3 Habits that Help You Prepare for Money Emergencies

No one wants to live paycheck to paycheck. This is such a stressful way to live. It definitely feels like you are hanging on a thin thread all the time. We can never be at peace because we are always questioning our capacity to buy even the most basic necessities such as food.

That 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 or guardians, need to know how to plan out and regulate their spending.

But, like any other plans, the number one enemy of a well-thought out budgeting scheme is the unforeseen events that we more commonly refer to as emergencies. Good thing that there are habits that you can develop to keep yourself afloat and generally unscathed even if emergencies pop up like mushrooms along your path.

Save

Truth be told, saving money should be the favorite hobby of the modern person. Savings should not just come as an afterthought. Everyone should acknowledge that in order for savings to really have an impact, a savings account must be included in the money plan right from the beginning. It shouldn’t be: “This is all I have left 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 expenses, but the point here is clear: save before you start spending. Every person who wants to be financially free in the long run should learn how to live slightly below their income.

Get relevant insurance.

Emergencies like health issues, a car breaking down or being in a car accident are unfortunate events, but ones that we should be able to handle. We should also plan ahead, knowing that these types of emergencies can happen at any time.

Good thing you can get insurance coverage for such unfortunate incidents. For a premium, you will be able to get insurance benefits that will protect your savings through your insurance policy. But getting money you’re owed from insurers can be tricky at times. You should hire a 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 the day’s work, you can spend it on something that you love like baking, carpentry, or any other hobby. Aside from these being a form of recreation, they can also be a source of side income. You can definitely sell the cupcakes that you baked or the chairs and small tables that you refinished. Even if they’re sold only to friends, it’s still money that can be used to increase your savings account or save up for something you really want.

Being prepared is simply the best way to overcome anything. Yes, there are emergencies, but at least financially, you can still very much prepare for them. 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.

Even Celebrities Lose Their Homes to Foreclosure

When you face the possibility of your home being foreclosed upon because of the financial difficulties you’re going through, you likely think you’re the only person who has ever lost their home to foreclosure. But you’re not alone. Even many of the rich and famous have found themselves unable to make their mortgage payments.

Whether actors, pop singing stars, or sports stars, here are 10 well-known people who have had their homes foreclosed.

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