How to Take Control of Your Finances
Whenever you are considering a loan, it is important to also think about your current financial situation. Ask yourself if you absolutely need the extra money. If you are dealing with a financial dilemma that could have serious repercussions if not addressed immediately, it may be smart to rely on a short-term lending solution for help. On the other hand, if you will be using the advance funds to pay for an impulse purchase, it might be smarter to save up and wait to buy. Creating a budget and sticking to it are two of the most important things you can do to avoid monetary headaches while building a safety net. We will cover budgeting strategies as well as other things you can do to avoid becoming over reliant on short-term financial services.
Here are some of the most common reasons consumers turn to short-term loans:
- A vehicle breaks down or needs to be serviced
- Bills begin to pile up and debts accumulate
- An unforeseen expense wreaks havoc on the monthly budget
- To buy groceries or other necessities
- A large expense such as vehicle registration or bi-annual insurance policy needs to be paid
As you can see, there are legitimate reasons to consider short-term borrowing if you need to take care of an expense but don't have the money to do so until your next paycheck. Everyone is susceptible to forgetting about a bill or neglecting to make note of an upcoming expense from time to time. It is important to have a resource you can trust in times like these. We have established a network of trusted providers that are committed to serving consumers like you. Additionally, we have created this financial resource to help you stay in control of your money and refrain from becoming reliant on loans.
Take Control of Your Finances by Creating a Budget
You may think a budget is just a simple way of tallying expenses and recording income. While it doesn't have to be complicated, there are some best practices you should employ to ensure it is working for you at all times. In addition to tracking expenses and incomes, a budget will help you discover areas in which you can curtail spending so you can build up a savings account. It will demonstrate ways you can allocate funds while allowing you to prioritize saving goals.
To help you establish a budget, we have broken the process down into three easy steps:
Figure out your current spending habits.
This is the most crucial aspect because it acts as the foundation for your budgeting. Take some time and list all of the ways you spend your money throughout the month. Make a column for necessities such as a mortgage payment or rent, utility bills, gas, etc. The more accurate this list is, the better idea you will have about how your money is being spent. Be realistic and make sure to include everything, including inconsistent expenses like vehicle maintenance.
Set up an emergency fund and establish spending goals you can adhere to.
We can't stress enough how important it is to set up some sort of emergency fund. This will allow you to limit the amount of times you need to rely on a short-term loan for help. Some industry experts recommend beginning with $1,000 to get the ball rolling. Once you have an emergency fund established, add up your expenses and subtract them from your income. Hopefully there is money left over! If not, you have already isolated a problem that needs to be addressed. If you do have money left over, you should allocate a certain percentage to savings and use the rest as discretionary income (or fun money).
Stick to the plan and continue to monitor.
Once you have a plan put together and an idea of your monthly expenses, be sure to stick to it so you can build up a safety net for the future if you were to fall on hard times. Try not to be impulsive when it comes to buying things and you will likely be surprised at how quickly you can grow your savings. Make sure to regularly contribute to your emergency fund so you will have something to fall back on if need be.
How to Tackle Credit Card Debt Through Consolidation
If you struggled with credit card debt, you are certainly not alone! Hundreds of thousands of American consumers are faced with growing expenses each year. One way you can try and reduce the stress of trying to manage multiple cards, looming due dates, harassing creditors and growing balances is to try and consolidate them into one loan so you can target the amount owed more efficiently. You will find it much easier to manage a single expense than trying to stay on top of many.
There are several different ways you can choose to do this. First, you might consider a personal loan from your bank or a credit union as this might feature a lower interest rate than what you are currently paying on your cards. A home equity loan is an ideal option for homeowners who are looking to consolidate their debts and reduce the financial headaches that come from having many different balances. Second, you can transfer the balances of your other cards onto the one that features the lowest interest rate but beware of any applicable fees for doing so. Most card companies will charge a nominal rate for balance transfers. Finally, you could call a credit counselor or debt consolidation specialist that can help you take control of your situation. They will be able to help you address areas in which you could limit your liability and cut unnecessary fees.
Repair Your Credit Score by Following These Strategies
Having a sterling credit report enables you to take advantage of many financial opportunities. Not only will this make your life easier but you will also be eligible for lower financing rates because you are considered less of a liability than other consumers. The easiest way to improve your score is to pay your bills consistently on time and refrain from letting debts get out of hand. Here are a few additional fixes:
Pay any delinquent balances.
If you are delinquent on any current credit, it is vital that you tackle these debts first as being behind will have a significantly negative affect on your ability to borrow.
Take a closer look at your credit limit.
Be sure to know how much you can borrow so you can make informed decisions with your finances. You don't want to max out your borrowing capabilities as it will hurt your standing.
Ensure your debt to credit ratio does not exceed 30%.
If you are starting to significantly eat into your limit, creditors may become a little nervous and your score will reflect that. Try to spread the balances out if you can, remembering to pay everything off on time.
Request a copy of your report.
Many credit reports contain inaccuracies that need to be addressed. There are plenty of places that allow you to request a copy online, so be sure to take advantage of this so you can fix any mistakes.
How to Create an Emergency Fund
Earlier we discussed the importance of establishing an emergency fund during the budgeting process if you haven't already got one. Too many people overlook the importance of having available funds to combat against emergency expenses that seemingly show up out of the blue. A responsible consumer will have this fund set aside so he or she won't be tempted to use it for impulse purchases. So how much should you have stored in it? Some industry experts recommend at least three months of income to reduce the panic feeling if disaster strikes. If this isn't realistic for you at this point, try to start with at least $1,000 so you have a sizeable amount tucked away. You can always add to it when you free up some money.
Before you start putting a lot of money into an emergency fund or a savings account, it is important to assess your debts. What good is putting money in a savings account when you have to pay interest charges on a monthly basis? Besides your mortgage, it might be a good idea to pay off your other debts first before you focus too much of your attention on saving. Once those debts are taken care of, it might be a good idea to save 10-20% each month.
Safeguard Your Personal Information to Avoid Identity Theft
You may have heard about identity theft cases on the rise. If you are concerned, you have every right to be! A responsible consumer safeguards his or her private information so it won't fall into the hands of criminals. The two most common ways identify theft occurs is through the mail system and the Internet. When you receive junk mail with credit card applications, be sure to shred them so a thief can't take advantage of your good name. Similarly, be careful about which sites you give your information to. PersonalCashAdvance.com's loan application form is protected by advanced SSL encryption so you can be assured it is protected at all times. You want to make sure you are only dealing with reputable websites that are committed to keeping your personal information protected at all times.
Shred junk mail and paperwork with personal information.
Any document that has your identity expressed in any form should be destroyed.
Choose difficult computer passwords and update regularly.
If you use a regular password that is simple to remember, you might be opening yourself up to a serious vulnerability.
Store important documentation securely.
Any papers or identification documents with sensitive information should be kept locked and out of the hands of burglars.
Keep tabs on your credit score.
Regularly monitoring your free report will keep you in the loop if there are any mistakes that need to be addressed.
Use Your Tax Refund to Get Ahead
You may be excited to open up that envelope from the IRS that has a check made out to you - your annual tax refund. Before you get too excited, remember that is your money to begin with. Essentially you gave the Government an interest free loan for the year and you are now getting it back. Why not put it to use instead of spending it on an impulse purchase?
Tackle debts and other expenses.
As we explained before, growing your savings account is extremely difficult to do when you have debt. Try to eliminate all forms of debt besides your mortgage before you make the effort to start saving significantly. Start with the card or loan that has the lowest balance (unless the interest rate is extremely low compared to your other debt) for a boost in morale.
Invest in your future.
Next, look into investing into your future. Whether it is a 401k plan through your work or a Roth IRA, there are many ways you can be building up savings. If you do begin to contribute, talk to a financial planner about incentives such as income tax deductions.
Add to your emergency fund.
Once your debts are looked after, you can begin to add to your emergency fund to shelter against unexpected expenses or emergencies. Try to build it up to where you could survive comfortably without an income for three to six months, which is what most experts recommend.
Pay off your house faster.
When you have made significant progress on the previous three items, try to start throwing some extra money towards paying off your house quicker. You may be shocked at the progress you will make once you get the ball rolling.
Special Advice for College Students
When you are studying hard and trying to get ahead, it can be difficult to manage your finances effectively because your earning potential is limited. Tuition, fees and textbook costs continue to rise dramatically each year, so it isn't getting any easier for most students. Try hard to manage your finances responsibly by seeking out low-interest lending options and maintain a budget. It takes a lot of responsibility to do so when your friends are enjoying themselves out on the town, but it will pay off if you can persevere. Here are a few things you can do:
Create a strict budget and live by it weekly.
Being a busy student is no excuse to not live by a budget. Create a financial plan and stick with it.
Stay away from credit cards.
Resist the temptation that comes with credit. Statistically you will spend less if you use debit cards or cash.
Remember to budget for fun.
Don't let the stresses of college get you down. Be sure to budget a little time and money for fun activities, keeping in mind you will have to make sacrifices in other areas to afford it.
Be crafty when it comes to expenses.
Don't pay full price for anything if you can avoid it! Try buying books used instead of the school bookstore and rent your movies instead of paying to go to a theater.