banks that accept foreign cards.
ATMs in China can be somewhat confusing to use because a lot of them start in Chinese. The good news is there is usually a button to change the language to English.
If you still have problems, go inside the bank and talk to an employee. Some Chinese people can speak simple English. If not, a translator App can be your good friend, haha.
Don’t expect your foreign credit cards to work in China.
In China, locals use Alipay or Wechat pay as payment methods.
Both of these two apps are very easy to use. There is a code at the checkout section. Scan the code in the apps, then confirm your payment.
But remember to always have some cash on hand.
Because Wechat Pay and Alipay are so widely used in China, some stores don’t even accept credit cards.
My wife and I are embarrassed to encounter this situation. Because in the U.S., we use credit cards everywhere we go, which is a huge difference.
8) Find a Place to Stay Within Your Budget
Luckily, the price of hotels in China is lower than in America.
In Wuhan city, Hubei Province, You can find a lovely hotel room as cheap as ￥200, around $35 a night.
American hotels can cost $200 per night and can be pretty old. So finding a very nice hotel in Wuhan at a reasonable price shouldn’t be too difficult.
When you book a hotel room, you can check some Chinese-run sites like trip.com, Qunar.com, etc.
Sometimes you can find more hotel listings (especially budget listings) on these Chinese-run sites.
AIRBNB can be a good choice, especially if you find a Chinese host who can speak English! There’s a good chance they could give you some sound advice about traveling around Wuhan, Hubei.
9) Save Money on Food in Wuhan
Food is central to Chinese culture and will become one of the most memorable aspects of your trip to China. I’m getting hungry just thinking about it!
Chinese people, like my wife Shan, are not just traveling for tourist attractions but also travel for the delicious local food that is unique to that specific area.
In Wuhan, you can enjoy delicious food at an affordable price, even cheaper than cooking for yourself. The average meal can be as low as $2-$5 per person. And you can eat very well!
You also don’t need to pay tips in China, which can save you money too.
My wife lived in Wuhan for half a year, so here are some of her recommended dishes that are Wuhan special: Hot Dry Noodle (with sesame paste), Doupi (a pan-fried delicacy of glutinous rice and minced meat), Stewed Spare Ribs with Lotus Roots, Joy ball (Wuhan-style fried glutinous rice ball with sesame and brown sugar fillings ) etc.
10) The Cheapest and Fastest Way to Get Around
1. The most convenient: the subway
Wuhan has nine subway lines extending in all directions, which can basically cover all the famous scenic spots in the city. No matter where you want to go, the subway is the most convenient, fast and cheap travel option in the city.
2. The most comprehensive coverage: bus
No matter where you want to go, you can go as long as you choose your destination and plan your route. More importantly, the price is low, and you can see the style and customs of the entire city along the way.
3. The most convenient – take a taxi
Wuhan is a very big city, so be prepared to take a taxi for a long distance, and the price may be higher.
You can download Didi Ride which is “Chinese Uber.”
11) Consider FREE or Cheap Attractions
Tickets for some attractions can be pretty expensive.
Fortunately, Wuhan has tons of cool spots that are entirely free to visit! There are tons of ancient streets, fantastic markets, neighborhoods, and parks that are free or cheap.(free wuhan post link)
12) Students and Seniors’ Discount
Being a Student or Senior has significant money-saving benefits when visiting Wuhan City, Hubei Province.
You can usually expect a 50% discount or even 100% FREE admission for students and seniors in China! So it might save you hundreds of RMB in ticket costs.
Remember, don’t forget your senior ID and/or student ID when you visit an attraction.
13) Bargain Tips in China
My wife told me that locals charge a higher price when they see tourists, especially foreigners. They do this because they think you are rich and don’t understand the Chinese market.
My wife taught me these Chinese bargaining tips:
No matter how much you like the product, don’t show it! Instead, tell the seller your ideal price but a little lower. If the seller disagrees, you say no and start to leave. Most of the time, the seller will give you a lower price when they see you are leaving.
Shop around; there are a lot of shops selling similar souvenirs in Beijing. If one shop doesn’t work out, check out other shops to find the same thing or something similar.
Remember, bargaining is the Chinese way! Don’t be shy to negotiate a lower price.
14) Beware of Scammers
Be careful with your backpacks and wallets because there are many people around, including thieves.
Especially be mindful to keep your essential identity documents in an extra safe. It is very troublesome to lose them abroad.
Besides that, be careful of scammers. There will be scammers who will come and talk to you. No matter how good it sounds, know they are trying to trick you.
Be careful not to be deceived.
In Conclusion
I hope this article can help make your trip fun while saving time, effort, and money.
Last but not least, if you don’t speak Chinese, remember to download a translator. Although translators can sometimes translate strangely, it will undoubtedly help.
Using the tips in this article, you can visit this fantastic city of Wuhan and save lots of money!
If you have any questions, please comment below and ask us!
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
If you want to save money on your wedding expenses, you have come to the right place. My wife and I’s wedding cost under $5000. I will share how we made that happen and still had a fantastic and memorable wedding.
“The Wedding Report’s average cost for a 2022 wedding sits at around $27,000.” – Fool.com
$27,000 for a wedding?!
It’s definitely possible to keep wedding expenses much lower, especially for couples on a budget and planning for other big purchases such as buying a home.
In this article, I will share a little background on how I met my wife, the budget breakdown for our wedding, and 16 tips to help you have a beautiful wedding while on a budget!
Our Love Story
Shortly after returning from my LDS mission in Taiwan, I started the first semester of my bachelor’s degree.
I learned Mandarin Chinese during my two years of LDS mission in Taiwan and continued taking Chinese courses in College.
I am especially grateful for my two-year missionary experience; without this experience, I might not have married my wife Shan.
Both of us were in the school orchestra at Utah Valley University. After class was over one day I summoned up the courage to go talk to Shan and used my Chinese homework as an excuse to hang out. 🙂
Our first date was in September of 2015.
We kept dating and getting to know each other very well. We grew closer together and realized we couldn’t stand being apart.
This became crystal clear when I transferred to BYU-H for a semester but was away from Shan. After the second time she came to visit me I decided to transfer back to Utah so I could be with her.
In December 2016, I proposed to Shan and thankfully she said yes! On May 6, 2017 we were officially wed.
Why We Decided to Cut Expenses For Our Wedding
Shan and I needed to save on wedding expenses mainly because we wanted to save up a down payment and buy our first home together.
Shan reminded me that a wedding is temporary, but buying a house will benefit us for many years. We had the plan to rent out our first property in the future.
We are fortunate to have received help with most of our wedding expenses from my parents and in-laws. They did so to help us better save for our down payment, but we still created a budget for our wedding and made sure the total expenses were under $5,000!
We kept things simple, so we did not go over budget and did not need to spend our own money.
“Marriage is a partnership, and couples can’t win with money unless they budget as a team.”
Now let’s talk about 16 ways to save and find the best deals for your wedding!
1. Buy A Wedding Dress From Overseas
As you know, wedding dresses can be so expensive in America.
My wife Shan is from China and told me that the wedding dresses there are so much cheaper.
To save money, Shan bought her wedding dress from China for $250. The shipping cost was $100 because the dress was big and heavy.
Holding my wife’s super long dress!
When my parents saw the dress for the first time, they thought it cost $5000.
After our wedding, my wife tried to sell the wedding dress, but the people who came to try it either didn’t fit or thought it was too long.
In the end, we decided to donate our wedding dress because we also needed to prepare to move and declutter.
The good thing is that the wedding dress was only a fraction of the cost in America, and donating it was the right choice for us to help another bride have a beautiful wedding.
2. Use Regular Dress Pants
Honestly, most people will probably not notice or care if you wear regular black suit pants or fancy tuxedo pants. We personally felt it simply was not necessary to buy or rent expensive black slacks.
I purchased a white tuxedo suit coat at Men’s Warehouse when they had an awesome buy one suit coat get one free promotion.
The salesman is my dad’s childhood friend and was a great help. I only purchased a suit jacket (I got another free) and a blue boutonniere.
I just used the black pants I already had from Walmart in my closet.
My $100 Tuxedo Jacket
After the wedding, I sold the white tuxedo for $100. So actually the actual cost was only $100!
3. Find Affordable Wedding Rings
“According to The Knot 2021 Jewelry and Engagement Study, the average cost of an engagement ring is currently $6,000. Only 8% of ring shoppers are spending under $1,000.”
I’m very grateful to have a wife who focuses on building a financially secure future.
I felt bad at first for not getting an expensive ring, but looking back now we’ve had three real estate properties together and have two beautiful children.
Our relationship and cooperation have helped us find true happiness.
We bought our groomsmen ties from overseas since they were much more affordable.
My parents-in-law helped us bring it from China when they came to the USA for our wedding.
The total cost for all of the groomsmen ties was ten dollars!
Me and the groomsmen 😀
There are many Chinese websites for shopping, such as Wish and AliExpress.
The cheapest shipping usually takes a long time so remember to prepare in advance.
5. Cute Shawls for Bridemaids
Buying or renting bridesmaid dresses and buying flowers for each bridesmaid can be very expensive.
My wife came up with an idea for just letting them wear their own white dress. All we gave them was a pink shawl.
You can see the outcome in the picture below! 🙂
My gorgeous wife with her bridesmaids
If your bridesmaids don’t have a certain color of dress, they could always borrow one from a friend just for the wedding.
The total for the bridesmaid shawls was $20!
Cheap shipping on sites like Wish and AliExpress usually takes a long time, such as more than a month, so remember to prepare in advance.
6. Look For a Discount on Reception Center
Our reception center was on top of a mountain with big windows overlooking the valley (in Utah). I got a discount since my brother was the HOA Manager, and I had worked there before too.
The total was $150! That also included all the tables and chairs in the price!
So look around for discounts and packages that are affordable for your budget. Other ideas are checking to see if your HOA has a clubhouse or asking a friend or family member who has a large backyard to use it for your reception.
7. Hire a College Quartet
Using this tip can save you a ton of money and give your wedding a special feeling with live music!
As I mentioned before, my wife and I met in the school orchestra at Utah Valley University.
We invited our classmates/friends from the orchestra. Four of them happened to be in a quartet and were all very skilled musicians.
Our college quartet friends!
We loved the beautiful music they played at our wedding.
Many College orchestras have elite musicians who form quartets and can play at weddings for a fraction of the cost of hiring someone else.
8. Shop Around For a Wedding Arbor
Make sure to shop around and not give up when looking for your wedding arbor! You could also ask friends or family who was recently married to see if they were able to find a good deal.
Finding an affordable wedding arch or arbor was the most difficult for us.
We almost gave up on saving money because we could not find a very good deal.
Wedding reception dance with wedding arbor behind us
Fortunately, my Mom walked around a store and found an arch with flowers and delivery totaling $200.
9. Consider a Fake Flower Bouquet
Give yourself enough time, and you should be able to find a beautiful flower bouquet at a good price.
We got a fake flower bouquet to save money since the seller’s pictures made it look nice. Unfortunately, we didn’t like it that much and realized we should have checked other reviews first – so check those reviews!
We were still going to use it but my Mom noticed my wife was not happy with the bouquet, so she ran to the flower store and booked a bouquet with real flowers for my wife.
We think this is a valuable tip to save more money and you can find a suitable fake bouquet by checking others’ reviews.
10. Find a Great Deal on a Wedding Cake or Make it Yourself
The best way to save money on your wedding cake is to make it yourself! There are many tutorials and how-to videos online.
We have some friends who made their own wedding cakes to save money.
We didn’t have the idea that we could make our wedding cake until after the wedding, haha.
Instead, we spent a lot of time looking for the best deal for our wedding cake.
Everything cost us $275 including delivery fees as well.
It was pretty and delicious!
Our $275 wedding cake
11. Keep Catering Simple Yet Delicious
Keeping the catering service simple yet elegant can go a long way to save you money on your wedding expenses.
Catering services is the most expensive aspect of our wedding. We actually tried not to invite too many people to the reception to help save us money.
The wedding food is also simple so it didn’t cost that much. For lunch, we had some sandwiches and treats. For dinner, we just had light refreshments such as a chocolate fountain with fresh fruit.
12. Get Creative With Tableware
Our wedding tableware was pretty simple; we did not do anything fancy.
We rented white table clothes, blue runners, and pink bows for the chairs and a tall wedding cake table with shiny table clothes.
My wife spends a lot of time looking for the best deal. We picked it up by ourselves, and my parents returned it so we didn’t have to pay delivery fees.
So shop around and see if there are options for you to pick up and return the rented tableware.
13. Find a College Photographer
There are many incredible college students studying photography for their majors. It’s easy to get an idea of their work by asking for samples of their previous work and how long they have been doing photography.
The price will also typically be much more affordable than hiring a wedding company or someone else.
Our wedding photographer was a good friend from Church. She was still a college student so she did not charge a super high price.
And we loved our wedding photos! This friend helped take our engagement photos as well.
She charged $600 for the wedding and $100 for the engagement photoshoot.
Many students or new photographers need to build up their profile, so they will charge a lower price or even take your pictures for free!
If you want to save money on your wedding or engagement photos, find a talented college student photographer.
14. Consider Digital Invitations or Keep Paper Invitations Simple
Using digital wedding invitations can save you a large chunk of money. My wife and I really wanted to do online invitations since the price would be much lower or even free.
My parents, however, are more traditional and wanted the paper kind, so we went with paper ones but kept the dimensions small to save on costs.
Another option is to release your creativity and make your own invitations using crafting supplies!
15. DIY Decorations!
You’d be surprised how easy it is to create an elegant wedding with homemade decorations!
The decorations for our wedding were very simple and we did a lot of the decorating ourselves. For example, we put our string instruments on display since it reminds us of how we met in orchestra class.
Having lots of pictures is one of the easiest and most affordable ways to decorate! Also, try putting items out that reminds you of how you met and got to the point of getting married.
16. Find a Discount on Wedding Makeup Artist
If you or someone you know has makeup expertise, you could always save money doing it yourself.
Otherwise, there are definitely ways to find an affordable wedding makeup artist. My wife wanted a professional to do her makeup for our engagement and wedding pictures.
The makeup artist we found was a friend’s friend, so we received a fantastic discount, each time costing $50. They also drove to our house, which was so convenient!
So ask around, and you can surely find a good deal!
In Conclusion
If we could keep our wedding budget under $5,000, you can too!
Keep in mind the tips provided in this article, and give yourself plenty of prep time to shop around and find amazing deals.
Making an effort to do so will save you a lot of money. That saved money can then be used on a down payment or other expenses.
Thank you so much for reading! Please comment below with your experiences and own tips on how you saved money on your wedding.
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Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
Many people want to get started investing but aren’t sure what strategy to use. Others aren’t sure if it’s possible at a young age or with a lower income. Don’t worry; that’s why I wrote this article to help give you insights into our Real Estate strategy.
Real Estate investments can be a powerful tool to help you achieve financial freedom, and it doesn’t have to be hard or complicated. My Wife and I love real estate and started our investing journey as young college students in Utah.
When we purchased our first property, we were just college students, ages 21 and 23!
We did not have a lot of money. We did not have high-paying jobs.
Through hard work, we saved up $20,000 and kickstarted our real estate journey. Now that $20,000 has become $400,000 after five years!
Since we did not have a lot of income, we couldn’t follow the BRRRR strategy strictly.
More on that to come…
This post may contain affiliate links; please see our disclaimer for details.
Video Sharing Our Real Estate Strategy
Our Real Estate Numbers and Timeline
First Real Estate Property
Our first property turned out to be a nice townhome located in Utah. It was built in 1970 and had two bedrooms plus 1.5 baths.
The total price was $100,000 in 2017. My sweetheart was 21 years old, and I was 23.
In total, we saved up $20,000 for our down payment. Since the downpayment was 20% of the house price, we did not have to pay mortgage insurance!
Our monthly mortgage payment was around $850 with HOA, taxes, etc.
We lived there for over a year and then rented it out for almost two years.
The rental income was $1000 a month, giving us $250 extra cash flow each month!
In 2020 we ended up selling the property for $140,000.
Second Real Estate Property
We bought our second property (a condo) in 2018 when My wife was 22 and I was 24.
It was after accepting a job offer as an account manager that we decided to upgrade our home and rent out the first property, becoming first-time landlords.
The condo we found had 3 bedrooms/2 baths and was built-in in 2002.
As our second property, we could only apply for a conventional loan with a minimum requirement of 5%.
We also had to pay PMI (mortgage insurance) since the down payment did not reach 20% of the loan’s total amount.
The total price of the condo was $171,000. Our down payment + closing costs were $10,000 in total.
The monthly payment with HOA and mortgage insurance included was just about $1,200. When COVID-19 happened, the interest rates dropped significantly.
We noticed these great interest rates and decided to refinance this condo!
After refinancing, our monthly payment went down to around $1,000 (Mortage, HOA, etc.), saving us $200 a month!
After living in the condo for around two years, we rented it out. We are still renting this condo, and the rental price is $1330 now, which gave us around $330 a month in cash flow!
Recently, the same condo sold in our community is around $300,000. When we bought it, it was only $170,000.
Third Real Estate Property
Our new home was under construction in July 2020. The building process was exciting and took ten months to finish.
We officially closed on the house / third property in May 2021 when my wife was 24 and I was 26.
The total price of our new single-family home was just around $340,000. The home’s square footage is 2,300, with a lot size of 0.12 acres. We put down a 5% down payment which cost us $20,000.
Our locked interest rate is 3%. In total, our mortgage payment each month is $1,530. After we moved in, we finished both our yard and basement.
The cost of finishing both our yard and basement will be approximately $20,000. A lot we did by ourselves, but some parts were hired out.
Recently the exact same model that sold in our community is $500,000 without a furnished yard and basement. Yet, when we bought it, it was only $340,000.
Since we hit Coast FIRE and moved abroad, this third property is now rented out, providing us with positive cash flows. We rent it out for $2,200 a month. Our total monthly expense, including mortgage payments, HOA, etc., is $1,600. This gives us a monthly cash flow of $600.
Now let’s talk about what BRRRR is first, and then we will share our real estate investing strategy.
So you can compare both of their similarities and differences so that you can decide which one is right for you!
“If you can, you should, and if you’re brave enough to start, you will.”
Stephen King
What Is The BRRRR Method?
The BRRRR method is a strategy for real estate investing that stands for “buy, rehab, rent, refinance, repeat “.
This methodology can be used in both residential and commercial real estate investing.
Buy: The first step is to find an investment property you want to purchase in a good location.
Once you have found a property, you will need to put down a deposit and then close on the deal.
Rehab: After you have purchased the property, you will need to renovate or repair it so that it is in good condition and value is added.
Once the repairs are complete, you can start renting the property to tenants.
Rent: After the property has been rented out for some time, you can refinance the property loan.
Refinance: You can conduct a cash-out refinance where you take out cash for the equity in your property and use it to purchase your next one.
Repeat: Once you have refinanced the property, you can then repeat the process by finding another property to purchase and rehab.
Our Real Estate Investment Strategy
Here is a quick overview of our strategy:
Buy as owner-occupied (residential property).
Do some easy remodeling while living there.
Save up a downpayment for the next property.
Buy the next house and rent out the previous one.
Repeat the process.
Let’s go over each step of this strategy so that you can understand how it works and decide if it is right for you!
1) Buy as Owner-Occupied (Residential Property)
Once you have saved enough for a down payment, you will purchase your house as owner-occupied/residential property.
If you buy an owner-occupied/residential property, you can obtain a better interest rate, saving you a lot of money in the long run!
This is a crucial tip – When we look for a house, we always research how much we could rent out a property for and whether it can provide positive cash flows after mortgage payments and other expenses.
When we bought our first owner-occupied/residential property, our lender required us to live there for at least one year before converting it to a rental property.
Different lenders might have different rules, so it is good to check your lender.
During the time we lived in the property, we had time to remodel and start saving a down payment for the next home.
Remember to ONLY buy the house you can afford, NOT your dream home. Then, when you have a better financial situation, you can always upgrade to a better house next time!
My wife and I always told ourselves this is NOT our forever home; it doesn’t need to be perfect. It will be our rental one day, and we will work hard for our next one.
This has been an excellent motivation for us and reminds us to live within our means.
2) Do Some Easy Remodeling While Living There
As mentioned before, our lender required us to live there for at least one year before we could convert it to a rental property.
We were college students back then and didn’t have a lot of money. There was no way we could afford to buy rental property directly like some people, or spend a lot of money to hire professional contractors for remodeling.
Our first and second homes are second-hand houses, but our 3rd property was a brand new house we built. The nice thing about that third home is there was no remodeling needed so we did some house improvements such as finishing the yard and basement.
So we did some simple remodeling when living in our first and second properties, like painting doors, kitchen cabinets, and switched some old appliances, etc.
To make the place look nicer when we rent. Cleaning and painting are the BEST, EASIEST and CHEAPEST ways to remodel your house and make it look 100 times better.
Another note is that the seller must have owned the home and used it as their principal residence for two out of the last five years (up to the closing date).
This means if you lived in the house for two years, you can sell it with ZERO CAPITAL GAINS TAX within three years. If you have the plan to sell, it’s a good idea to stay there for at least two years!
3) Save up a Downpayment for the Next Property
If you know your goal is to purchase another home, you should start saving your next house down payment ASAP.
Once you have a better-paying job or are ready to upgrade your home, you will have the money ready.
It would help if you had an idea of how much your next house would cost so you can know how much of a down payment to save.
This part is different than BRRRR because we typically don’t refinance our properties and pull money out to buy the next property. We 100% save up the down payment by ourselves because we felt it was a better option with less risk for our family.
4) Buy the Next House and Rent out the Previous One
This step is very exciting! Once you are ready to buy a new place, it’s time to rent the one you live in.
Usually, you need to rent it out and provide the rental agreement and security deposit to your lender to close your new house.
Also, check with your HOA and city to see if other landlord licenses or documents are required. Our first property HOA required a copy of our city’s landlord license certificate but our second property HOA did not.
5) Repeat the Same Process
This step doesn’t need a whole lot of explanation, haha. Just re-start the steps and you’ll find it’s a very easy and enjoyable process!
Keep the process going and know you can reach your goals in time, and eventually get into your dream home!
Some tips for this step: Repeat
Keep track of your finances.
Diversify your portfolio.
Stay disciplined and learn from past mistakes.
Our real estate strategy can be a great way to succeed in investing and help lower risks associated with typical investing.
If you are patient and careful, you can use this strategy to build a portfolio of assets that will provide passive income!
Remember…
“Landlords grow rich in their sleep.”
John Stuart Mill
A great way to start investing in real estate without a lot of money is with Fundrise, a crowdsourcing real estate investing platform.
With investment minimums of ONLY $10, you can start making PASSIVE INCOME with your real estate investment portfolio!
Real estate investing can be a great way to make money and build wealth over time.
But every investment has its risks. It is essential to do your research and understand everything before getting started.
One more thing I want to say is that we have also been very fortunate.
The past few years have been a perfect time to invest in real estate in Utah. We could buy a house when the price was still relatively low and then watch it increase in value.
The value is still increasing, and having rental income as passive income is a fantastic thing!
We are grateful we have made $400,000 in profits with our real estate strategy.
Although we don’t place all our investment eggs in real estate, it has still been a powerful FIRE tool!
We’d love to hear your thoughts! Feel free to drop a comment or question below.
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
Are you looking for a less intense way to achieve F.I.R.E. (Financial Independence/Retire Early)? Look no further than Coast FIRE!
Coast FIRE is arguably the simplest and most effective way to join the FIRE movement. It provides a clear and concise path to FIRE without all the overwhelming financial jargon.
Here is my YouTube video going over this content (if you prefer to watch it instead).
This post may contain affiliate links; please see our disclaimer for details.
What is Coast FIRE?
Coast FIRE Benefits
Coast FIRE is a popular retirement strategy involving saving enough money so your nest egg can grow without additional contributions. Once you reach Coast FIRE, you no longer need to work to save for retirement; instead, you only work to pay for current living expenses. This allows you to enjoy a more relaxed lifestyle and focus on activities you enjoy rather than working simply to earn a paycheck.
To achieve Coast FIRE, it is essential to start saving early and invest in a diversified mix of assets. Coast FIRE provides individuals with financial security in retirement and is an excellent option for those looking to retire at the typical retirement age.
How Much Should You Save to Reach Coast FIRE?
Coast FIRE calculation considers variables like age, income, and expenses to determine how much you need to save each month to reach your goal.
While no fixed sum will satisfy everyone’s retirement needs, a rough estimate is often considered 25 times your annual expenses, which is your FI or FIRE number.
Let’s say your monthly expenses at retirement will be $1,300 a month; you will need $15,600 (1,300 x 12) a year and $390,000 (15,600 x 25) to cover expenses for 25 years.
This is based on the 4% principle, which states that you can withdraw 4% of your savings each year without running out of money.
You will want to ensure you have enough in your investment accounts to grow passively without contributions so that it can grow and reach your FIRE number by the time you retire.
Once you hit that number, you will have reached Coast FIRE!
Coast FIRE can be a helpful tool for anyone who wants to retire early or achieve financial independence.
The Coast FIRE approach is simple: you save a certain percentage of your income and invest it in a way that will generate a passive income stream. However, there are a few key components that you need to be aware of before beginning.
First: you must calculate how much you need to save to reach your retirement goals.
Second: you need to choose the right investment vehicle for your needs.
Third, estimate how long you’ll need to keep your money invested.
Coast FIRE example
The formula for determining a Coast FIRE number begins with a regular FIRE number, estimated to be 25 times annual spending.
So, for example, if someone spends $50,000 annually, their regular FIRE number would be $1,250,000.
The Coast FIRE number is then determined by dividing the regular FIRE number by (1+annual growth rate) to the power of “years to grow.”
In the example above, if it is assumed that it will take 30 years to reach the regular FIRE number, and the average annual growth rate over those 30 years is 7%, the calculation would be $1,250,000 / (1 + 0.07)^30 years = $164,209.
Therefore, the Coast FIRE number in this example would be $164,209. It should be noted that this number is only an estimate and may vary depending on individual circumstances.
Nevertheless, it provides a helpful starting point for anyone looking to save for a comfortable retirement.
To sum things up, here are two ways to calculate your Coast FIRE number
Use the formula from the example above. You can adjust your annual return rate and use this exponent calculator. Then divide that number by your FIRE number.
Use a reliable investment calculator to see how much your investments will grow without added contributions.
What Are the Benefits of Coast FIRE?
1. You can achieve financial independence and retire early.
The real reason you want to achieve FIRE is to retire early and live life on your terms. And Coast FIRE makes this possible!
Once you reach your Coast FIRE number, you can quit your job and enjoy a life of leisure. All you need is to work or have passive income streams to cover daily expenses.
2. You don’t have to worry about outliving your savings.
How many people do you know who are worried about running out of money in retirement? With Coast FIRE, you don’t have to worry about this.
As long as you have your Coast FIRE number saved up, you can live off of your passive income for the rest of your life, no matter how long you live.
3. You can still retire even if your investment portfolio takes a hit.
We all know that the stock market is volatile, and it’s impossible to predict what will happen in the future.
However, with Coast FIRE, you don’t have to worry about this. Even if your investments take a hit, you can still retire if you have your Coast FIRE number saved up and have other fail-safes in place (diversified investments, emergency savings, passive income streams).
What Are the Risks of Coast FIRE?
1. Not saving enough consistently
The biggest risk of Coast FIRE is that you might not reach your Coast FIRE number if you don’t save enough.
This is why it’s so important to ensure you’re saving as much as you can each month. I wrote another article with 12 saving money tips and How We Save 56% of Our Income as a family.
If you don’t think you can save enough, think of ways you can decrease spending and increase income.
One way you can increase your savings and investments is by mico-investing.
ACORNS is a popular platform that can round up money from purchases and automatically allocate those funds to diversified investments.
Another risk of Coast FIRE is that you might not be able to retire as early as you want. This is because it can take a long time to reach your Coast FIRE number.
If you’re not patient, you might get frustrated and give up on the whole idea, but the truth is that anyone can reach financial freedom through hard work and perseverance.
3. Lack of discipline and focus
When life gets comfortable, we tend to get lazy with finances. Once you hit Coast FIRE, life may seem easier, but it’s important to monitor all money decisions and transactions constantly. You cannot all of suddenly increase spending and get into debt.
This is especially true if you hit Coast FIRE and have passive income streams covering all expenses.
Just make sure not to miss anything with your finances and ensure all expenses are accounted for. If you own your own business, make sure you have the proper legal protection.
Flamingo FIRE And Coast FIRE Differences
For those who don’t know, Flamingo FIRE is where you work until you have saved up half or 50% of your FIRE number. Then you can semi-retire and let investments grow passively to retire within 10-15 years fully. Depending on your age, this could be less time coasting and more quickly hitting FIRE.
Flamingo FIRE is a great option for those who are okay with sacrificing longer to build up investments that reach 50% of their nest egg number.
Barista FIRE And Coast FIRE Differences
Barista FIRE is where you work part-time to collect health insurance benefits. It’s called Barista FIRE because Starbucks gives health insurance to those working part-time.
Many people in the FIRE movement work at Starbucks as baristas simply for health insurance benefits.
Healthcare costs can get out of hand, especially as you age. And if a good health insurance plan does not cover you, you could end up bankrupt.
So, Barista FIRE is an excellent option for those who want to ensure they’re covered by health insurance.
The difference between Barista FIRE and Coast FIRE is that you have a job. You’re still working, but the sole purpose behind your employment is health insurance and not much more.
In Conclusion
As with any FIRE strategy, there are risks and rewards. It’s essential to understand both before you decide if Coast FIRE is right for you. But if you’re looking for a FIRE strategy that doesn’t require much work and that you can do from anywhere in the world, Coast FIRE might be the perfect option.
As you look at the different forms of FIRE, you’ll find that each has its unique set of pros and cons. It’s important to understand these before you decide which form of FIRE is right for you.
Coast FIRE is a great way to semi-retire early and enjoy life without worrying about money. That’s what FIRE is all about. So, if you’re looking for an easy and stress-free way to join the FIRE movement, Coast FIRE might be right for you.
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
Debt has a way of getting out of hand quickly. The snowball effect can leave you feeling hopeless and like there’s no way out. But there are options available to help you get your debt under control and on a path to being debt-free. One option is debt settlement.
That’s what we’re going to talk about today. We’ll review debt settlement, its pros and cons, and if it suits you.
This post may contain affiliate links; please see our disclaimer for details.
What Is Debt Settlement?
Debt settlement is negotiating with creditors to settle a debt for less than the total amount owed. It is an option for people who struggle to repay their debts and face financial hardship. The goal of debt settlement is to reach an affordable agreement with the creditor to help the debtor get out of debt.
The process usually begins with the debtor contacting the creditor to express an interest in settling the debt.
The creditor will then review the debtor’s financial situation and determine if they are eligible for debt settlement.
If the creditor agrees to settle the debt, the debtor will negotiate an acceptable payment plan for both parties.
Debt settlement can be a good option for those struggling with debt, but it is important to remember that it will hurt your credit score.
Debt settlement is negotiating with creditors to settle debts for less than the full amount owed.
It’s a bankruptcy alternative and can be a way to avoid damage to your credit score. The process usually begins with a request for a “hardship letter,” which outlines your financial situation and why you can’t pay your debts in full.
Once the creditor agrees to enter settlement negotiations, you’ll make regular payments into an escrow account.
When there’s enough money in the account to make a lump sum payment, the debt settlement company will negotiate with the creditor on your behalf.
If an agreement is reached, the debt is considered “settled,” and you’ll be responsible for paying the agreed-upon amount. You may also have to pay the debt settlement company fees and the lump sum payment.
Before entering into a debt settlement, key factors include whether you can save enough money for a lump sum payment and whether you’re willing to damage your credit score.
Five key benefits of Debt Settlement
1. You can get out of debt without filing for bankruptcy.
Filing for bankruptcy should always be a last resort. Debt settlement can help you avoid bankruptcy and the long-term damage it can do to your credit score and financial future.
This is important because bankruptcy will stay on your credit report for up to 10 years, making it difficult to get approved for new lines of credit.
It can also make getting approved for a mortgage or car loan difficult.
2. You can save money with debt settlement.
When you settle your debt, you are only responsible for paying back a portion of what you owe. This can save you significant money, especially if you have a large debt.
The amount of money you save will depend on your debt and how much the creditors are willing to settle for. However, you can typically expect to save at least 50% of your debt.
Sometimes, creditors will even agree to settle for less than 50% of the debt. This is more likely if you have a large debt or can make a lump sum payment.
3. You can get out of debt faster with debt settlement.
Debt settlement can help you get out of debt faster than other options, such as debt consolidation or making minimum payments.
This is because you are only responsible for paying back a portion of your debt.
The amount of time it will take to get out of debt will depend on how much you have and how much you can afford to pay each month. However, you can typically expect to be debt-free within two to four years.
4. It’s possible to avoid damage to your credit score.
Unlike bankruptcy, debt settlement will not have a major negative impact on your credit score. Your credit score may not be impacted at all.
Debt settlement has a less negative impact on your credit score because it’s not reported to the credit bureaus as a negative mark. Instead, it’s reported as “paid in full” or “settled.”
5. You can get started without good credit.
One of the best things about debt settlement is that you can get started even if you have bad credit. This is because your credit score is not a factor in the decision to settle your debt.
This is beneficial because it means you can get started on the path to financial freedom even if you have a low credit score. It also means you won’t have to wait to improve your credit score before you can start working on getting out of debt.
Five key drawbacks of Debt Settlement
We just went through the benefits, and while they may be great, it’s essential to understand the drawbacks before deciding. So let’s go over them now:
1. Debt settlement can damage your credit score.
Although debt settlement doesn’t have the same negative impact on your credit score as bankruptcy, it can still damage your credit score.
This is because it will be reported to the credit bureaus as a negative mark.
2. Debt settlement can be expensive.
The fees associated with debt settlement can be expensive, sometimes costing as much as 20% of your debt. This is a significant amount of money, especially if you have a large debt.
Also, the fees are often charged upfront, so you must pay them even if the debt settlement process is unsuccessful.
3. Debt settlement can take a long time.
The debt settlement process can take a long time, sometimes taking up to two years. This is a significant amount of time, and it can be frustrating if you try to get out of debt quickly.
If time is of the essence, you may want to consider other options, such as debt consolidation or making minimum payments.
However, remember that debt settlement typically takes less time than bankruptcy.
4. Creditors may not agree to settle your debt.
There is no guarantee that creditors will agree to settle your debt. This is because they are not required to do so.
If the creditor does not agree to settle your debt, you will be responsible for paying back the full amount of your debt. This can be a significant financial burden, especially if you have a large debt.
5. You may have to pay taxes on the forgiven debt.
If you have debt forgiven through the debt settlement process, you may have to pay taxes on the debt. This is because the IRS considers the forgiven debt to be taxable income.
You’ll need to speak with a tax professional to determine if you will owe taxes on the forgiven debt. You might also want to consider this when deciding whether or not to settle your debt.
DIY Debt Settlement Vs. Hiring A Debt Settlement Company
There are two main options for debt settlement: DIY debt settlement and hiring a debt settlement company.
Both methods have pros and cons, and the best option for you depends on your situation.
DIY debt settlement can be an excellent option for those who are comfortable negotiating with creditors and have the time to devote to the process. However, it can also be risky, as there is no guarantee that you will be able to negotiate a settlement successfully.
Hiring a debt settlement company can provide peace of mind, as you will have professionals working on your behalf. However, it is vital to choose a reputable company, as there are many unscrupulous businesses.
In addition, debt settlement companies typically charge fees, so you will need to factor that into your decision. Ultimately, the best option for you will depend on your unique circumstances.
Here are the pros and cons of debt settlement and hiring a debt settlement company:
DIY Debt Settlement Pros:
It can be a less expensive option
You have control over the process
You can negotiate directly with your creditors
DIY Debt Settlement Cons:
It can be a time-consuming process
May not be successful in negotiating a settlement
It can be a risky proposition
Hiring A Debt Settlement Company Pros:
You have professionals working on your behalf
Can provide peace of mind
Typically charge fees
Hiring A Debt Settlement Company Cons:
You will have to pay fees
It is crucial to choose a reputable company
May not be successful in negotiating a settlement
Is Debt Settlement a Good Idea?
It all depends on your situation; no two situations will be exactly the same.
If you’re struggling to make ends meet and are at risk of defaulting on your debt, then debt settlement could be a good option. It could help you reduce your debt burden and get you back on track financially.
However, there are also some risks associated with debt settlement. For instance, if you’re not careful, you could owe even more money than you do now. And, of course, there’s always the chance that your creditors will refuse to negotiate with you or that you’ll be unable to reach a settlement agreement.
Debt settlement isn’t a silver bullet that will magically fix your financial problems. But, it could be worth considering if you’re struggling with debt and are willing to take on some risk.
Just be sure to research and understand the pros and cons before making any decisions.
You should consider whether or not you’re eligible for government programs that could help you with your debt.
For instance, the U.S. Department of Education offers several programs that could help you if you’re struggling to repay your student loans.
You can learn more about these programs by visiting the Department of Education’s website.
You can also find more information on debt settlement by speaking with a certified credit counselor.
Counselors can help you understand your options and can negotiate with your creditors on your behalf.
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
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