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How to Finance a Tiny House

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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The tiny home movement has been garnering attention online and captivating the media in recent years. As people seek to minimize their expenses and living space to enjoy other areas of life, tiny houses become a viable option. While purchasing a tiny home may sound appealing, there are many factors to consider before downsizing and joining the movement.

We will walk you through different options on how to finance a tiny house, discuss different types of small dwellings, and talk about the pros and cons of living in a tiny home.

What is a tiny home and how much does one cost?

Tiny homes can vary in structure, makeup and size, but they are typically 600 square feet or smaller, according to Tiny Home Builders. For comparison, the average American single-family home is 2,392 square feet, according to the Census Bureau.

Tiny homes can vary dramatically in price. Depending on the location of the home, the materials used to build your tiny home or the selling price of a furnished small dwelling, prices can range from $15,000 to $100,000.

For example, if you decide to DIY (do it yourself) your tiny home, you can expect to pay anywhere from $15,000 to $20,000 in supplies, plus the time and effort it takes to build it. Should you purchase a completed shell from a tiny home vendor such as Tiny Home Builders, you can expect to pay up to $61,000. And tiny houses on the market can exceed $75,000.

While these prices may seem hefty for a tiny home, keep in mind that the average cost of a new home in the U.S. is $395,000.

4 tiny home financing options

Typically, would-be homeowners get a home mortgage to finance the purchase of their house. While some types of tiny homes qualify for a traditional mortgage, others do not.

So, what are your financing options? Here are four financing options to consider as you aim toward purchasing your own tiny home.

1. Home mortgage

Obtaining a traditional mortgage may be difficult for a tiny home because most lenders require a minimum loan amount, which tiny homes often do not meet.

“The bigger issue is probably the appraisal,” said Mitch Mills, lending manager at Sugar House Mortgage in Salt Lake City. “An appraiser is tasked with arriving at a valuation for a property based on recent sales of like properties. In other words, an appraiser would need to be able to find other tiny homes that have sold in the same market area, ideally within the past 90 days.”

To qualify for a home mortgage, the home must be on a traditional foundation.

“Fannie Mae, Freddie Mac and [the Federal Housing Administration] require a property to be situated on a permanent foundation and connected to public utilities. Some of the tiny homes I’ve seen are on wheels, and this would preclude them from being eligible for traditional financing,” Mills explained.

If the tiny home meets size requirements, is traditionally built and is on a permanent foundation, you may be able to acquire a traditional home mortgage. To compare mortgage rates, check out this tool by LendingTree, which owns MagnifyMoney.

2. Home equity line of credit

A home equity line of credit, also called a HELOC, is a type of secondary loan secured by a lien junior to a mortgage. Using a HELOC is another way to finance the purchase of a tiny home.

As you pay down a mortgage, you are building equity in your home. When you use a HELOC, you borrow against the equity you’ve built to secure your secondary loan. For example, if you purchased a $1 million home and have paid off $500,000, you have that much in equity. Using a HELOC, you could get a second mortgage for a specified amount and use that money to purchase your tiny home.

3. Recreational vehicle loan

Some tiny homes are on wheels, making them portable. If they are roadworthy and certified by the RV Industry Association, they may qualify for a recreational vehicle, or RV, loan. LightStream, a division of SunTrust Bank, offers financing up to $100,000, which can  be used for your tiny home purchase.

4. Personal loan

The fourth financing option for a tiny home is a personal loan. A personal loan is an unsecured loan that you can use for any purchase. Once obtained, you can use the borrowed funds for any item, such as a tiny home. Using a personal loan to finance a tiny home can be a good option because you won’t have to get your home appraised or approved to qualify for the loan, allowing you to purchase a tiny home with a foundation or one on wheels.

Personal loans may also be a smart way to finance your tiny home because you can usually borrow up to $50,000 depending on the lender. More information on personal loans to come.

3 personal loan lenders offering tiny home financing

If you choose to finance your home using a personal loan, here are three lenders that offer tiny home financing.

1. LightStream

LightStream offers personal loans that can be used for financing a tiny home. It offers a fixed-rate loan with no fees or prepayment penalties.

  • Terms of loan: 24-84 months
  • APR range: 4.99%–16.79%
  • Origination fee: No origination fee
  • Loan amount range: $5,000–$100,000
  • Credit score required: 0 minimum
APR

4.99%
To
16.79%*

with AutoPay

Credit Req.

Not specified

Terms

24 to 144*

months

Origination Fee

No origination fee

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure

LightStream is the online lending division of SunTrust Bank.... Read More


*Your APR may differ based on loan purpose, amount, term, and your credit profile. Rate is quoted with AutoPay discount, which is only available when you select AutoPay prior to loan funding. Rates without AutoPay may be higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 4.99% APR with a term of 3 years would result in 36 monthly payments of $299.66.

2. SoFi

SoFi offers personal loans ranging from $5,000 to $100,000, which would allow you to purchase a tiny home. SoFi offers unemployment protection, making it a unique lender. Should you lose your job with no fault of your own, the lenders will allow you a payment grace period and connect you to job placement services so that you can get back on your feet.

  • Terms of loan: 24 to 84 months
  • APR range: 5.99%–18.64% (Fixed)
  • Origination fee: No origination fee
  • Loan amount range: $5,000–$100,000
  • Credit score required: 680 minimum
SoFi
APR

5.99%
To
18.64%*

Credit Req.

680

Minimum Credit Score

Terms

24 to 84

months

Origination Fee

No origination fee

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure

SoFi offers some of the best rates and terms on the market. ... Read More


Fixed rates from 5.99% APR to 18.64% APR (with AutoPay). SoFi rate ranges are current as of March 27, 2020 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your creditworthiness, years of professional experience, income and other factors. See APR examples and terms. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

3. LendingClub

LendingClub is another lender that offers personal loans. Because you can use a personal loan for any reason, it can be used toward your tiny home.

  • Terms of loan: 36 or 60 months
  • APR range: 6.95%–35.89%
  • Loan amount range: Up to $40,000
  • Credit score required: Not specified
APR

6.95%
To
35.89%

Credit Req.

Not specified

Terms

36 or 60

months

Origination Fee

1.00% - 6.00%

SEE OFFERS Secured

on LendingTree’s secure website

LendingClub is a great tool for borrowers that can offer competitive interest rates.... Read More

What to consider before financing a tiny home

Now that you know your financing options, it’s time to consider if owning a tiny home is the right decision for you. Before moving forward with a new lifestyle of tiny living, consider the pros and cons of owning and living in a tiny home.

Pros of living in a tiny home

Tiny homes can be less expensive than a standard home. For those who don’t want to rent and wish to avoid the large expense of a standard-sized home, tiny homes can be a great option. Opting for a tiny home allows you to cut back on expenses typically associated with homeownership. While you’ll still have to pay for your tiny home upfront, plus utilities and basic living expenses, they will likely be much less compared to a traditional homeowner. Owning a tiny home allows you to feel the pride of homeownership without the financial burden.

Tiny homes can offer financial freedom. Because your mortgage or loan payment will likely be less than a traditional mortgage, you’ll likely have a surplus of discretionary income to spend, giving you financial freedom. If you wish to spend your extra money traveling, pursuing higher education, or investing, owning a tiny home can offer financial freedom.

Tiny homes can provide more free time. With 600 square feet or less, you only have so much space to clean and upkeep. Because you’ll spend less time cleaning your home and doing yardwork, you’ll have more time to enjoy other hobbies. Tiny homes can provide more free time in which you can enjoy life and the things you like to do with it.

Tiny homes can be portable. Homeownership may appeal to you, but you don’t want to be tied to one location. And you don’t want to rent. Because tiny homes can have wheels, you have flexibility. You can settle wherever you like, permitting zoning laws. If you have wanderlust and wish to explore the country without living out of a suitcase, owning a mobile tiny home is a great option that allows you flexibility and movement while still enjoying the stability and comfort of homeownership.

Cons of living in a tiny home

Tiny homes can be hard to place. Because zoning laws vary city to city and state to state, you cannot place your tiny home anywhere you’d like. Flexibility is a double-edged sword. Tiny homes allow you to take your home anywhere, but you’ll have to make sure you’re moving to a place where it’s legal to place your tiny home. Sometimes, the location you desire may not allow for tiny homes.

Tiny homes can be cramped. Tiny homes are, in fact, tiny. That being said, if you wish to entertain guests, space will be very limited. Also, if you are looking for some privacy in a secluded space, your options are sparse since your space is so small. If the thought of lack of privacy gives you anxiety, tiny homes may not be right for you.

Tiny homes don’t have all the amenities of a traditional home. Depending on your tiny home, you may not have certain amenities such as laundry machines, dishwashers or a full-size refrigerator. While this may be a perk of simplifying, it can also frustrate some potential owners. When purchasing your tiny home, ensure it has all the features you need.

Which type of tiny home do you want?

Do the pros of owning a tiny home outweigh the cons? If so, let’s briefly discuss the different kinds of tiny homes available.

  • Tiny traditional homes: Think your typical house but shrunk down to a smaller version. Tiny traditional homes will have a foundation and will be made of the same building materials, such as wood, plywood and concrete. They are not mobile and do not have wheels.
  • Tiny house on a trailer: Simply put, this is just a tiny house on a trailer. It can be moved from location to location when pulled by a truck. Like a traditional tiny home, they are usually built out of normal building materials.
  • Converted storage shed: A storage shed is usually made of steel or galvanized aluminum, but a converted storage shed can be used as a type of tiny home. To make it feel more like a home, owners can install insulation and drywall and design the inside just as they would an apartment or home.
  • Container home: A container home is a storage unit or semitruck shell transformed into a living space. Once revamped, designed and decorated, it doubles as a home for minimalists.

Does your city permit tiny homes?

The last thing to consider before purchasing a tiny home is where you’ll put it. Each city and state has different building codes and zoning laws that can affect where you are legally allowed to place your tiny home.

Some states require the tiny home to be an accessory dwelling unit (ADU), meaning it is on the same property of a traditional home. But some states have begun adopting the idea of tiny housing and have made it more realistic for tiny homeowners to build and live in the state outside of an ADU. These states have more progressive regulations making it easier for tiny house hunters: California, Colorado, Florida, Massachusetts, Michigan, New York, Oregon and Texas.

The American Tiny House Association has compiled state-by-state information regarding zoning laws and construction codes for tiny houses. Check out the complete guide to see if owning a tiny home in your city is possible.

The tiny home movement is gaining popularity and offers a variety of perks for people looking to minimize, downsize and enjoy a flexible lifestyle.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Plastic Surgery Financing: 7 Ways to Pay for Your Procedure

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

If you’re considering a surgical cosmetic treatment, you may have found that plastic surgery doesn’t come cheap. When paying cash isn’t an option, you may need to consider financing the surgery. That could look like a medical loan, medical credit card, home equity line of credit or 401(k) loan, among other methods. However, you should consider all your options before taking on a large debt or pulling money out of your investments.

Does insurance cover plastic surgery?

Before you consider how to pay for plastic surgery, first get an estimate of how much the procedure will cost, along with follow-up treatments, office visits and other expenses, such as medications. Then, contact your health insurance company to see what your policy covers. How to get your insurance to pay for plastic surgery will depend on the policy, the procedure and whether it’s medically necessary. The insurer will let you know whether you’re partially or fully covered.

How to finance plastic surgery

Medical loan

Medical loans are personal loans by another name. Banks, credit unions and online lenders offer these types of loans, which come with fixed annual percentage rates (APRs) and terms ranging from 12 to 60 months or longer.

When you’re approved for a personal loan, you’ll receive the full amount of the loan upfront and then repay it in equal monthly installments. APRs usually range from around 5% to 25% or higher, depending on your credit and the lender. Loan amounts can range from $1,000 to $50,000 or more.

Most personal loans are unsecured, meaning you won’t need to pledge collateral during the application process. Your creditworthiness is typically the main factor for qualifying for the loan.

What to watch out for: Make sure you understand your loan term, APR, and total monthly payment, and whether the loan comes with any fees, such as prepayment penalties or origination fees. Also, keep in mind that a hard credit inquiry, typically done during the loan application process, may temporarily lower your credit score by a few points.

Medical credit card

A medical credit card is another option for paying for plastic surgery costs not covered by your health insurance, and they work like traditional credit cards. Some examples include the Wells Fargo Health Advantage® Card, the CareCredit Card and the Alphaeon credit card. (Note, however, that not all credit card issuers offer a medical credit card, and they aren’t the same as HSA or FSA cards.)

You get a card with a preset line of credit and APR that you can use to charge your medical bills to the card, then you can either pay off the balance or make monthly payments. Ask the card issuer whether it offers different types of monthly payment plans.

Typically, you can only use medical credit cards within a specified network of health care providers.

What to watch out for: You should understand the terms and how interest is charged before using a plastic surgery credit card. For example, a CareCredit Card for plastic surgery offered (at time of writing) a promotion in which cardholders wouldn’t pay interest on purchases of $200 or more. Cardholders needed to select a repayment option of six, 12, 18 or 24 months, and pay the amount due by the end of the promotional period. But if they didn’t pay their entire bill off within that time, interest was charged from the original purchase date at an APR of 26.99% variable for new accounts.

0% Intro APR credit card

Credit cards are another plastic surgery financing option. Depending on your credit limit, you may be able to cover some or all of your procedure with a traditional credit card. The major factor to consider is the card’s APR. The average credit card interest rate is 16.88% nationwide, but some credit cards come with a 0% introductory APR. These intro periods typically last about 12 to 21 months, and if you qualify, you’ll pay no interest during the intro period.

What to watch out for: These cards usually have deferred interest, meaning interest accrues but you don’t have to pay it during a certain time frame. For example, let’s say your 0% intro APR lasts 12 months. Interest will accrue on all the purchases you make during that time. If you pay off the balance in full during the intro period, then you won’t pay any interest on purchases you made. But if you haven’t paid off your purchases in full, then you’ll owe interest on all the purchases from the previous 12 months. Plus, the interest rate will reset to the regular APR.

Payment plan

Some plastic surgeons do payment plans, or offer in-house options for financing plastic surgery. These can vary in detail and scope, however, so it’s best to check with your doctor’s financing office to see what options may be available. For example, you may need to provide a down payment or pay a preset amount each month. Plastic surgery payment plans may be a good option for people with bad credit, as you may be able to set up a plan without a credit check.

If the medical provider doesn’t already offer an in-house payment plan, then you can propose a plastic surgery payment plan of your own. Just keep in mind: Your doctor doesn’t have to accept your proposal. Take the estimated cost of the procedure, figure out how much you can put toward the amount each month and calculate how long it would take to pay off the debt. If the medical provider accepts the proposal, then get all details in writing before going under the knife.

What to watch out for: Ask the medical provider whether it will charge a fee or interest, and what happens if you fall behind on payments.

Home equity line of credit

With a home equity line of credit, you borrow from the home equity you’ve built, which is the market value of your home minus your mortgage balance.

Here’s how they work: Lenders will generally let qualified applicants borrow up to 80% to 90% of their home value. Once approved, you can draw from the account during a time frame known as the “draw period.” You may pay off the balance and borrow again from the line of credit, paying interest only on the amount borrowed, during this time frame. The draw period is followed by a repayment period, in which you can no longer utilize the line of credit and must repay any balance you have on it.

What to watch out for: The fact you’re securing this loan with your home could spell trouble if you fall behind on payments. If you default, you could potentially lose your home — a concept that seems troubling for any surgery, but especially a voluntary cosmetic procedure.

Home equity loan

A home equity loan also allows you to borrow against the equity you’ve built in your home. It’s different from a HELOC, in that you receive a lump sum of money upfront, then repay the loan in fixed monthly installments with a fixed interest rate over time. Lenders typically allow qualified homeowners to borrow up to 85% of the home’s value.

What to watch out for: Like a HELOC, you’re securing the home equity loan with your home. If you miss several payments, the lender may foreclose on your home.

401(k) loan

Some 401(k) retirement savings plans allow participants to borrow against their balances. If you borrow from a 401(k), you’ll receive a lump sum of money and repay it, with interest, within a set time frame of five years, as regulated by the Internal Revenue Service (IRS). According to the IRS, you may borrow the lower amount of either a) $10,000 or 50% of your vested account balance (whichever is greater) or b) $50,000.

What to watch out for: Taking money out of your retirement account will likely set your retirement goals back, as your money wouldn’t be growing in investments.

Plastic surgery financing for bad credit

Personal loans

Some personal loan companies are willing to work with people with poor credit. The following lenders are listed on MagnifyMoney’s marketplace and typically offer loans to people with lower credit scores.

 


LendingPoint

Learn more


Peerform

Learn more


Upstart

Learn more

APR range

9.99% to 35.99%

5.99% to 29.99%

6.53% to 35.99%

Loan terms

24 to 48 months

36 or 60 months

36 & 60 months

Loan amount

$2,000 to $25,000

$4,000 to $25,000

$1,000 to $50,000

Origination fee

0.00% - 6.00%

1.00% - 5.00%

Up to 8.00%

Minimum credit score requirement

585

600

620

What to watch out for: As personal loans typically don’t require collateral, your credit and financial situation will be heavily weighed in determining your loan eligibility and terms. If you have bad credit, that means you could face high double-digit or even triple-digit APRs.

Secured loans

If you have fair or poor credit and can’t qualify for an unsecured loan, then you may consider a secured personal loan. A secured personal loan allows you to borrow money using some form of collateral, such as a savings account or car, which protects the lender in case you default on loan payments.

What to watch out for: If you fall behind on payments, you risk losing your collateral. The lender may also report any delinquent payments to the credit bureaus, which can damage your credit scores. Weigh the benefits, drawbacks and loan terms before choosing a secured loan.

Average costs for plastic surgery

Plastic surgery costs can vary greatly, depending on the procedure and the doctor. In 2018 alone, Americans spent more than $16.5 billion on more than 17.7 million cosmetic procedures, according to a report from the American Society of Plastic Surgeons. Here’s what some of the more common procedures cost:

4 things to consider when financing plastic surgery

  • APRs: Unless you have a 0% intro APR on your plastic surgery financing and can pay off your balance during the introductory period, you’ll want to consider your total cost of borrowing. Your APR is a great measure of that.
  • Fees: Some common fees associated with plastic surgery financing include prepayment penalties, origination fees and late payment fees. Before signing on the dotted line, ask the lender whether the loan comes with fees — and how to potentially avoid them.
  • Budget: Before applying for financing, make a budget. Ask the medical provider for a full written estimate, then figure out whether you can cover any of it with health insurance or cash savings. Borrowing only the amount you need may help you avoid debt and save on interest costs.
  • Eligibility requirements: Lenders typically check that you can repay the loan per the agreed terms. They’ll do this by checking your credit history, income and other debt payment obligations. Remember that these credit checks may have a negative effect on your credit score.

Be sure to carefully weigh the pros and cons of plastic surgery financing. Plastic surgery can cost thousands of dollars. The expense should not be taken lightly.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Women Still Do More Housework Than Men, Contributing $10K+ in Value Annually

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

When you finally get home after work, the last thing you want to do is clean last night’s dirty dishes. But the reality is that many Americans spend their evenings, and even weekends, doing chores. While you may consider hiring a professional to help around the house, doing your own chores can save you thousands of dollars every year.

Using data from the Bureau of Labor Statistics (BLS) on occupational earnings and how much time Americans spend on different chores, we were able to estimate how much it would cost to pay a professional to do those chores instead. We also found that, compared with men, women contribute over $3,000 more in value each year when it comes to unpaid labor at home.

Key findings

  • The average American saves about $9,022 annually by doing their housework themselves instead of choosing to pay a professional to do the same tasks.
  • There is an enormous difference in annual savings between men and women. The average woman’s time spent on chores is worth $10,755, compared to $7,420 for men.
  • Americans spend an average of 107 minutes per day on household activities, including cleaning, food preparation and minor home repairs. When broken down by gender, men spend roughly 82 minutes per day on household activities, and women spend 130 minutes per day on average.
  • We can then multiply these numbers across every woman and man over the age of 15 to calculate the replacement value of household chores in the United States: $1.5 trillion for women and $964.4 billion for men.
  • The largest chunk (and value) of Americans’ time is spent cooking. If we assumed your time spent on cooking was replaced with that of a professional chef, the average American’s time spent cooking is worth $2,856 per year.
    • Again, there is a large disparity between annual savings for men versus women. For women, the average savings on cooking is $3,872, while for men, it’s $1,791.
  • The second-biggest time sink of household chores is general cleaning, such as laundry and tidying up. The average woman spends 50 minutes per day cleaning, while men spend just 14 minutes daily. Replacing that labor with professional cleaners costs about $13.26 per hour.
    • Over a year, the replacement value of that labor is just over $1,037 for men but $3,746 for women.

Women contribute much more value, time to housework than men

Each year, women contribute $10,755 worth of housework. Men contribute $7,420 annually, a difference of more than $3,000. This is an interesting component of the gender wage gap, because unpaid housework can affect a woman’s earning power, as noted in a recent study published by the Luxembourg Institute of Socio-Economic Research. Put simply, women doing more of the free labor at home means that they have less time for paid labor outside the home (or at least less downtime).

Most activities aren’t daily, but the minutes add up

BLS data indicates that women spend an average of more than two hours each day doing housework — men spend just under an hour and a half doing these types of chores. See how many minutes per day men and women spend doing typical household chores:

Men add value through contributing labor to high-value tasks

Although men spend much less time than women doing housework on average, they handle many of the highest-paying tasks, such as car repairs and handyman work.

The three highest-paying chores — car repairs, interior and exterior maintenance and home appliance repairs — are in male-dominated verticals. Were a professional to handle these tasks instead, they would make the following hourly rates:

  1. Automotive service technicians and mechanics: $21.02
  2. Painters, construction and maintenance: $20.70
  3. Home appliance repairers: $19.72

On the other hand, women commit more time to the three lowest-paying jobs, including interior cleaning, animal and pet care and food preparation and cleanup. Professionals in these industries earn the following hourly wages:

  1. Maids and housekeeping cleaners: $11.84
  2. Non-farm animal caretakers: $12.45
  3. Restaurant cooks: $13.26

Cooking accounts for the most time spent and value earned

Americans spend 35 minutes per day on average preparing meals. Women spend more time cooking than men, at 48 minutes and 22 minutes, respectively; this time includes food preparation, as well as cleanup. According to the BLS, restaurant cooks may order supplies, plan the menu and prepare the food, making this the most comparable occupation, with an average wage of $13.26 per hour.

This means that, on average, Americans save $2,856 annually by cooking their own food, rather than paying a professional for this task.

Americans as a whole save trillions by doing their own chores

Unpaid housework isn’t included in our country’s GDP, but that doesn’t mean it’s not valuable. Americans save thousands each year by taking housework into their own hands. Annually, the completion of household chores translates to trillions of dollars in value that’s not accounted for.

American women aged 15 and older save an estimated $1.5 trillion each year by doing housework themselves rather than outsourcing the same tasks. Comparatively, American men who are 15 and older save a total of $964.4 billion. That’s a total of $2.4 trillion in value between men and women.

When housework becomes too much, budget for a professional

While doing household work yourself can translate to serious savings, chores shouldn’t get in the way of your personal or professional development. If you’re one of many Americans spending hours each day toiling away on housework, it may be time to bring in professional help.

Here are some ways to make the cost of outsourcing household chores better fit into your budget:

  • Try the 50/30/20 budget: Under this budgeting rule, you’ll put 50% of your income toward “needs” (this includes mortgage, groceries, utilities), 30% toward “wants” (cellphone bill, gym membership, dining out) and 20% toward savings and debt repayment. If you can, allocate a housekeeper or landscaper into your wants budget.
  • Refinance your car or house: You may be able to secure a lower interest rate on your auto loan or mortgage by refinancing. Lower monthly payments would allow you to make room in your monthly budget to afford help at home. Borrowers with excellent credit will get the best interest rates, while subprime borrowers will see higher interest rates. Refinancing is generally a great option when you can secure a lower interest rate than what you’re already paying.
  • Consolidate your debt: If you’re making significant payments toward multiple debts, it can freeze up a lot of your income. You could consider consolidating debt at a lower interest rate with a personal loan so you can develop a set budget and free up cash each month.

Methodology

To estimate the value of American’s household chores we first looked at how much time they spent doing each activity. The BLS compiles this data through the American Time Use Survey.

We then estimated how much it would cost to replace this labor with that of a professional. For example, we replaced cleaning with occupation maids and housekeeping cleaners, food preparation with chefs and animal and pet care with nonfarm animal caretakers.

Next, we multiplied the daily hours spent on each activity by the hourly earnings for people who do that work professionally. That gave us the daily replacement value of household chores. We then multiplied that number by 365 to get the annual value. To find the total country value, we multiplied the annual value by the population over the age of 15.

Data for time spent on activities and hourly earnings of professionals comes from the Bureau of Labor Statistics. The number of men and women over the age of 15 comes from the Census Bureau. All data is from 2018.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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