Money Management Tips & Financial Advice
Emergency loans are distinctly different from traditional loans because of both their purpose and process. While you might borrow a standard loan to purchase a car or consolidate credit card debt, for example, an emergency payday loan is better-suited to extinguishing financial fires, so to speak. Such loans have very brief turnaround times and terms, making them ideal for pressing, temporary borrowing needs. Although you should use emergency cash advances judiciously in order to avoid the unnecessary accumulation of debt, relying on this type of loan occasionally can help you make ends meet when extenuating circumstances arise. Listed below you will find a few scenarios in which an emergency loan might be appropriate:
Listed below you will find a few scenarios in which an emergency loan might be appropriate:
- To cover hospital stay or other unexpected medical expenses
- To pay critical bills, such as utility, phone, or gas bills
- To make your car payment on time
- To purchase groceries or other staple items
- To handle important expenses that arise only once or twice a year, such as vehicle registration or insurance premiums
Unless you make a concerted effort to plan and budget, your money will always seem to disappear faster than you can earn it. Of course, in times of need, you can always count on a payday loan to see you through, but you can also supplement that tool with money-management skills. Sound money management starts with understanding where your money goes. Budgeting, managing debt, and saving will help you organize your finances so your hard-earned money goes toward the short- and long-term goals that mean the most to you.
How to Create a Budget and Stick to It
A budget is essentially a financial road map-it tells you where you're going and how to get there. In the literal sense, it is a written document that helps you plan future income and expenses. Budgets have manifold purposes, including curtailing spending, allocating funds appropriately, prioritizing goals, and saving. Although most people cringe at the thought of budgeting, they usually agree that the rewards of doing so are well-worth it. To motivate yourself, think of all the things you'd like to do with your money, such as buy a new car, pay off a credit card, or take a family vacation. If you put in the effort, a budget will help you make those dreams a reality.
The creation of a budget involves three basic steps, each of which is summarized below.
Figure out your current spending habits.
The only reliable way to find out where your money goes is to keep track of your spending--right down to the last cent--for a few months. For 30-90 days, write down everything you spend. You might want to save receipts and use a basic budgeting software program to make this step a bit easier.
Assess your spending habits and set objectives that incorporate your long-term financial goals.
Group your spending into categories (e.g., living expenses, transportation, food, entertainment, etc.) and identify areas of overspending. Based on your past spending trends, set reasonable limits on each category, remembering what you'd like to accomplish financially in the long run. For instance, if you would like to take college courses soon, perhaps you could trim your entertainment expenses for the next few months to save for tuition.
Continue to monitor your spending.
Continuing to keep track of where and how you spend your money will help you stay within your budget. When you begin meeting your financial goals, your motivation to stick with your budget will increase even more.
How to Consolidate Credit Card Debt
One of the benefits of using a payday advance is that you do not have to rack up the typically long-term debt that comes from credit card use. But if you already have credit card debt, you need to consolidate it into one loan for several reasons. For one, trying to keep track of multiple credit cards, due dates, creditors, balances, etc. is a hassle that you don't need. Additionally, when you consolidate credit card debt, you can often qualify for a better interest rate, thereby allowing you to pay off your debt more quickly.
You have many options when it comes to credit card consolidation. First, you can take out a personal loan from your bank or credit union. Ideally, this loan will have a lower interest rate than the average rate on your credit cards. If you own a home, think about using a home equity debt consolidation loan for ultra-low interest rates. Second, you could use a balance transfer to put all your debt on the credit card with the lowest interest rate. Remember there are fees associated with balance transfers, and promotional rates on such transfers may not last for long. Finally, you could recruit the help of a professional debt consolidation or credit counseling service to consolidate your credit cards for you. This is the best option if you have credit challenges and/or do not have the expertise to consolidate your debt on your own.
How to Repair Your Credit Score Quickly
The higher your credit score is, the lower your interest rates will be, and the more money you will be able to borrow. A good credit score can generally make your life a lot easier, from better employment opportunities to lower premiums on car insurance. In the long run, the best way to improve your credit score is to pay your bills on time consistently and to pay down your debt. But you can also repair your credit score significantly and quickly with a few simple fixes:
Bring your accounts current.
If you are behind on any of your credit cards, you can instantly boost your score by paying off the past-due balance.
Verify your credit limits.
Your credit score may be inaccurately low if your creditors are showing limits on your credit report that are lower than they should be. The more credit you have access to, the higher your score will be.
Arrange your debt so as not to exceed more than 30 percent of your credit limit.
Creditors get nervous when they see you using more than 30 percent of your limit on any one card, so spread your debt out over several cards and use them lightly. Big balances will hurt you as well.
Order your credit report and check it for accuracy.
The majority of credit reports have errors, and those errors are often credit-score liabilities. Order your free credit report online and verify that all of the information is correct. Dispute in writing anything that seems amiss.
How to Create an Emergency Fund
Not many people have an emergency fund that they can dip in to during financial crises. A lack of savings isn't the end of the world-cash advances are always there to help you bridge those gaps in cash flow that happen to everyone. With an emergency fund, though, you can be prepared for whatever comes your way and avoid that feeling of panic when financial disaster strikes. You may have heard that you should have three months' worth of living expenses in your emergency fund. That certainly is a laudable goal, but it's also a lofty one. Avoid overwhelming yourself by starting out with a smaller goal.
For instance, you might resolve to save five percent of each paycheck for the next 30 days as a starting point. Just remember to pay yourself first and not to touch the money until the 30 days are up. After the first month of saving, you might want to up that amount to ten percent of each paycheck. Keep the money you save in a separate account from your primary checking account so you cannot easily access the funds.
If you feel like you don't have the willpower to take emergency-fund money out of your paycheck on your own, try signing up for an automatic withdrawal savings program at your bank. When you open a savings account, most banks offer the option to have a certain percentage of your direct-deposit paycheck put into your savings account automatically. That way, you never really see the money and are less tempted to spend it.
How to Keep Your Information Safe from Identity Theft
The two biggest identity theft vulnerabilities for most consumers are their mail and their computer. Thieves target junk mail for addresses, account numbers, credit card offers, etc. in order to assume your identity. Likewise, think of all of the information you store, send, and receive on your personal computer. Unfortunately, few people take the necessary precautions when using electronic media, and millions of cases of identity theft annually are the result. Identity theft can do irreparable damage to your credit score and can be a nightmare to fix. In the most extreme cases, innocent parties have even been arrested for crimes their impersonators committed. Avoid those consequences by taking the following steps to protect your personal identifying information from identity thieves.
Shred documents with personal information.
Junk mail, credit card statements, bills, and any other documents that have your information on them need to be shredded.
Change your computer passwords regularly and make them complicated.
We are creatures of habit, so we tend to use the same passwords for everything-online banking, email, utilities, and so on. By doing so, we make ourselves even more vulnerable to ID theft. Choose a password with nonsensical characters and numbers, and change it often.
Keep important papers locked.
Things like tax returns, birth certificates, Social Security cards, etc. should be kept in a safe or a locked filing cabinet.
Monitor your credit report.
If you catch identity theft early, you are much more likely to stop the problem before it snowballs into a credit catastrophe. At the very least, review your free credit reports every year.
How to Get the Most out of Your Tax Refund
Receiving a tax refund is always exciting. In a way, a refund can feel like "free" money, but it's important to remember that it is your money to begin with, and you worked hard for it. Used wisely, a tax refund serves much like a compulsory savings program. Once you receive your funds, put your tax refund to work for you by doing one of the following:
Pay off high-interest debt.
If you have unsecured debt, it is undoubtedly costing you an arm and a leg. Make a dent in that debt by applying your tax refund toward your highest-interest credit card. You might even be able to pay off the entire balance if your refund is large enough. You'll boost your credit score and reduce your monthly obligations by doing so.
Contribute to your IRA.
If you don't have any unsecured debt, your retirement nest egg should be your next biggest concern. Remember that if you are eligible for a traditional contribution to your IRA, you can actually deduct your contribution on your income taxes next year.
Bolster your emergency fund.
It's not a matter of if surprise expenses will come; it's a matter of when. With that in mind, think about how robust your emergency fund is. Do you have enough to live without an income for three to six months? If not, that is where your tax refund should go.
Make an extra payment on your mortgage.
If the previous three items are squared away in your financial life, apply your tax refund to your home loan. Additional payments go directly toward the principal of your loan, which means you're closer to owning your home free and clear.
Money Management Tips for Students
As a student, it can be especially difficult to manage your money, mostly because you rarely have any. The cost of tuition and books continues to rise year after year, making an advanced education an increasingly unaffordable prospect for some. With a few smart money management strategies and low-interest student loans, though, there is no reason why you cannot achieve your desired degree without having to live in squalor. Here is what we recommend for students, both undergraduate or graduate:
Set a weekly spending limit and stick to it.
Don't splurge at the start of the semester only to have to eat Top Ramen every day in December. Set a limit and respect it.
Avoid credit cards.
Getting in the habit of charging things is a tough one to break, so just avoid credit cards altogether if you can. Use a debit card or, even better, cash.
Make room for fun.
You're going to burn out if you leave no room in your budget for entertainment. Make room for things like going out, buying music, and seeing movies in your budget, but understand you have to make sacrifices elsewhere to accommodate the expense.
Steer clear of the bookstore.
The campus bookstore may be the most convenient place to purchase your textbooks, but it is also the most expensive even if you buy used. Email your teachers or get on your course Website ahead of time to find out what texts you need and order them online. Even with shipping costs, you'll save a bundle.