Money Musings 💭 The appraisal process 🏠

What you’ll find below:

Reflection: My home appraisal experience
Money Move: Put together your holiday budget now - you'll thank me later
You Gotta See This: Retirement jargon demystified
Reel of the Week: 3 important money conversations to have with a partner

A critical part of selling our home (ICYMI here’s the backstory) was the appraisal. During an appraisal someone comes in to check things out and tell you how much the home is worth.

If our home didn’t appraise for close to what the new owners were paying, the deal wouldn’t happen. For a certain value home, appraisals impact if buyers can get a mortgage and of what size. It’s a big deal.

Even though objective things like square feet and the number of bedrooms are an important part of the appraisal, I still wanted to make the place look nice for the more subjective piece.

As I tidied up and moved a lot of our stuff back into our neighbor's apartment I thought about how I’d be preparing differently if I were a Black person.

I thought about the advice Tiffany Aliche, The Budgetnista, shared in our interview for Financial Adulting. Remove photos of you and your family. Have a white person stand in for you for the appraisal, if possible.

Why?

Research shows the homes of Black and brown people are automatically devalued by 23%, which equates to $48,000 in equity per home, on average.

Tiffany says, “If you say my house is worth $48,000 less than it is, that’s $48,000 I don’t get to pass on to my heirs. Multiply that across all Black families and that’s $156 billion taken from the Black community. That’s a big part of the wealth gap.”

Here’s the other advice Tiffany gave for Black and brown homeowners.

Always get a second appraisal (which unfortunately costs money)
Get appraiser recommendations from Black or brown friends who recently had a home appraised
If possible, have a white person there during the appraisal
Bring the issue to the forefront and be upfront that you hope the appraisal is fair
Look at the details of the appraisal. Does the information in there make sense?

Don’t be afraid to be direct with the appraiser. If you think your home is worth a certain amount, tell them. Point out where you’ve made upgrades. If you’ve done your research and found the perfect comp, send it their way. You are helping your case and making their lives easier.

Have you ever been part of an appraisal process? What was your experience like? Hit reply and let me know. ↩️

P.S. If you have a money question for me, fill out this form! We're now doing a monthly audience Q&A! 🥳

MONEY MOVE OF THE WEEK

PUT TOGETHER YOUR HOLIDAY BUDGET.

For many of us, November and December are the most expensive months of the year. 😭 I know. There may be time off work for travel, holiday parties galore and/or gift-giving.

Here’s how to put together your holiday spending plan so you aren’t left stressed about money over the next couple of months.

Realize holiday spending isn’t just about gifts. Holiday spending can include travel, transportation, clothes (for parties), hosting friends and family, convenience spending (when you’re busy), host gifts, holiday bonuses, decorations and activities (like ice-skating).
Get clear on what matters to you. What about the holiday season is important to you and worth spending money on? What isn’t? Maybe you love hosting friends and family and get exhausted by too many holiday parties. Or maybe you want to take a weekend getaway but find holiday decorations a hassle.
Make a detailed spending plan. List out anything you plan to spend during the holidays that is outside of your regular spending. The more detailed the better. If you are getting four gifts, break them down by amount. For example, I’m getting four gifts for $40 each (here's last year's gift guide!).
The earlier you make your plan the better. Generally, the earlier we plan the less we spend. We might get the opportunity to take advantage of a sale or if you’re booking holiday travel, typically the earlier we book, the cheaper it is. With more time we also don’t have to rush through purchasing decisions.
Reevaluate for next year. Take the time to reflect how it all went. Did this help your spending feel less stressful? Were you in a better place come January? If you spent outside your plan or forgot something completely, what was it? While the next holiday season is over a year away, we can make our plan even better (and earlier) for next year AND these steps can be applied to any spending category or holiday.

In the press

**FOX 26 NEWS HOUSTON: FALL MONEY CLEANSE: WHY IT'S GOOD FOR YOUR FINANCES**

YOU GOTTA SEE THIS

DEFINE SOME KEY RETIREMENT TERMS.

Next week we’re kicking off our ‘Retirement Checkup Series. Before we do, let’s define some key terms that will make everything much easier to navigate.

DEFINE IRA. An IRA (individual retirement account) is a plan that you can open up on your own (without your employer). You can contribute up to $6,500 in 2023 (or $7,500 if you are over 50 years old). The deadline to contribute is the same as the tax deadline (typically April 15th).

DEFINE 401(K). A 401(k) is a company-sponsored retirement plan. If we have a 401(k) plan with our employer, we can elect to have a certain percentage of our salary taken out and contributed to this plan. You can contribute up to $22,500 in 2023 (or $30,000 if you are over 50 years old).

DEFINE 401(K) MATCHING. If your employer offers 401(k) matching, you will typically see it offered as a percentage of your salary – let’s say 3%. That means that if you contribute 3% to your 401(k), your company will match it (i.e., double it). If you contribute 4%, your company will still contribute 3%. If you contribute 1%, your company will contribute 1%. If you earn $75,000, your company match can total $2,250 (3%).

That’s a 100% return on your first $2,250 of contributions!

DEFINE ROTH VS. TRADITIONAL. Roth and Traditional are essentially tax designations that apply to 401(k)s and IRAs. With a Roth account you pay taxes now. With a Traditional account you pay taxes when you take the money out. In both accounts, the investments grow tax-free.

“Fun” fact: If your tax rate now is the same as your tax rate when you retire, there is no tax difference between what you will owe with a Roth and Traditional account. Cool, right? Yes, I know. My sense of cool is quite warped. 😂

Which is right for you? Read more here.

your weekly money wins

Here are all the amazing money moves you made this week 👏👏👏

Lisa: I've turned intentional indulgence into an external motivator to keep my ADHD brain on task! Every time I clear my to-do list I earn money toward a new frivolous purchase. First one arrives this week 🤗
Casey H: Started my own private practice for more money and more autonomy!
Kaitlin O: if there's a government shutdown, I have enough cash to miss a few paychecks. 😟
Shel B: In Sept I paid off my iPhone, put $ in my emergency fund & paid extra on my student loans!
Christi M: Spent less during vacation than budgeted and decided to throw that back in savings!
Paige S: Didn't get a new iPhone (because I'll lose my wordle streak)
Emily: Moved some money into an investment account and also opened an HYSA
Emily L: Meal-prepping and freezing things to save $$
Kerri M: I created a budget for the first time in my life AND I'm on track to max out my 401K

Share your wins here! 🥳