The Benefits of an Emergency Fund

canstockphoto0465459For most of us, an emergency fund is something we chalk up to “building later, when I have more money.” And, while the need to keep your bills paid and to pay down debt as quickly as possible is certainly understandable, one of the fastest ways to find yourself mired in new debt is to be hit with an emergency that you are not prepared to cover. Financial emergencies like medical bills, car repairs, and the like are rarely cheap.

In addition to the actual money you’re saving when you build an emergency fund, you are also building something much less tangible: peace of mind. When the financially unprepared are hit with an expensive emergency, they tend to panic and reach out for whatever funding they can find, hang the cost and the terms and the consequences.

According to Max Lend, a company that specializes in online installment loans, many of the payday loan lenders out there are “debt traps” meaning that, because of shady schedules and wicked high-interest rates, you’ll often end up trapped in a cycle of taking out a payday loan to pay off a payday loan. This is why alternatives like installment loans, if you need them, are the better option if you’ve exhausted your other financial options.

Of course, prevention is the best form of preparation so let’s talk about different things that you can do to help build an emergency fund.

Two Approaches

There are two basic approaches to an emergency fund. One is to save as much as you can afford from your paycheck each payday. The other is to find a way to earn more money and put your earnings from that into your emergency fund. They both have their advantages and disadvantages.

Saving As Much As Possible

Perhaps the hardest thing about saving money is remembering not just to make the transfer from your checking to your savings account but to keep your hands off of that account so that it has time to grow. And, if you’re already strapped for cash, finding the room to save even 5% of your paycheck can feel like a huge burden.

One of the best ways to circumvent these issues is to use direct deposit. Set up your direct deposit so that a portion of every paycheck gets deposited directly into your savings account. This way it will feel more like you never had that money to spend in the first place and takes away the pressure to put off making the transfer. It also adds incentive to go over your budget and look for ways to save on your current spending, like shopping at thrift shops instead of department stores, buying generic instead of name brand, cutting Hulu and Netflix, etc.

If this feels like too much of a burden (and you won’t get any judgment from us if it is, we’ve all been there before), consider an escalating savings method. This is where you start saving manually with a very small amount, like a dollar. Then you double that the next week to two dollars, four the next and so on. This gets you in the habit of spending and gives you time to redo your budget and look for other ways to save.

Earning More Money

Perhaps the easiest way to do this is to offer to be the go-to overtime person at your current job. This saves you from having to hunt down a second job or side gig and goes a long way toward building respect with your employer.

If there is no overtime to be had, or if it is very sporadic, you might try finding a side gig. There are plenty of them out there that really do work around your existing schedule. Driving for Lyft or Postmates, for example, lets you sign in and out whenever you want or need to work. As you search for these gigs, though, be careful: there are a lot of scams out there that will promise you easy money but are often pay-for-play operations (never pay to work) or that pay such tiny sums for the amount of work required that they really aren’t worth it. There are quite a few really great articles about good side gigs. Read through a few of them to get some ideas.

What matters most is that you get into the habit of saving now, before you have to. It’s much easier to set up a savings plan now, while you’re calm and in planning mode than it is to find a large sum of cash when you are panicked and pressed for time. We promise!

In Finance, Start as you Intend to Go On

canstockphoto9895017When you are just starting out on a career you can be forgiven for getting your monthly pay check, your sign of financial independence, and treating yourself to something you couldn’t afford as a student or before you had started working. It is important not to spend too much without giving some thought to the bills you may have to face in your new-found independence. Certainly you have a career ahead of you to recover from financial mistakes you make but surely it is better to avoid them in the first place?

Managing your finances may not seem too important in your 20s but it is good to develop good habits when you are young. Some parents even teach their children the value of money from a very young age, asking them to do a small chore to earn their allowance or save a little each week to buy something they want. Those children in their 20s will certainly have a financial plan so why shouldn’t you?

Your Student Loan

You can defer it but why should you? You will have to pay it in the end and what makes you think money will get easier in the coming years when you may want to buy real estate or start a family, perhaps both? Student loans may be regarded as good debt but it is still debt.

Start a 401(k)

The problems of retirement currently are being written about every day; the number of retired people who have insufficient in their retirement account despite having worked all of their adult life. It is up to individuals to save for retirement; Social Security benefits were never designed to do other than support retirement and the System is actually under threat due to insufficient funds.

The 401(k) has replaced guaranteed company retirement pensions. Employers will contribute up to a certain level so you should open an account and pay enough in each month so ensure you get all the ‘’free money’’ that an employer will contribute.

Even if you save just $50 a month in your early 20s you will have $125,000 at 65 with a fairly conservative growth rate of 6%. You are doubling your money every 10 years so if you delay until your early 30s then your account will have little more than $60,000.

Credit Card Debt

Students often use a credit card to subsidize student life. The danger is building up balances by only paying the minimum the card companies need each month under their terms and conditions.  The interest rate is high, much higher than online lenders do credit check and charge on personal loans. They should be used to pay off those balances with the cards then just used for convenience with the statement paid in full in the future.

Accommodation

You should try to have a plan but be flexible. Work may take you to a new city so there is rent to pay. Some stay at home while others share apartments. The ultimate aim may be to buy real estate because that is a medium to long term way to increase your assets. The main thing to remember is that you should never overextend yourself. You don’t suddenly need an expensive penthouse to yourself so put a limit on the housing costs you will face each month.

Your Credit Score

This score is a reflection of your financial history good and bad. Negative entries harm your score and any time you are late with a payment that is negative. If you have a poor debt-credit ratio, too much debt and too little available credit that will be picked up as well. Your credit score is used to judge your suitability for some forms of loans, especially mortgages but may also be a factor when you apply for a job. A good credit score should guarantee you get a competitive rate of interest on future loans rather than pay an extra point or two because your record is poor.

Financial Management is mostly common sense, that and some self-discipline. There will always be competing demands for your pay check but you start off right and put something aside each month to secure your future.

0% Car Finance – How to get the best deals

canstockphoto4363649The car finance sector is currently booming. With more people warming up to the idea of purchasing a car and paying for it in monthly instalments, the time has never been better to buy a vehicle on finance.

Whereas in the past buying a car with cash was your only option, today there are many deals available out there. This is why it’s crucial that you choose the right one in order to truly get the most out of your new car.

If you have made the decision to purchase a new car, you have probably done your fair share of research. This is great, as the more informed you are about the process, the better the odds are of you having a successful experience. Don’t worry if you aren’t too familiar with the process, as we all have to start somewhere.

Familiarising yourself with how car finance works is a great starting point. It allows you to learn more about what’s expected of you and gives you an idea of what options are out there.

It’s important that you manage your expectations throughout the process. For example, if your credit is poor you will still likely be considered for finance; however, there are going to be certain limitations. Finding the right service based on your circumstances is therefore crucial.

Let’s assume that you’re looking to purchase a car on finance, but haven’t encountered the process before. A great place to start is by doing some preliminary research and determining your situation. Work out a budget to learn how much you can spend each month, and start looking at cars you are most interested in.

Be very cautious about the vehicles you look at. If your budget is quite low and you’re after a sports car, the odds are you won’t get approved for finance. Being realistic is a huge part of taking on such a serious commitment, so keep your expectations at bay.

Once you have grasp of the basics, you can start looking for the right finance provider. Don’t rush the process, as it will only end up being more confusing than it has to be. Instead, take your time and shop around to find the best deals that suit your personal situation best.

There are hundreds of finance providers available out there, so make sure that the one you go with first your needs. Some specialise in luxury cars, for example, so if this isn’t something you’re after, don’t apply for finance with that particular provider.

People often make the mistake of applying with as many providers as possible in hopes of getting approved. This can seriously damage your credit score however, so it shouldn’t be attempted. Be smart and go about it the right way, and your experience will be a lot more enjoyable and satisfying.

It can be difficult to keep yourself focused, when you really just want to get on with it, but taking your time is crucial. Don’t rush the process and you will encounter less problems along the way.

0% Car Finance – Fact or Fiction?

0% car finance seems to be a frequent topic of conversation at the moment. People are after the best deals on the market, so of course they’ll jump on the opportunity of not paying any interest.

Although such deals are available out there, instead of trying to seek them out, one should put more effort on trying to find a car finance provider that suits their personal needs, which is something we’ve already established.

There are hundreds of appealing deals out there, you just have to know where to look. Instead of settling for the first provider you encounter, shop around and take your time to find the most appealing deals possible. Sometimes it’s going to take you a while to find what you are looking for but patience is a must! Don’t let your emotions get the better of you during the process. Remain realistic, take your time and the best deals will emerge.

Buying a new vehicle doesn’t have to be a struggle. There are many factors that need to be considered, but there is no reason why you shouldn’t be able to enjoy the best deals out there.

0% car finance has become somewhat of a myth. People are under the impression that it’s impossible to get such a good deal without there being a catch. A little research will reveal however, that it’s possible to purchase a car with 0% interest. All it takes is a little effort and snooping around.

At Trusted Car Credit, we offer extremely appealing rates for anyone looking to buy a car. Whether you’re a first-time buyer or a previous car owner, we will do our best to help you get the car you’ve always wanted. Our team work around the clock, looking for new opportunities and deals.

All you need to do to get started is fill out our quick and easy online form and one of our guys will get in touch shortly thereafter. Whether it’s a sports car or a large SUV that you’re after, worry not as we cater to a variety of needs and circumstances.

Get in touch today and come one step closer to owning your dream car. Buying a new vehicle has never been easier, so what are you waiting for?

What You Should Know About Reverse Mortgages

canstockphoto7870503Have you been thinking about paying off your mortgage and you’re over the age of 62? Consider getting a reverse mortgage. Reverse mortgages are a way to pay off your current mortgage plus a few added benefits such as supplementing your income or paying for healthcare expenses. This type of mortgage will allow you to convert a portion of the equity in your home into cash without giving up your home.

If a reverse mortgage sounds right for you need to know that there are several types of reverse mortgages available. Below is an explanation of each one to help you decide which type is best for you.

Single-purpose reverse mortgages– These types of mortgages are the cheapest option. They are usually offered by state and local government agencies however not all states have this type of mortgage. Nonprofit organizations also have these mortgages but again they are not available everywhere. A single purpose mortgage can be used for just one purpose which the lender usually specifies. Let’s say a lender states the loan can be used home improvements or repairs or even property taxes. Homeowners that have moderate to low incomes will qualify for this loan.

Proprietary reverse mortgages-These loans are backed by the same companies that develop them. If your home has a high market value you may be able to get a bigger loan advance with this type of mortgage. So if your home has been appraised at a higher value and your mortgage is small, you may be able to qualify for more funds.

Home Equity Conversion Mortgages-These loans are also known as HECMs and are federally insured reverse mortgages which are backed by HUD or the US. Department of Housing and Urban Development. These loans can be used for a variety of purposes.

Both proprietary reverse mortgages and HECMs tend to be more expensive than other traditional home loans plus the costs upfront tend to be high. This is important to consider especially if you are planning on staying in your home for a certain amount of time or are planning to borrow a small amount. There are several factors to consider that determine exactly how much you can borrow with a proprietary reverse mortgage or HECM:

  • the age of the borrower
  • the type of reverse mortgage that is chosen
  • the appraisal value of the home
  • what the current interest rates are
  • a financial assessment that determines the borrower’s ability to pay homeowners insurance and property taxes.

HECMs do not have specific income requirements. However, all lenders will conduct financial assessments which will determine whether to approve or deny your loan. A financial assessment determines your willingness and your ability to meet your financial obligations in addition to the mortgage requirements. The results are what lenders look to decide whether funds should be set aside from the loan proceeds to pay items such as property taxes, flood insurance or homeowners insurance. If the lender does not require money to be set aside you can agree that the lender will pay all items.

The Simple Steps to Good Money Management

canstockphoto11709602You can simplify your financial life by following a few basic steps. You are unlikely to have had any lessons on financial management though some parents try to instill a few basics in their children from an early age. If they are asked to do an easy chore or two in exchange for their allowance they will start to appreciate the value of money. Perhaps they are encouraged to set aside a little of it each week towards getting enough for a big purchase? There is certainly nothing wrong in learning the concept of saving. These early lessons can certainly help in later life.

Simple Processes

Even if you did not have these lessons when you were younger, do not despair and try these simple processes:

  • You should have a single checking account from which you pay all your regular bills. Whether you arrange for that to be done automatically or not, everything will be on a single statement.
  • If you have one credit card you will be keeping this expenditure equally tidy. Credit cards do incur a high level of interest when you do not pay off the monthly balance in full. Cards are tempting and many people often use them for more than just convenience, perhaps to buy something that you cannot really afford? If you want to keep your finances in good order you should pay off any such balances by getting a much cheaper money from realisticloans.com without credit check . Your card should then only be used for convenience and the full statement amount settled in full when it is due.
  • Avoid unnecessary subscriptions.
  • You must understand your investments within a retirement account. In recent times performance has been erratic though that is not a reason not to have such a plan because it is the best way to secure a comfortable retirement.
  • Your budget should be thorough and regularly examined to ensure that it is reflecting what is actually happening. None of the figures should be set in stone. The critical thing is that it shows a surplus not a deficit. Even your small daily spending adds up over a month. It does not mean you are necessarily sacrificing to cut down on it.

Stress Free

The whole point of good financial management is that it will reduce your level of stress. It is difficult to be optimistic about how many people are hearing the message.

  • The level of core credit card debt in the USA is very disturbing. For those who are regularly carrying balances on their credit cards, the average debt is over $15,000. It is good news for the card companies that depend on the interest they charge to make their profit.
  • A majority of Americans admit to the fact that they have insufficient retirement savings. The Social Security System was never designed to provide for comfortable retirement yet many have to almost completely rely on it. Unless there is a significant injection of funds even the benefits currently provided are in danger; some estimates suggest a drop of 25% by 2030.
  • Few people have an emergency fund in place which would mean that in the event of something unexpected arising the only recourse that many have is their credit card and all the implications already described.

Don’t Procrastinate

It is all too easy to put off action. After all collection agencies do not come looking for you for no good reason. If you pay the minimum the credit card company requires each month there are no repercussions. However the important figure on the statement is not the minimum payment required but the actual debt that will not go away by magic. If you reach your credit limit however that will lessen your room for maneuver.

Time can be an enemy. It certainly is if you put off retirement plans because retirement seems so far away. Time is also a short term enemy and thinking that you can always sort your finances out next week is not facing up to your financial issues which might be the reason you began to have problems in the first place. The ball is very much in your court to play it without delay.