3 Habits that Help You Prepare for Money Emergencies

No one wants to live paycheck to paycheck and this is a very stressful way to live. It definitely feels like you are hanging on a thin thread all the time. You can never be at peace because you are always questioning your capacity to buy the most basic necessities, such as food.

This is the very reason budgeting and general financial literacy needs to be taught in schools and even at home. Everyone, including youngsters who get allowance from their parents, need to know how to plan out and regulate their spending.

Like any other plans, the number one enemy of a well-thought out budgeting goal is the unforeseen events that we more commonly refer to as emergencies. It’s a good thing there are habits that you can develop to keep yourself afloat, and generally unscathed, even if emergencies pop up like weeds in your garden.

Save

Truth be told, saving money should be a regular habit of most working adults. Saving money should not be an afterthought. Everyone should acknowledge that in order for savings to really have an impact, a savings plan should be included in your financial goals from the beginning. It shouldn’t be: “This is all I have left out of my paycheck so this is all I will deposit in my savings account.” It should be: “I earn $5,000 dollars a month, and $250 of this automatically goes to savings!” Of course, the amount will vary depending on a person’s income and expenses, but the point is clear: save before you start spending. Every person who wants to be financially independent should learn how to live below their income.

Get relevant insurance.

Emergencies like health issues, a car breaking down or being in a car accident are unfortunate events, but occurrences that you need to be able to navigate. You should plan ahead, knowing that these types of emergencies can happen at any time.

The good thing is you can purchase insurance coverage for such unfortunate incidents. For a premium, you will be able to obtain insurance that will spare your savings. However, collecting on insurance claims can be tricky at times. If your insurance company is delaying or denying claims, you may need to hire an experienced legal professional who can provide reliable help dealing with insurance companies.

Work for fun (and cash!)

If you have time to spare during weekends or after you’re done with your day job, you can do something that you love, like baking, carpentry or other hobbies. In addition to these being a form of recreation, they can also be another source of income. For example, sell the cupcakes that you baked or the chairs and small tables that you refinished. Even if you sell only to friends, it’s still money that can be used to increase your savings or save up for something you really want.

Being prepared is simply the best way to overcome challenges. Yes, there are emergencies, but at least financially, you can be prepared for the worst. So drop that defeatist attitude and start building good money habits, especially the ones shared here.

Requirements of HELOC’s and Home Equity Loans

Sometimes things can happen that put you behind on a few payments. Then it can all snowball quickly. What do you do when your mortgage is behind? Some homeowners opt to apply for a home equity line of credit or equity loan.

Standard home equity loans offer a large lump sum for the entire amount you are borrowing against while HELOCs allow you to borrow on your home equity at different times and in varying amounts, as you need it. Whichever method you choose, the qualifications for both are similar.

  • The equity in your home must be at least 15-20% of its value at the time of appraisal. This guarantees the lender of collateral in the event you are unable to pay back the loan. If you default, the lender can put a lien on your home to get their money back.
  • You need a debt-to-income ratio of 43%, but 50% is preferred. The higher your debt-to-income ratio is, the better because it means that you are making more money than you owe, in general, and you are considered a lower repayment risk.
  • You should have a credit score of 620 or higher. Lenders love high credit scores because it means you usually meet your obligations.
  • You need a strong history of paying your bills on time. Even if you have fallen behind on your recent mortgage payments, bankers and lenders want to see that you usually make a habit of paying your bills on time. This means that they can trust you to pay back the loan in a reasonable amount of time.
  • Recommendations from other lenders help build your credibility. If you go in with a 740-credit rating, you are almost guaranteed you’ll get the loan. But that depends on how well you meet the other qualifications. Provided you follow these steps and meet these requirements, you should be able to secure either a home equity loan or line of credit without too much trouble.

An Example of a HELOC

If you are still having troubling grasping the idea of a HELOC, here’s an example. In this example, we will assume you bank with Chase as your lender, and you are looking to utilize a Chase home equity line of credit If you have total home equity of $40,000 and the lender requires you to keep up to 20% of your home equity, you’d be allowed to borrow up to $20,000 or half of your loan.

Home equity lines of credit have fallen in popularity recently due to the recent surge in home ownership and increased equity. In a bad market or down times, we tend to see this increase. But when things are going well in the economy, people need the money less, and they are hesitant to borrow on a refinance agreement due to the variable interest rates of a HELOC.

In a perfect world, when things are going well for you, don’t borrow if you don’t have to! But if you need to get ahead and don’t have the cash flow you need, you can choose to apply for either a lump sum cash loan via a home equity loan or a home equity line of credit. Either option is a viable alternative to get ahead and avoid the worse scenario of defaulting on your mortgage. If you need help paying your mortgage, don’t let it go too long. Ask a financial advisor or local banker about an HELOC or home equity loan and see if you qualify. Keeping your home and your credit in good standing should be your primary goal, no matter how you have to do it.

 

How to Buy a Great Car for the Best Value

Saving money is vital when you’re searching for a new car for yourself. Your desire should be to find the car with the most value for the least amount of cash. Here are a few tips you can use to help you find an excellent vehicle for the best value.

Research Efficient Vehicles

Saving money begins with looking for features and benefits that can cut overall usage costs. Therefore, you should research available cars to find options that have high fuel efficiency numbers and safety features that will reduce insurance costs. You can get your hands on a fabulous car that offers you more than 30 miles per gallon and save hundreds of dollars on filling it up for traveling. Look for safety features like airbags and security systems to get discounts on your insurance premiums, as well.

Sell Your Old Car for Cash

Another thing you may want to consider doing to help with your new car purchase is selling your old car for cash. You have several options for selling your car. You can put it in the newspaper or an online classified ad site. Alternatively, you can offer it to a company that specializes in buying used cars for cash. Most companies specializing in cash for cars in Utah and other states are willing to buy used vehicles with minimal hassle. The money you receive can then help you with the down payment on your new vehicle. The heftier the down payment is, the more of an opportunity you will have to reduce the monthly payments if you opt to finance. It will alleviate the burden if you want to pay cash, as well.

Find a Private Owner

Finding a private owner to buy your next vehicle is one of the absolute best ways to save money. Private owners often want to sell their vehicles quickly to pay bills, move or involve themselves in business ventures. You can bargain with a private owner in a way that you can’t bargain with the dealership. You might come out of this situation with an amazing car at an awesome price if you possess the gift of gab.

Bargain Hard

No matter where you buy your car, you can always get a sales advantage by using hard bargaining. For example, you can negotiate the price for exterior flaws such as dents, dings, nicks and missing paint. You can ask for a discount if you see that the tires don’t have a high amount of tread on them. You can perhaps knock off some of the price if you notice a minor repair that needs to be done. Use every opportunity possible to get yourself the best deal you can on the car. Set a threshold price in your mind and work hard not to go past that when you buy your car.

Find Dealer Specials

Finally, you can find a great deal on a car if you take advantage of specials the location might offer. One kind of special that may work well for you is a closeout special. A closeout deal is a sale on inventory from the previous deal that didn’t sell as quickly as the dealership may have wanted it to. Other specials you may come across are manufacturer discounts, dealer promotions, and holiday sales.

Now you know a few secrets you can use during your car-seeking journey. Start using them today and see if they can help you get a fantastic ride for yourself. With any luck, you’ll end up behind the driver’s seat in no time.

Those Times an Installment Loan Comes in Handy

Loans are upfront cash to cover the cost of something you need or want but can’t afford to get on your own. There are some loans that are designed by purpose to be used for specific things like buying a house, a car, or going to school. They take years to pay off and are some of the most challenging to get approved for. Then, there are loans like installment loans which can be used for just about anything. Though you can use these loans as you wish, it’s often best to apply for these when you need a little extra help. Here are some fine times to apply for an installment loan.

Utility Shut-Off Notice

What you pay for utilities tends to fluctuate based on the going rates in the market and your usage level. Though there are conservation tips you can use to reduce your usage level, there are still times when the bill gets out of hand. If you’ve received a shut-off notice, you need to act fast. A consumer installment loan can help you out of this jam. Depending on how much you’re approved for you can pay the bill off or at least to a point where you can work out an affordable repayment plan.

Rent

Having a roof over your head is essential to your quality of life. Sometimes, things get out of whack and you don’t have the money you need to pay your rent. While a few days may not make much of a difference, if your rent is several months behind you could face eviction. To keep this from happening, you could apply for an installment loan to cover the past due balance or renegotiate a payment arrangement with your landlord to remain on the property.

Home Emergency

There’s never a dull moment in the life of a homeowner where anything could go wrong at any time. A home emergency such as a broken pipe, HVAC repair, or the need to replace a home appliance could be more than your budget can handle right now. A short-term loan is ideal because you can get the funds really quickly, handle your emergency, and pay the loan back over time.

Car Repair

You just never know when your car might stop being reliable. Even if you’re good with the maintenance there will come a time when something will break down that needs to be repaired. Car repairs, depending on the problem and type of vehicle you have are expensive. You can use a loan to cover the repair, so you can keep commuting to work and get the money to pay back the loan (and your other bills).

Tide You Over

Have you ever had a week at work where you didn’t earn as much as you normally do, or your money just didn’t stretch as far as you’d like. You’re hanging on by a thread and don’t get paid for another two weeks. You may need gas and groceries, but don’t have the money to foot the bill. An installment loan can supply you with the money you need to get by until your next payday.

There are a lot of occurrences in life where your financial need and your income just won’t add up. The problem may be temporary, but it needs to be dealt with sooner rather than later. In those instances, your best lifeline is an installment loan. Designed for those with less than perfect credit and for any purpose you can imagine, they can help you resolve your matter today with easy repayment options that won’t hurt you in the future.